GSA's $28.25M electrical services contract for Denver Federal Center awarded without competition

Contract Overview

Contract Amount: $28,253,744 ($28.3M)

Contractor: Public Service Company of Colorado

Awarding Agency: General Services Administration

Start Date: 2006-09-15

End Date: 2016-01-21

Contract Duration: 3,415 days

Daily Burn Rate: $8.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: ELECTRICAL SERVICES FOR ALL BUILDINGS LOCATED AT THE DENVER FEDERAL CENTER.

Place of Performance

Location: DENVER, JEFFERSON County, COLORADO, 80225

State: Colorado Government Spending

Plain-Language Summary

General Services Administration obligated $28.3 million to PUBLIC SERVICE COMPANY OF COLORADO for work described as: ELECTRICAL SERVICES FOR ALL BUILDINGS LOCATED AT THE DENVER FEDERAL CENTER. Key points: 1. Contract awarded on a sole-source basis, raising questions about price discovery and potential for overpayment. 2. Long contract duration of 3,415 days (over 9 years) suggests a need for ongoing, critical infrastructure support. 3. The contract's fixed-price nature provides cost certainty but may limit flexibility for unforeseen changes. 4. Lack of competition indicates potential market concentration or specific contractor capabilities required. 5. Performance context is limited due to the 'NOT COMPETED' status, making direct value assessment challenging. 6. Sector positioning is within essential building operations and maintenance for federal facilities.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is difficult without competitive data. The $28.25 million total obligation over approximately 9 years for electrical services at a large federal center suggests a significant but potentially variable annual spend. Without comparable sole-source contracts or market research data, it's hard to definitively assess if the pricing was optimal. The fixed-price structure offers predictability, but the absence of competition means there's no direct market validation of the rates paid.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was explicitly marked as 'NOT COMPETED,' indicating a sole-source award. The reasons for this designation are not provided but could stem from unique capabilities, urgent needs, or a lack of available alternatives. The absence of a competitive bidding process means that multiple vendors did not have the opportunity to offer their services, which typically drives down prices and encourages innovation.

Taxpayer Impact: Taxpayers may have paid a premium due to the lack of competitive pressure. Without competing the requirement, the government did not benefit from the potential cost savings and improved service offerings that a competitive environment usually fosters.

Public Impact

Federal employees and operations at the Denver Federal Center benefit from reliable electrical infrastructure. Ensures continuity of government services by maintaining essential building systems. Supports the physical security and operational integrity of a major federal campus. Indirectly impacts the workforce by providing a stable and functional work environment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about potential overpricing and suboptimal value for taxpayer dollars.
Sole-source awards can limit opportunities for new or smaller businesses to enter the federal contracting space.
Long contract duration without re-competition might indicate a missed opportunity for cost savings through market resets.

Positive Signals

Ensures continuity of essential electrical services for a critical federal facility.
Fixed-price contract provides budget certainty for the agency.
The award to Public Service Company of Colorado suggests a reliance on established utility providers for infrastructure needs.

Sector Analysis

This contract falls within the Utilities and Power Generation sector, specifically focusing on the distribution and maintenance of electrical services for federal buildings. The market for such services is typically characterized by established utility providers and specialized electrical contractors. Federal agencies often rely on these services to maintain the operational integrity of their facilities. The total obligation of $28.25 million over nearly a decade for a single large federal center is substantial, reflecting the critical nature and scale of maintaining power infrastructure.

Small Business Impact

The data indicates this contract was not competed and does not specify any small business set-aside or subcontracting requirements. Therefore, it is unlikely to have directly benefited small businesses through set-asides. The absence of competition also means there was no explicit mechanism to encourage small business participation as subcontractors, though the prime contractor may have engaged them independently.

Oversight & Accountability

Oversight for this contract would primarily fall under the General Services Administration (GSA), specifically the Public Buildings Service. As a sole-source award, scrutiny might be higher regarding justification and pricing. Transparency is limited by the lack of a competitive process. Inspector General oversight would apply to ensure proper use of funds and prevent fraud, waste, and abuse, particularly given the contract's value and duration.

Related Government Programs

Federal Building Operations and Maintenance
Utility Services Contracts
Infrastructure Modernization Programs
Energy Management Services

Risk Flags

Sole-source award lacks competitive justification.
Potential for non-optimal pricing due to lack of competition.
Limited transparency regarding the necessity of sole-source procurement.
Long contract duration without re-competition.

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $28.3 million to PUBLIC SERVICE COMPANY OF COLORADO. ELECTRICAL SERVICES FOR ALL BUILDINGS LOCATED AT THE DENVER FEDERAL CENTER.

Who is the contractor on this award?

The obligated recipient is PUBLIC SERVICE COMPANY OF COLORADO.

Which agency awarded this contract?

Awarding agency: General Services Administration (Public Buildings Service).

What is the total obligated amount?

The obligated amount is $28.3 million.

What is the period of performance?

Start: 2006-09-15. End: 2016-01-21.

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

The provided data indicates the contract was 'NOT COMPETED' but does not offer the specific justification. Typically, sole-source awards are made when only one responsible source is available or capable of meeting the agency's needs. This could be due to unique technical requirements, proprietary technology, urgent and compelling circumstances, or a lack of market research indicating other viable options. Without further documentation from the GSA, the precise reason remains unknown, but it implies a perceived necessity to contract with Public Service Company of Colorado without exploring alternatives.

How does the per-year cost of this contract compare to similar federal electrical service contracts?

Calculating a precise per-year cost requires dividing the total obligation ($28,253,743.66) by the contract duration in years. The duration is listed as 3,415 days, which is approximately 9.35 years (3415 / 365.25). This yields an average annual cost of roughly $3.02 million. However, direct comparison is challenging without knowing the specific services rendered, the size and complexity of the Denver Federal Center's electrical infrastructure, and the prevailing market rates for similar sole-source contracts. Competitive contracts often yield lower per-unit costs due to market pressures, making a direct benchmark difficult for this sole-source award.

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

The primary risk of a sole-source award for essential services like electrical power distribution is the potential for inflated pricing due to the absence of competitive bidding. Without market pressure, the contractor may not be incentivized to offer the most cost-effective solution. Another risk is vendor lock-in, where the agency becomes dependent on a single provider, potentially limiting future flexibility or access to innovation. Furthermore, a lack of competition can reduce transparency and make it harder to ensure the government is receiving the best possible value for taxpayer money. There's also a risk that the chosen vendor's capabilities might not be as robust as those available in a broader market.

What does the contract's fixed-price type imply about cost management and potential overruns?

A Firm Fixed Price (FFP) contract type, as indicated for this award, means the price is set and not subject to adjustment based on the contractor's cost experience. This provides the government with cost certainty and protects against cost overruns on the contractor's part. The contractor assumes the risk of cost increases. For the government, this implies that the $28.25 million represents the maximum liability. However, it does not guarantee that the contractor achieved the work at the lowest possible cost, as the price was determined without competition.

How has federal spending on electrical services for buildings evolved over the contract's period?

The contract spanned from September 15, 2006, to January 21, 2016. Analyzing federal spending trends on electrical services during this period would require broader data analysis beyond this single contract. However, general trends likely included increasing demand for energy efficiency, potential fluctuations in energy prices, and ongoing investments in maintaining aging federal infrastructure. Without specific data on annual spending under this contract, it's impossible to detail its spending pattern relative to broader federal trends. The total obligation suggests a consistent need throughout the contract's life.

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 COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Xcel Energy Inc. (UEI: 848381245)

Address: 1225 17TH ST 12TH FLOOR, DENVER, CO, 80202

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $29,253,744

Exercised Options: $28,253,744

Current Obligation: $28,253,744

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: GS00P06BSD0385

IDV Type: IDC

Timeline