NRC awards $27.6M for utilities services to Potomac Electric Power Co. over 10 years

Contract Overview

Contract Amount: $27,644,090 ($27.6M)

Contractor: Potomac Electric Power CO

Awarding Agency: Nuclear Regulatory Commission

Start Date: 2004-12-01

End Date: 2014-11-30

Contract Duration: 3,651 days

Daily Burn Rate: $7.6K/day

Competition Type: NOT COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: UTILITIES SERVICES

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20555

State: District of Columbia Government Spending

Plain-Language Summary

Nuclear Regulatory Commission obligated $27.6 million to POTOMAC ELECTRIC POWER CO for work described as: UTILITIES SERVICES Key points: 1. Contract awarded via delivery order, indicating it was part of a larger existing agreement. 2. The contract spans a decade, suggesting a long-term need for these services. 3. Sole-source award raises questions about potential cost efficiencies and market alternatives. 4. Firm fixed-price contract provides cost certainty for the agency. 5. Services include electric bulk power transmission and control, critical for NRC operations. 6. The contract was not competed under SAP, suggesting it may fall outside standard procurement thresholds or processes.

Value Assessment

Rating: questionable

The contract value of $27.6 million over 10 years averages to approximately $2.76 million annually. Without specific benchmarks for utility services at federal facilities of this nature, it is difficult to definitively assess value for money. However, the sole-source nature of the award and the lack of competitive bidding suggest that the NRC may not have secured the most advantageous pricing available in the market. Further analysis would require comparing this rate to similar contracts for utility services provided to comparable federal agencies or facilities.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as a sole-source delivery order, meaning it was not openly competed. The data indicates it was 'NOT COMPETED UNDER SAP,' which could imply it was a modification or extension of an existing contract or handled through a specific exception to full and open competition. The lack of competition limits the ability to gauge market prices and potentially leads to higher costs for the government as alternative providers were not considered.

Taxpayer Impact: A sole-source award means taxpayers did not benefit from competitive pricing, potentially resulting in a higher overall cost for these essential utility services.

Public Impact

The Nuclear Regulatory Commission (NRC) benefits from reliable and continuous utility services. Essential services include electric bulk power transmission and control, crucial for the agency's regulatory functions and facility operations. The geographic impact is concentrated in the District of Columbia, where the NRC facilities are located. The contract supports the operational workforce by ensuring the necessary infrastructure is in place.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated costs for taxpayers.
Long contract duration (10 years) could lock the government into potentially suboptimal pricing if market rates decrease.
Sole-source awards can indicate potential issues with market research or strategic sourcing.

Positive Signals

Firm fixed-price contract provides budget certainty for the NRC.
Long-term award suggests a stable and predictable service delivery for critical infrastructure.
Award to an established utility provider likely ensures reliable service delivery.

Sector Analysis

This contract falls within the Utilities Services sector, specifically focusing on electric bulk power transmission and control. The market for utility services is typically characterized by regulated monopolies or oligopolies, especially for essential services like electricity transmission in specific geographic areas. Federal agencies often rely on established utility providers, and contracts can be long-term to ensure service continuity. Benchmarking is challenging due to the localized nature of utility infrastructure and regulatory frameworks.

Small Business Impact

The provided data indicates that small business participation was not a factor in this award (ss: false, sb: false). As this was a sole-source award to a large utility provider, there were likely no subcontracting opportunities specifically set aside for small businesses within this contract. The impact on the small business ecosystem is minimal for this particular award.

Oversight & Accountability

Oversight for this contract would primarily fall under the Nuclear Regulatory Commission's contracting and financial management departments. As a sole-source award, scrutiny might be higher to ensure the pricing is fair and reasonable. Transparency is limited due to the lack of competitive bidding. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Federal Utility Services Contracts
Energy Infrastructure Contracts
Government Facility Operations Support

Risk Flags

Sole-source award
Long contract duration
Lack of competition

Frequently Asked Questions

What is this federal contract paying for?

Nuclear Regulatory Commission awarded $27.6 million to POTOMAC ELECTRIC POWER CO. UTILITIES SERVICES

Who is the contractor on this award?

The obligated recipient is POTOMAC ELECTRIC POWER CO.

Which agency awarded this contract?

Awarding agency: Nuclear Regulatory Commission (Nuclear Regulatory Commission).

What is the total obligated amount?

The obligated amount is $27.6 million.

What is the period of performance?

Start: 2004-12-01. End: 2014-11-30.

What is the historical spending pattern for utility services at the Nuclear Regulatory Commission?

Analyzing historical spending for utility services at the NRC is crucial for understanding long-term trends and identifying potential cost efficiencies or escalations. Without specific historical data for this contract or similar utility contracts within the NRC, a comprehensive analysis is not possible. However, the current award of $27.6 million over 10 years suggests an average annual expenditure of approximately $2.76 million. If this represents a significant increase or decrease compared to previous periods, it would warrant further investigation into the factors driving such changes, such as inflation, service expansion, or changes in energy market dynamics. A review of prior contracts for similar services would be necessary to establish a baseline and assess the current award's position within the agency's spending history.

How does the pricing of this contract compare to similar utility service contracts awarded to other federal agencies?

Benchmarking the pricing of this $27.6 million, 10-year utility services contract against similar awards to other federal agencies is challenging without access to a comprehensive database of comparable contracts. Utility pricing is highly dependent on geographic location, specific service requirements (e.g., transmission, distribution, generation), and prevailing market conditions, which are often regulated. However, the fact that this was a sole-source award to Potomac Electric Power Co. for services in the District of Columbia raises a flag. Ideally, federal agencies should aim for competitive bidding to ensure the best possible pricing. If comparable agencies in similar locations have secured similar services through competitive processes at a lower per-unit cost or overall value, it would indicate that this contract may not represent optimal value for taxpayers. Further investigation would involve identifying agencies with similar operational footprints and service needs and comparing their utility procurement strategies and outcomes.

What are the specific risks associated with a sole-source award for essential utility services?

Sole-source awards for essential utility services, such as the $27.6 million contract with Potomac Electric Power Co. for the NRC, carry several inherent risks. Primarily, the lack of competition can lead to inflated prices, as the government does not benefit from the cost-saving pressures that arise from multiple bidders vying for the contract. This can result in taxpayers paying more than necessary for these critical services. Secondly, there's a risk of complacency from the awarded contractor, as they face no immediate threat of losing the business to a competitor. This could potentially impact service quality or innovation over the long 10-year duration of the contract. Lastly, sole-source awards can sometimes indicate a lack of adequate market research or planning by the procuring agency, potentially missing opportunities to secure more favorable terms or explore alternative service providers.

What is the track record of Potomac Electric Power Co. in serving federal government contracts?

Potomac Electric Power Co. (PEPCO) has a long history of providing utility services, including to federal government entities. As a major utility provider in the Washington D.C. metropolitan area, it is expected that PEPCO would be a primary, and often sole, provider for many federal facilities in its service territory. Assessing their track record specifically on federal contracts would involve reviewing past performance evaluations, any documented disputes or contract failures, and their history of compliance with federal procurement regulations. While the current award is sole-source, this does not inherently reflect negatively on PEPCO's past performance but rather on the procurement method. Generally, established utility companies like PEPCO are expected to have a reliable infrastructure and service delivery capability, which is critical for essential services like electricity.

How does the duration of this contract (10 years) impact its overall value and risk profile?

The 10-year duration of this $27.6 million utility services contract presents a mixed impact on its value and risk profile. On the positive side, a long-term contract provides stability and predictability for the Nuclear Regulatory Commission (NRC), ensuring a continuous supply of essential electricity transmission and control services without the need for frequent re-procurement. This can reduce administrative burden and ensure operational continuity. However, a long duration also increases risk, particularly concerning pricing. If energy market prices were to decrease significantly over the next decade, the NRC could be locked into paying a higher-than-market rate for the remainder of the contract, representing a potential loss of value for taxpayers. Furthermore, long-term sole-source contracts can reduce the incentive for the contractor to innovate or offer cost reductions, as they have a guaranteed revenue stream.

Industry Classification

NAICS: Utilities › Electric Power Generation, Transmission and Distribution › Electric Bulk Power Transmission and Control

Product/Service Code: UTILITIES AND HOUSEKEEPING › UTILITIES

Competition & Pricing

Extent Competed: NOT COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Pepco Holdings LLC (UEI: 105895010)

Address: 701 9TH STREET, N.W., WASHINGTON, DC, 20068

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $27,644,090

Exercised Options: $27,644,090

Current Obligation: $27,644,090

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: GS00P00BSD0138

IDV Type: IDC

Timeline