HHS awards $2.58M for utility services to Northwestern Energy, highlighting a 6-year contract for NIH facilities

Contract Overview

Contract Amount: $2,577,829 ($2.6M)

Contractor: Northwestern Corp

Awarding Agency: Department of Health and Human Services

Start Date: 2025-02-01

End Date: 2031-10-31

Contract Duration: 2,463 days

Daily Burn Rate: $1.0K/day

Competition Type: COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: CUSTOMER# 03779279 | INVOICE DATE: 4/16/2025 | NORTHWESTERN ENERGY CONSOLIDATED BILL (ELECTRIC & GAS NIH RML)

Place of Performance

Location: HAMILTON, RAVALLI County, MONTANA, 59840

State: Montana Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $2.6 million to NORTHWESTERN CORP for work described as: CUSTOMER# 03779279 | INVOICE DATE: 4/16/2025 | NORTHWESTERN ENERGY CONSOLIDATED BILL (ELECTRIC & GAS NIH RML) Key points: 1. The contract value of $2.58 million over six years suggests a moderate annual expenditure for essential utility services. 2. Competition dynamics appear favorable, as the contract was competed under SAP, indicating a structured procurement process. 3. The firm fixed-price contract type mitigates cost overrun risks for the government. 4. The duration of the contract (6 years) provides long-term stability for utility provision but may limit opportunities for re-competition and potential cost savings. 5. The services procured fall under 'Regulation and Administration of Communications, Electric, Gas, and Other Utilities,' a critical support function for research facilities. 6. The contract is a BPA Call, suggesting it's an order against a pre-existing Basic Ordering Agreement, which can streamline procurement for recurring needs.

Value Assessment

Rating: good

The total award of $2.58 million over approximately six years averages to about $430,000 annually for electric and gas services. Benchmarking this against similar utility contracts for federal facilities is challenging without more specific service details and geographic comparisons. However, for a large research campus like NIH, this annual figure appears reasonable for essential utilities, assuming it covers significant energy consumption. The firm fixed-price nature provides cost certainty.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was competed under SAP (Simplified Acquisition Procedures), which is typically used for procurements valued below certain thresholds, suggesting a competitive process was employed. While the specific number of bidders is not provided, SAP generally allows for a reasonable number of offers, promoting price discovery and value for the government. The use of SAP indicates that the agency sought competitive bids within the simplified acquisition framework.

Taxpayer Impact: Competing the contract under SAP likely resulted in a fair market price for the utility services, benefiting taxpayers by ensuring cost-effectiveness within the simplified acquisition process.

Public Impact

The primary beneficiaries are the National Institutes of Health (NIH) facilities in Montana, ensuring continuous operation of essential research infrastructure. The services delivered include reliable electric and gas utilities, crucial for powering laboratories, equipment, and administrative functions. The geographic impact is localized to the NIH facilities located in Montana, where Northwestern Energy provides service. Workforce implications are minimal, as this contract primarily procures a utility service rather than direct labor, though it supports the operational workforce at NIH.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price increases over the 6-year term if not adequately structured within the fixed-price agreement.
Reliance on a single utility provider for essential services could pose a risk if service disruptions occur.
Limited flexibility to switch providers or adopt new energy solutions during the contract period.

Positive Signals

Firm fixed-price contract type provides budget certainty and protects against cost escalations.
Competition under SAP suggests a structured procurement process aimed at achieving value.
Long-term contract ensures stable and reliable utility services for critical research operations.

Sector Analysis

The energy and utilities sector is fundamental to the operation of all federal agencies. This contract falls within the utility services sub-sector, specifically focusing on electric and gas provision. Federal spending on utilities is substantial and ongoing, supporting everything from office buildings to highly specialized research facilities. The market for utility services is often localized due to infrastructure requirements, but federal agencies leverage procurement processes to secure competitive rates where possible. This contract represents a small but essential component of the federal government's overall energy expenditure.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract (sb: false). Northwestern Energy is a large utility provider, and it is unlikely that this contract would be subcontracted to small businesses in a significant way, as utility provision is typically handled by the primary provider. Therefore, the direct impact on the small business ecosystem appears to be minimal.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of Health and Human Services (HHS) and the National Institutes of Health (NIH) contracting officers and program managers. As a firm fixed-price contract awarded under SAP, the primary accountability measure is adherence to the agreed-upon price and service levels. Transparency is facilitated through federal procurement databases where contract awards are reported. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Federal Utility Services Contracts
National Institutes of Health Facility Support Contracts
Department of Health and Human Services Energy Procurement
Government Energy Management Programs

Risk Flags

Potential for price volatility not fully captured by fixed-price if market conditions change drastically.
Dependence on a single provider for essential utilities.
Lack of explicit detail on performance metrics or energy efficiency goals in the summary data.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $2.6 million to NORTHWESTERN CORP. CUSTOMER# 03779279 | INVOICE DATE: 4/16/2025 | NORTHWESTERN ENERGY CONSOLIDATED BILL (ELECTRIC & GAS NIH RML)

Who is the contractor on this award?

The obligated recipient is NORTHWESTERN CORP.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (National Institutes of Health).

What is the total obligated amount?

The obligated amount is $2.6 million.

What is the period of performance?

Start: 2025-02-01. End: 2031-10-31.

What is the historical spending pattern for utility services at this specific NIH facility or similar NIH facilities?

Analyzing historical spending for utility services at this NIH facility or comparable NIH sites would provide crucial context for the $2.58 million award. Without access to specific historical data for this location, it's difficult to definitively assess if this contract represents an increase, decrease, or stable expenditure. However, federal agencies typically aim for cost efficiencies over time. If previous contracts were significantly lower, it might indicate increased energy needs, rising utility rates, or a longer contract duration. Conversely, if spending has been consistent, it suggests stable operational requirements and pricing. Understanding past expenditures allows for a more robust evaluation of the current contract's value and potential for savings.

How does the annual cost per facility compare to other federal research installations of similar size and energy needs?

To benchmark the annual cost of approximately $430,000 ($2.58M / 6 years), we would ideally compare it to similar federal research installations. Factors such as the size of the campus, the intensity of laboratory operations (which often require significant energy for HVAC, specialized equipment, and lighting), and the local cost of electricity and gas in Montana are critical. If comparable facilities in regions with similar utility rates spend significantly more or less, it could indicate issues with pricing efficiency or unique operational demands. Without specific data on comparable facilities, this benchmark remains qualitative, suggesting the cost is 'reasonable' for a large research institution but lacking precise validation.

What specific energy consumption metrics or service level agreements (SLAs) are included in the contract to ensure performance?

The contract details provided do not specify the energy consumption metrics or Service Level Agreements (SLAs) that govern the delivery of electric and gas services. For a firm fixed-price contract, the focus is typically on ensuring the availability and delivery of the utility service itself. However, effective oversight would involve monitoring consumption patterns against historical data and ensuring reliability (e.g., minimal service interruptions). Robust SLAs might include response times for outages, power quality standards, or reporting requirements on energy usage. The absence of explicit mention suggests that these details are likely contained within the full contract documentation or the underlying BPA, and their presence would be key to assessing performance beyond just cost.

What is Northwestern Energy's track record with federal contracts, particularly regarding reliability and pricing?

Northwestern Energy's track record with federal contracts, particularly concerning reliability and pricing, is a key factor in assessing this award. As a major utility provider, they likely have experience serving government facilities. A review of past federal contract performance databases (like FPDS) could reveal their history with similar agencies or contract types. Positive indicators would include a history of meeting delivery schedules, maintaining service reliability, and consistently competitive pricing. Conversely, any past issues related to service disruptions, cost overruns (though less likely with FFP), or contract disputes would raise concerns. Without specific data on their federal performance history, we assume a standard level of reliability expected from a regulated utility.

Are there any provisions for renewable energy integration or energy efficiency improvements within this contract?

The provided data for this contract does not explicitly mention provisions for renewable energy integration or energy efficiency improvements. The description 'Regulation and Administration of Communications, Electric, Gas, and Other Utilities' and the award details focus on the provision of standard utility services. Federal agencies are increasingly encouraged to adopt sustainable energy practices, but such initiatives are often detailed in separate contracts or specific clauses within larger agreements. It is possible that Northwestern Energy offers such services, but they are not highlighted as a component of this particular BPA Call. Further investigation into the full contract scope would be needed to confirm.

Industry Classification

NAICS: Public Administration › Administration of Economic Programs › Regulation and Administration of Communications, Electric, Gas, and Other Utilities

Product/Service Code: UTILITIES AND HOUSEKEEPING › HOUSEKEEPING SERVICES

Competition & Pricing

Extent Competed: COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 3010, WEST 69TH STREET, SIOUX FALLS, SD, 57108

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

Financial Breakdown

Contract Ceiling: $2,577,829

Exercised Options: $2,577,829

Current Obligation: $2,577,829

Actual Outlays: $1,580,155

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: 75N99025A00003

IDV Type: BPA

Timeline