NASA's $104.6M electric power distribution contract with Potomac Electric Power Co. awarded in 2002
Contract Overview
Contract Amount: $104,600,106 ($104.6M)
Contractor: Potomac Electric Power CO
Awarding Agency: National Aeronautics and Space Administration
Start Date: 2002-02-15
End Date: 2011-04-30
Contract Duration: 3,361 days
Daily Burn Rate: $31.1K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: ELECTRIC SERVICES
Place of Performance
Location: GREENBELT, PRINCE GEORGE'S County, MARYLAND, 20771
State: Maryland Government Spending
Plain-Language Summary
National Aeronautics and Space Administration obligated $104.6 million to POTOMAC ELECTRIC POWER CO for work described as: ELECTRIC SERVICES Key points: 1. Contract value represents a significant, long-term investment in essential utility services. 2. Sole-source award suggests limited market alternatives or specific infrastructure integration needs. 3. Long contract duration (over 9 years) indicates a stable, ongoing requirement for services. 4. Fixed-price contract type offers budget certainty but may limit contractor incentive for cost savings. 5. Performance period spans a critical era of NASA's operational history. 6. Geographic concentration in Maryland points to specific facility needs.
Value Assessment
Rating: fair
Benchmarking the value of this contract is challenging due to the specific nature of utility services and the long duration. The total value of over $104 million spread across more than 9 years suggests an average annual spend of approximately $11.6 million. Without comparable sole-source utility contracts for federal facilities of similar size and complexity, a precise value-for-money assessment is difficult. However, the fixed-price nature provides cost predictability for NASA.
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 typically occurs when a single provider possesses unique capabilities, infrastructure, or when it's impractical or uneconomical to solicit bids from others. For utility services, this is often the case due to existing infrastructure and service territories.
Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers if competition would have driven prices down. However, in cases of essential services like electricity where a single provider is necessary, the focus shifts to ensuring fair pricing and efficient service delivery.
Public Impact
The primary beneficiary is NASA, ensuring continuous and reliable electric power supply to its Maryland facilities. This contract supports the operational continuity of critical NASA research, development, and administrative functions. The geographic impact is localized to NASA installations within Potomac Electric Power Co.'s service territory in Maryland. Workforce implications are primarily related to the utility provider's personnel responsible for maintaining and delivering electric power.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition may have resulted in a higher price than a competed contract.
- Long-term fixed-price contracts can insulate the contractor from market fluctuations, potentially reducing upside for the government.
- Sole-source nature limits transparency into the pricing structure and justification.
Positive Signals
- Ensures reliable and continuous power supply, critical for NASA's mission operations.
- Fixed-price contract provides budget certainty for NASA.
- Long duration suggests a stable and established relationship, potentially leading to efficient service delivery.
Sector Analysis
This contract falls within the Utilities and Energy sector, specifically focusing on electric power distribution. The market for utility services is often characterized by natural monopolies or heavily regulated entities due to the extensive infrastructure required. Federal agencies like NASA rely on these established providers to ensure consistent and reliable power for their operations, making long-term agreements common.
Small Business Impact
This contract does not appear to have a small business set-aside component, as indicated by 'ss' being false. There is no information provided regarding subcontracting plans or their impact on the small business ecosystem. Given the nature of utility services, it is less likely to involve significant subcontracting opportunities for small businesses.
Oversight & Accountability
Oversight for this contract would typically be managed by NASA contracting officers and program managers responsible for ensuring service delivery and adherence to contract terms. Transparency is limited due to the sole-source nature. Inspector General jurisdiction would apply to any allegations of fraud, waste, or abuse related to the contract.
Related Government Programs
- NASA Facility Operations Contracts
- Federal Utility Service Contracts
- Electric Power Grid Infrastructure
Risk Flags
- Sole-source award lacks competitive pricing pressure.
- Long duration may reduce flexibility and increase risk of overpayment if costs decrease.
- Fixed-price contract limits contractor incentive for cost efficiency beyond meeting minimum requirements.
Tags
sector-other, agency-nasa, geography-maryland, contract-type-firm-fixed-price, competition-level-sole-source, size-category-large, service-electric-power-distribution, duration-long-term, award-type-purchase-order
Frequently Asked Questions
What is this federal contract paying for?
National Aeronautics and Space Administration awarded $104.6 million to POTOMAC ELECTRIC POWER CO. ELECTRIC SERVICES
Who is the contractor on this award?
The obligated recipient is POTOMAC ELECTRIC POWER CO.
Which agency awarded this contract?
Awarding agency: National Aeronautics and Space Administration (National Aeronautics and Space Administration).
What is the total obligated amount?
The obligated amount is $104.6 million.
What is the period of performance?
Start: 2002-02-15. End: 2011-04-30.
What was the specific justification for awarding this contract on a sole-source basis?
The provided data indicates the contract was awarded on a sole-source basis ('ct': 'NOT AVAILABLE FOR COMPETITION'). The specific justification for this sole-source award is not detailed in the provided data snippet. Typically, sole-source justifications for utility services stem from the existence of a single provider within a geographic area due to infrastructure limitations, regulatory requirements, or the impracticality of establishing competing infrastructure. For NASA facilities, this often means contracting with the incumbent utility company that already serves the area and possesses the necessary distribution network to reliably supply power. A formal Justification for Other than Full and Open Competition (JOFOC) would have been required and documented by the agency at the time of award.
How does the total contract value compare to typical annual spending on electric power for federal facilities of similar size?
The total contract value is $104.6 million over a period of approximately 9 years and 4 months (3361 days). This equates to an average annual expenditure of roughly $11.2 million ($104.6M / 9.36 years). Benchmarking this against similar federal facilities is complex, as power consumption varies significantly based on the facility's size, mission (e.g., research labs vs. administrative offices), operational tempo, and energy efficiency measures. However, for large, complex federal installations, an annual spend in the low double-digit millions for electricity is not uncommon. Without specific details on the NASA facilities covered, a precise comparison is difficult, but the figure suggests a substantial requirement for power.
What are the potential risks associated with a long-term, fixed-price sole-source contract for utility services?
A primary risk with a long-term, fixed-price sole-source contract is the potential for paying above-market rates due to the lack of competition. While the fixed price offers budget certainty, it can also mean the government misses out on potential cost savings if the contractor's actual costs decrease over time. Another risk is vendor lock-in; the agency becomes dependent on a single provider, potentially reducing leverage for negotiating future contracts or service improvements. Furthermore, if the contractor's performance falters, the sole-source nature can make transitioning to a new provider difficult and costly. Ensuring robust performance standards and oversight mechanisms within the contract is crucial to mitigate these risks.
What does the contract's duration (over 9 years) imply about NASA's long-term needs for electric power in Maryland?
The contract's extensive duration, spanning from February 2002 to April 2011 (over 9 years), strongly indicates that NASA had a stable, long-term, and predictable requirement for electric power at its Maryland facilities. Such a long commitment suggests that the electric power supply was considered a fundamental and enduring operational necessity, rather than a short-term or fluctuating need. This duration also implies a significant investment in the infrastructure and relationship required to ensure continuous service delivery, likely involving the utility provider's grid infrastructure and maintenance schedules tailored to NASA's ongoing mission activities.
Were there any performance issues or contract modifications noted during the life of this contract?
The provided data snippet does not contain information regarding specific performance issues, disputes, or modifications that may have occurred during the life of this contract (February 15, 2002 - April 30, 2011). To assess performance, one would need to consult contract line item details, performance reports, modification history, and potentially Inspector General reports related to this specific award. Without access to these detailed contract records, it is impossible to determine if the contractor met all obligations, if any issues arose, or how they were resolved.
Industry Classification
NAICS: Utilities › Electric Power Generation, Transmission and Distribution › Electric Power Distribution
Product/Service Code: UTILITIES AND HOUSEKEEPING › UTILITIES
Competition & Pricing
Extent Competed: NOT AVAILABLE FOR COMPETITION
Pricing Type: FIRM FIXED PRICE (J)
Contractor Details
Parent Company: Pepco Holdings LLC (UEI: 105895010)
Address: 701 NINTH ST, NW, WASHINGTON, DC, 98
Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $104,600,106
Exercised Options: $104,600,106
Current Obligation: $104,600,106
Timeline
Start Date: 2002-02-15
Current End Date: 2011-04-30
Potential End Date: 2011-04-30 00:00:00
Last Modified: 2011-07-20
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