Natural gas supply contract for NIST awarded to WGL Energy Services for over $11.7 million

Contract Overview

Contract Amount: $11,727,928 ($11.7M)

Contractor: WGL Energy Services, Inc.

Awarding Agency: Department of Commerce

Start Date: 2005-10-01

End Date: 2006-12-31

Contract Duration: 456 days

Daily Burn Rate: $25.7K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Energy

Official Description: NATURAL GAS TO BE PROVIDED TO NIST FROM 10/01/2005 - 10/31/2006.

Place of Performance

Location: GAITHERSBURG, MONTGOMERY County, MARYLAND, 20899

State: Maryland Government Spending

Plain-Language Summary

Department of Commerce obligated $11.7 million to WGL ENERGY SERVICES, INC. for work described as: NATURAL GAS TO BE PROVIDED TO NIST FROM 10/01/2005 - 10/31/2006. Key points: 1. Contract value appears reasonable for a one-year supply of natural gas to a federal facility. 2. Limited competition due to contract type raises questions about price optimization. 3. Performance risk is moderate, given the essential nature of the service and established provider. 4. Contract duration of 456 days covers the specified period. 5. Sector positioning is within energy services for a research and standards agency.

Value Assessment

Rating: fair

The contract value of $11.7 million for approximately 13 months of natural gas supply to NIST seems within a reasonable range for such a service. However, without specific data on the volume of natural gas supplied and prevailing market rates during the contract period, a precise value-for-money assessment is challenging. Benchmarking against similar federal contracts for natural gas in the Maryland region would provide a clearer picture of whether the pricing was competitive.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicated as 'NOT AVAILABLE FOR COMPETITION'. This suggests that WGL ENERGY SERVICES, INC. was likely the sole provider or that circumstances precluded a competitive bidding process. The lack of competition limits the government's ability to secure the best possible price through market forces and may result in a higher cost than if multiple bids were solicited.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure, potentially missing out on cost savings that could have been achieved through a bidding process.

Public Impact

The primary beneficiary is the National Institute of Standards and Technology (NIST), ensuring a continuous supply of natural gas for its operations. Services delivered include the provision of natural gas, essential for heating, laboratory processes, and other facility needs. Geographic impact is localized to the NIST facility in Maryland. Workforce implications are minimal, as this is a service contract for a commodity.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition could lead to suboptimal pricing.
Potential for price volatility if not adequately managed under a fixed-price contract.

Positive Signals

Ensures essential utility service for a critical research facility.
Contract awarded to a known entity, potentially reducing transition risks.

Sector Analysis

The energy services sector, specifically natural gas supply, is a critical component of infrastructure for federal agencies. This contract falls within the broader energy procurement category. Comparable spending benchmarks for natural gas supply to federal facilities vary significantly based on location, volume, and market conditions. The market for natural gas is subject to fluctuations, making long-term fixed-price contracts a strategic decision.

Small Business Impact

This contract does not appear to have a small business set-aside. There is no indication of subcontracting requirements for small businesses. The award to WGL ENERGY SERVICES, INC., a larger entity, suggests no direct positive impact on the small business ecosystem for this specific procurement.

Oversight & Accountability

Oversight would typically be managed by the contracting officer's representative (COR) at NIST, ensuring delivery according to contract terms. Accountability rests with WGL ENERGY SERVICES, INC. for providing the natural gas and NIST for payment. Transparency is limited due to the sole-source nature of the award, with details of the justification for non-competition not readily available.

Related Government Programs

Federal Energy Management Program
Utility Energy Services Contracts
Department of Commerce Energy Procurement

Risk Flags

Sole-source award raises concerns about competition and potential overpricing.
Lack of detailed performance metrics in summary data.

Frequently Asked Questions

What is this federal contract paying for?

Department of Commerce awarded $11.7 million to WGL ENERGY SERVICES, INC.. NATURAL GAS TO BE PROVIDED TO NIST FROM 10/01/2005 - 10/31/2006.

Who is the contractor on this award?

The obligated recipient is WGL ENERGY SERVICES, INC..

Which agency awarded this contract?

Awarding agency: Department of Commerce (National Institute of Standards and Technology).

What is the total obligated amount?

The obligated amount is $11.7 million.

What is the period of performance?

Start: 2005-10-01. End: 2006-12-31.

What was the specific justification for awarding this contract on a sole-source basis?

The provided data indicates the contract was 'NOT AVAILABLE FOR COMPETITION,' which typically implies a sole-source award. The specific justification for this determination is not detailed in the provided data. Common reasons for sole-source awards include unique capabilities of a single provider, urgent and compelling needs where competition is not feasible, or when only one source is capable of meeting the requirement. Without further documentation, such as a Justification and Approval (J&A) document, the precise rationale remains unknown. This lack of transparency can raise concerns about whether the government explored all viable options for competitive procurement.

How does the contract price compare to market rates for natural gas during the 2005-2006 period in Maryland?

A direct comparison of the contract price to prevailing market rates for natural gas in Maryland during the 2005-2006 period is not possible with the data provided. The contract value is $11,727,927.91 for a duration of 456 days (approximately 1.25 years). To perform a meaningful benchmark, one would need to know the estimated volume of natural gas to be supplied and compare the per-unit cost (e.g., per dekatherm or per thousand cubic feet) to historical spot or futures market prices for the relevant region and time frame. Factors like fixed-price versus variable pricing, delivery terms, and included services also influence the overall cost and complicate direct comparisons.

What were the performance expectations and metrics for WGL ENERGY SERVICES, INC. under this contract?

The provided data does not specify the detailed performance expectations or metrics for WGL ENERGY SERVICES, INC. However, as a utility service contract for natural gas, the primary performance expectation would be the reliable and continuous delivery of natural gas meeting specified quality standards (e.g., pressure, composition) to the NIST facility. Key performance indicators would likely revolve around uninterrupted service, adherence to delivery schedules, and compliance with safety and environmental regulations. Failure to meet these implicit expectations could lead to contract remedies or termination.

What is the track record of WGL ENERGY SERVICES, INC. in providing similar services to federal agencies?

The provided data does not include information on WGL ENERGY SERVICES, INC.'s track record with federal agencies. To assess this, one would need to review past federal contract awards, performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), and any history of disputes or contract modifications. A positive track record with reliable service delivery and fair pricing would indicate lower performance risk for this contract. Conversely, a history of issues could signal potential problems.

What is the total federal spending on natural gas supply contracts for the National Institute of Standards and Technology (NIST) over the last five fiscal years?

The provided data only pertains to a single contract for natural gas supply to NIST from 2005-2006. To determine total federal spending on natural gas for NIST over the last five fiscal years, a comprehensive search of federal procurement databases (like USASpending.gov or FPDS) would be required. This would involve filtering for NIST as the recipient agency, 'natural gas' or relevant product/service codes as the item procured, and the relevant fiscal years. Such an analysis would reveal spending trends, identify key suppliers, and highlight the overall investment in energy resources for the facility.

Industry Classification

NAICS: Mining, Quarrying, and Oil and Gas Extraction › Oil and Gas Extraction › Crude Petroleum and Natural Gas Extraction

Product/Service Code: UTILITIES AND HOUSEKEEPING › UTILITIES

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: WGL Holdings Inc. (UEI: 153776278)

Address: 13865 SUNRISE VALLEY DRIVE, SUITE 2, HERNDON, VA, 11

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $11,727,928

Exercised Options: $11,727,928

Current Obligation: $11,727,928

Parent Contract

Parent Award PIID: GS00P03BSC0246

IDV Type: IDC

Timeline