Energy Department awards $12.4M contract for petroleum engineering services, with limited competition
Contract Overview
Contract Amount: $12,368,734 ($12.4M)
Contractor: Netherland, Sewell & Associates, Inc.
Awarding Agency: Department of Energy
Start Date: 2000-06-15
End Date: 2007-09-17
Contract Duration: 2,650 days
Daily Burn Rate: $4.7K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: LABOR HOURS
Sector: Other
Place of Performance
Location: DALLAS, DALLAS County, TEXAS, 75201
State: Texas Government Spending
Plain-Language Summary
Department of Energy obligated $12.4 million to NETHERLAND, SEWELL & ASSOCIATES, INC. for work described as: Key points: 1. Contract awarded on a sole-source basis, raising questions about potential cost efficiencies. 2. Long contract duration (7+ years) suggests a need for sustained services. 3. Services provided are specialized, potentially limiting the pool of qualified bidders. 4. Geographic location of contractor (Texas) may indicate regional focus or expertise. 5. Contract type (labor hours) allows for flexibility but can make cost control challenging.
Value Assessment
Rating: questionable
The contract's value of $12.4 million over its lifespan is difficult to benchmark without comparable sole-source awards for similar petroleum engineering services. The 'labor hours' contract type, while flexible, can lead to cost overruns if not managed tightly. Without competitive bidding, it's challenging to ascertain if the pricing reflects fair market value or if taxpayers received the best possible deal. Further analysis of the hourly rates against industry standards would be necessary for a more definitive value assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning only one vendor was solicited. This approach is typically used when a unique capability or urgent need exists that cannot be met by other sources. The lack of competition means there was no opportunity for price discovery through bidding, potentially leading to higher costs for the government compared to a competed contract. The rationale for sole-sourcing should be clearly documented and justified.
Taxpayer Impact: Sole-source awards limit the government's ability to leverage competition to drive down prices, potentially resulting in higher expenditures for taxpayers. Without a competitive process, there is less assurance that the selected contractor's pricing is the most cost-effective available.
Public Impact
The Department of Energy benefits from specialized petroleum engineering expertise. Services likely support the agency's mission related to energy resource management and policy. The contract's impact is primarily national, supporting federal energy initiatives. Workforce implications are likely concentrated within the contractor's organization.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits price competition and potential cost savings.
- Long contract duration may increase risk of cost escalation or scope creep.
- Labor hour contract type can make precise cost forecasting difficult.
Positive Signals
- Contractor has secured a significant federal award, indicating trust in their capabilities.
- Specialized nature of services suggests a high degree of technical expertise.
- Long-term award provides stability for service delivery.
Sector Analysis
The petroleum engineering sector is critical for the exploration, extraction, and management of oil and gas resources. This contract likely falls within the broader professional services category supporting the energy industry. The Department of Energy's spending in this area is influenced by national energy policy, resource availability, and technological advancements. Comparable spending benchmarks would typically involve analyzing other government contracts for similar specialized engineering consulting services.
Small Business Impact
There is no indication that this contract included a small business set-aside. Given the specialized nature of petroleum engineering services and the sole-source award, it is unlikely that subcontracting opportunities for small businesses were a primary consideration or requirement. The impact on the small business ecosystem is likely minimal for this specific award.
Oversight & Accountability
Oversight for this contract would typically reside with the contracting officer and program managers within the Department of Energy. Accountability measures would be defined in the contract terms and conditions, focusing on performance deliverables and adherence to scope. Transparency may be limited due to the sole-source nature, but contract award data is publicly available.
Related Government Programs
- Department of Energy - Energy Resource Programs
- Professional and Technical Services Contracts
- Petroleum Engineering Consulting Services
Risk Flags
- Sole-source award
- Long contract duration
- Labor hour contract type
Tags
energy, department-of-energy, texas, sole-source, professional-services, engineering-services, petroleum-engineering, labor-hours, large-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $12.4 million to NETHERLAND, SEWELL & ASSOCIATES, INC.. See the official description on USAspending.
Who is the contractor on this award?
The obligated recipient is NETHERLAND, SEWELL & ASSOCIATES, INC..
Which agency awarded this contract?
Awarding agency: Department of Energy (Department of Energy).
What is the total obligated amount?
The obligated amount is $12.4 million.
What is the period of performance?
Start: 2000-06-15. End: 2007-09-17.
What is the specific nature of the petroleum engineering services provided under this contract?
The provided data does not detail the specific nature of the petroleum engineering services. However, given the contractor's specialization (NETHERLAND, SEWELL & ASSOCIATES, INC. is known for petroleum consulting) and the awarding agency (Department of Energy), these services likely encompass areas such as reservoir engineering, geological assessments, production optimization, reserve estimations, and potentially expert testimony or technical advisory roles related to oil and gas resources. The 'labor hours' contract type suggests a need for ongoing expert support rather than a fixed-scope project.
How does the $12.4 million contract value compare to similar sole-source petroleum engineering contracts awarded by the government?
Benchmarking this $12.4 million sole-source contract against similar awards is challenging without more specific details on the services rendered and the contract's duration. Sole-source contracts inherently lack direct price competition, making comparisons difficult. Generally, large-dollar, long-term sole-source awards warrant close scrutiny to ensure fair pricing. A comprehensive analysis would require access to a broader dataset of sole-source petroleum engineering contracts, including their scope, duration, and hourly rates, to establish a reliable comparison point and assess value for money.
What are the primary risks associated with a sole-source award of this magnitude and duration?
The primary risks associated with a sole-source award of this magnitude ($12.4 million) and duration (over 7 years) include potential overpayment due to the absence of competitive pricing, reduced incentive for the contractor to innovate or improve efficiency, and the risk of vendor lock-in. If the contractor's performance falters or their pricing becomes uncompetitive over time, the government has limited recourse without re-competing the contract, which can be a lengthy and costly process. Ensuring robust oversight and performance management is crucial to mitigate these risks.
What is the historical spending pattern for petroleum engineering services by the Department of Energy?
The provided data only includes a single contract award from 2000-2007. To understand historical spending patterns for petroleum engineering services by the Department of Energy, a broader analysis of federal procurement databases (like FPDS or USASpending) would be necessary. This would involve querying for contracts categorized under relevant Product Service Codes (PSCs) and keywords related to petroleum engineering, filtering by the Department of Energy as the awarding agency, and examining spending trends over multiple fiscal years. This would reveal the typical volume, value, and types of contracts awarded in this domain.
What is the track record of NETHERLAND, SEWELL & ASSOCIATES, INC. in securing federal contracts, particularly sole-source awards?
Based on the provided data, NETHERLAND, SEWELL & ASSOCIATES, INC. secured this $12.4 million sole-source contract with the Department of Energy. To assess their broader track record, one would need to search federal procurement databases for all contracts awarded to this entity. This would reveal the frequency of sole-source versus competed awards, the agencies they contract with, the types of services provided, and the total value of contracts received. A history of numerous sole-source awards might indicate a specialized niche or, conversely, a pattern that warrants further investigation into competition levels.
Competition & Pricing
Extent Competed: NOT COMPETED
Offers Received: 1
Pricing Type: LABOR HOURS (Z)
Contractor Details
Address: 1601 ELM ST STE 4500, DALLAS, TX, 90
Business Categories: Category Business, Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $12,585,000
Exercised Options: $12,585,000
Current Obligation: $12,368,734
Timeline
Start Date: 2000-06-15
Current End Date: 2007-09-17
Potential End Date: 2007-09-17 00:00:00
Last Modified: 2010-04-07
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