VA's $33.7M Energy Service Contract with National Grid USA for Northport VA Medical Center

Contract Overview

Contract Amount: $33,680,896 ($33.7M)

Contractor: National Grid USA Service Company, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2019-09-27

End Date: 2027-04-30

Contract Duration: 2,772 days

Daily Burn Rate: $12.2K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Energy

Official Description: OTHER FUNCTIONS - VISN 2 NORTHPORT VA MEDICAL CENTER UTILITY ENERGY SERVICE CONTRACT (UESC)

Place of Performance

Location: NORTHPORT, SUFFOLK County, NEW YORK, 11768

State: New York Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $33.7 million to NATIONAL GRID USA SERVICE COMPANY, INC. for work described as: OTHER FUNCTIONS - VISN 2 NORTHPORT VA MEDICAL CENTER UTILITY ENERGY SERVICE CONTRACT (UESC) Key points: 1. Contract aims to improve energy efficiency and reduce utility costs at a major VA facility. 2. Sole-source award raises questions about potential for higher pricing and limited market engagement. 3. Long contract duration (nearly 5 years) requires careful monitoring for sustained performance and value. 4. Focus on utility infrastructure suggests a critical operational need for the medical center. 5. Performance will be measured against energy savings targets, a key indicator of success.

Value Assessment

Rating: fair

The contract value of $33.7 million over its term represents a significant investment in facility infrastructure. Benchmarking this specific type of energy service contract is challenging without more granular data on the scope of work and expected energy savings. However, given the sole-source nature, there's a risk that the pricing may not reflect the most competitive market rates. The value proposition hinges heavily on the realization of projected energy savings, which are not detailed here.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when a specific vendor possesses unique capabilities or when there's a compelling reason to bypass competition, such as an existing relationship or specialized knowledge of the facility's systems. The lack of competition limits the government's ability to solicit and compare multiple proposals, potentially impacting price discovery and the overall value obtained.

Taxpayer Impact: Taxpayers may not benefit from the cost savings that could arise from a competitive bidding process. A sole-source award can sometimes lead to higher prices than would be achieved in an open market.

Public Impact

Veterans receiving care at the Northport VA Medical Center will benefit from a more reliable and potentially more comfortable environment due to improved utility systems. The contract supports the operational continuity of a critical healthcare facility. The geographic impact is localized to Long Island, New York, where the Northport VA Medical Center is located. While not a direct job creation contract, it supports the maintenance and operation of essential services, indirectly impacting healthcare sector employment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Long contract duration necessitates robust oversight to ensure continued value.
Lack of detailed performance metrics in the provided data makes independent assessment difficult.

Positive Signals

Addresses critical utility infrastructure for a major VA medical center.
Focus on energy efficiency aligns with government sustainability goals.
Contract is with a known entity, National Grid USA, suggesting some level of established capability.

Sector Analysis

This contract falls within the Energy Services sector, specifically focusing on utility energy service contracts (UESCs) for federal facilities. UESCs are designed to help federal agencies reduce energy costs and improve facility infrastructure through performance-based contracts. The market for such services involves energy service companies (ESCOs) that can finance, design, and implement energy conservation measures. The VA, like other federal agencies, utilizes these contracts to meet energy reduction mandates and modernize aging infrastructure.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions or subcontracting requirements for this contract. As a sole-source award to a large utility provider, the direct impact on the small business ecosystem is likely minimal unless National Grid USA engages small businesses for specific aspects of the project not detailed here.

Oversight & Accountability

Oversight for this contract would typically reside with the Department of Veterans Affairs contracting officers and facility management. Performance monitoring would focus on achieving the agreed-upon energy savings and maintaining the utility infrastructure. Transparency is generally facilitated through federal contract databases, but detailed operational oversight reports are not publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

VA Energy Management Program
Federal Energy Management Program (FEMP)
Utility Energy Service Contracts (UESCs)
Department of Veterans Affairs Medical Facility Operations

Risk Flags

Sole-source award may limit cost savings.
Long contract duration requires sustained oversight.
Lack of detailed performance metrics in summary.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $33.7 million to NATIONAL GRID USA SERVICE COMPANY, INC.. OTHER FUNCTIONS - VISN 2 NORTHPORT VA MEDICAL CENTER UTILITY ENERGY SERVICE CONTRACT (UESC)

Who is the contractor on this award?

The obligated recipient is NATIONAL GRID USA SERVICE COMPANY, INC..

Which agency awarded this contract?

Awarding agency: Department of Veterans Affairs (Department of Veterans Affairs).

What is the total obligated amount?

The obligated amount is $33.7 million.

What is the period of performance?

Start: 2019-09-27. End: 2027-04-30.

What specific energy conservation measures are included in this contract, and what are the projected energy savings?

The provided data does not specify the exact energy conservation measures (ECMs) to be implemented under this contract. Typically, UESCs involve upgrades to lighting, HVAC systems, building controls, and other energy-consuming equipment. Projected energy savings are crucial for evaluating the contract's value for money, as these contracts are often performance-based, meaning payment is tied to achieved savings. Without this information, it's difficult to independently verify the economic justification for the $33.7 million expenditure.

Why was this contract awarded on a sole-source basis, and what was the justification for not competing it?

The justification for a sole-source award typically stems from unique capabilities, existing infrastructure integration, or specific circumstances where only one vendor can meet the requirement. For National Grid USA, it might be due to their existing role as the utility provider for the Northport VA Medical Center, possessing intimate knowledge of the site's energy infrastructure and distribution systems. However, the government is generally required to justify sole-source awards, and the specific rationale would be documented in the contract's justification and approval (J&A) document, which is not publicly detailed here.

How does the contract's pricing compare to similar energy service contracts for federal facilities?

Directly comparing the pricing of this $33.7 million contract is difficult without detailed breakdowns of the scope of work, the specific technologies employed, and the expected energy savings. However, the sole-source nature of the award suggests that competitive benchmarking might be limited. Generally, UESCs are evaluated based on their life-cycle cost savings and return on investment. A thorough assessment would require comparing the proposed cost per unit of energy saved or per square foot of facility space against industry standards and other federal benchmarks, which are not provided.

What are the key performance indicators (KPIs) and how will the contractor's performance be measured?

While not explicitly detailed in the provided summary, UESCs are performance-based contracts. Key performance indicators would likely revolve around achieving specific, measurable, achievable, relevant, and time-bound (SMART) energy savings targets (e.g., reduction in kilowatt-hours, therms, or associated costs). Performance is typically measured by comparing post-implementation energy usage against a baseline established before the upgrades. The contract likely includes provisions for measurement and verification (M&V) to ensure savings are realized and accurately reported.

What is the historical spending pattern for utility energy services at the Northport VA Medical Center?

The provided data does not include historical spending patterns for utility energy services at the Northport VA Medical Center. Understanding past expenditures would provide context for the current $33.7 million contract, helping to determine if this represents an increase, a decrease, or a shift in investment strategy. Analyzing historical data could reveal trends in energy consumption, cost fluctuations, and the effectiveness of previous energy efficiency initiatives.

What is the track record of National Grid USA in performing similar energy service contracts for the federal government?

National Grid USA is a major utility company with extensive experience in energy infrastructure and services. While they are known for providing energy to millions of customers, their specific track record as an Energy Service Company (ESCO) performing federal UESCs would need to be independently verified through contract databases and performance reports. Their established presence as a utility provider suggests familiarity with the Northport VA Medical Center's existing infrastructure, which could be a factor in their selection for this sole-source award.

Industry Classification

NAICS: Utilities › Electric Power Generation, Transmission and Distribution › Fossil Fuel Electric Power Generation

Product/Service Code: UTILITIES AND HOUSEKEEPING › UTILITIES

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 40 SYLVAN RD, WALTHAM, MA, 02451

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign-Owned and U.S.-Incorporated Business, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $33,899,703

Exercised Options: $33,893,158

Current Obligation: $33,680,896

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS00P12BSD0879

IDV Type: IDC

Timeline