GSA's $47M electrical service contract for IRS building awarded to Potomac Electric Power Co

Contract Overview

Contract Amount: $47,073,600 ($47.1M)

Contractor: Potomac Electric Power CO

Awarding Agency: General Services Administration

Start Date: 2006-06-06

End Date: 2015-04-30

Contract Duration: 3,250 days

Daily Burn Rate: $14.5K/day

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: ELECTRICAL SERVICE FOR THE IRS, NEW CARROLLTON FEDERAL BUILDING

Place of Performance

Location: LANHAM, PRINCE GEORGE'S County, MARYLAND, 20706

State: Maryland Government Spending

Plain-Language Summary

General Services Administration obligated $47.1 million to POTOMAC ELECTRIC POWER CO for work described as: ELECTRICAL SERVICE FOR THE IRS, NEW CARROLLTON FEDERAL BUILDING Key points: 1. Contract awarded for electrical distribution services, indicating a need for reliable power infrastructure. 2. The contract duration of 3250 days (approx. 9 years) suggests a long-term need for these services. 3. Awarded as a Firm Fixed Price contract, which shifts cost risk to the contractor. 4. The contract was awarded to a single vendor, Potomac Electric Power Co. 5. The contract value of $47,073,600 over its term implies significant annual spending on utility services. 6. The service area is Maryland, specifically New Carrollton.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific service level agreements or detailed cost breakdowns. However, the substantial value over a nearly 9-year period suggests a significant investment in maintaining critical infrastructure. Comparing this to similar long-term utility contracts for federal buildings would provide better context for value for money. The firm fixed-price nature provides budget certainty but may not reflect the most competitive pricing if alternatives were not thoroughly explored.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis to Potomac Electric Power Co. This suggests that the General Services Administration (GSA) likely determined that only one vendor could provide the necessary electrical distribution services for the New Carrollton Federal Building. Sole-source awards can sometimes lead to higher prices due to the lack of competition, but may be justified if there are unique technical requirements or existing infrastructure dependencies.

Taxpayer Impact: Taxpayers may not have received the benefit of competitive pricing, potentially leading to a higher overall cost for these essential utility services.

Public Impact

Federal employees working at the IRS New Carrollton Federal Building benefit from reliable electrical power. The contract ensures the continuous operation of essential government services housed within the facility. The geographic impact is localized to New Carrollton, Maryland. The contract supports the operational needs of the federal government, indirectly impacting the workforce by ensuring a functional work environment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition in a sole-source award could lead to suboptimal pricing.
Long-term contracts may not adapt well to evolving energy technologies or market price fluctuations.
Dependence on a single provider for critical infrastructure poses a risk if the provider experiences service disruptions.

Positive Signals

Firm Fixed Price contract provides budget certainty for the agency.
Long contract duration indicates a stable, long-term need and commitment to infrastructure.
Award to an established utility provider suggests a high likelihood of reliable 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 highly regulated environments, especially for essential infrastructure like electricity. Federal agencies rely on such contracts to ensure the continuous operation of their facilities. Comparable spending benchmarks would involve analyzing utility costs for similar-sized federal buildings across different regions, considering factors like local energy rates and infrastructure complexity.

Small Business Impact

There is no indication that this contract involved small business set-asides or subcontracting opportunities. As a sole-source award to a large utility provider, it is unlikely to have directly benefited the small business ecosystem in terms of prime contracting. Further analysis would be needed to determine if any subcontracting occurred through the prime contractor.

Oversight & Accountability

Oversight for this contract would primarily fall under the General Services Administration (GSA), specifically the Public Buildings Service. Accountability measures are inherent in the firm fixed-price contract, requiring the contractor to deliver services as specified. Transparency may be limited due to the sole-source nature of the award, but contract details and performance reports are typically available through federal procurement databases. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Federal Building Operations and Maintenance
Utility Services Contracts
General Services Administration Procurement
IRS Facility Management

Risk Flags

Sole-source award may limit price competition.
Long-term contract duration could lead to price inflexibility.
Dependence on a single utility provider carries inherent service continuity risks.

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $47.1 million to POTOMAC ELECTRIC POWER CO. ELECTRICAL SERVICE FOR THE IRS, NEW CARROLLTON FEDERAL BUILDING

Who is the contractor on this award?

The obligated recipient is POTOMAC ELECTRIC POWER CO.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $47.1 million.

What is the period of performance?

Start: 2006-06-06. End: 2015-04-30.

What is the historical spending pattern for electrical services at the New Carrollton Federal Building prior to this contract?

Detailed historical spending data for electrical services at the New Carrollton Federal Building prior to this specific contract (awarded in 2006) is not readily available in the provided data snippet. However, the contract's value of $47,073,600 over its approximately 9-year term suggests an average annual expenditure of roughly $5.2 million for electrical power distribution. This figure represents a significant and consistent investment in maintaining the facility's power infrastructure. Understanding past spending would require accessing GSA's historical procurement records or facility management budgets for the specific building over previous periods to identify any prior contracts or utility bills.

How does the per-unit cost of electricity under this contract compare to market rates in Maryland during the contract period?

Determining the precise per-unit cost of electricity under this contract is difficult without access to the detailed pricing structure within the Firm Fixed Price agreement. The contract value is an aggregate amount for the entire service period. To compare with market rates in Maryland, one would need to obtain the average commercial or industrial electricity rates from the Maryland Public Service Commission or relevant utility regulators for the years between 2006 and 2015. This comparison would involve estimating the total kilowatt-hours consumed annually by the facility and dividing the contract's annual value by that estimate, then comparing it to the prevailing market price per kWh. Given the sole-source nature, it's possible the negotiated rate was not the absolute lowest available.

What specific electrical services are covered under this $47 million contract?

The contract specifies 'Electric Power Distribution' as the service. This typically encompasses the provision and maintenance of the electrical infrastructure necessary to deliver power to the New Carrollton Federal Building. This includes, but is not limited to, the operation of substations, transformers, switchgear, and distribution lines that supply electricity to the facility. It ensures a consistent and reliable flow of power for all operations within the building. The exact scope would be detailed in the contract's Statement of Work (SOW), which would outline specific maintenance schedules, emergency response protocols, and any required upgrades or repairs to the distribution system.

What is Potomac Electric Power Co.'s track record with similar federal contracts?

Potomac Electric Power Co. (PEPCO) is a major utility provider serving the Washington D.C. metropolitan area, including Maryland. As such, it is highly probable that PEPCO has a long history of providing electrical services to numerous federal facilities within its service territory. While this specific contract is a sole-source award for distribution services, PEPCO likely holds other contracts or agreements with federal agencies for power supply and infrastructure maintenance. Assessing their track record would involve reviewing their performance history on other government contracts, looking for any past issues related to reliability, billing, or service quality, and examining their overall financial stability and operational capacity as a utility provider.

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

The primary risk associated with a sole-source award for essential utility services like electrical power distribution is the potential lack of competitive pricing. Without multiple bidders vying for the contract, the awarded price may be higher than what could have been achieved through a competitive process. This can lead to increased costs for taxpayers. Additionally, a sole-source contract can reduce the incentive for the contractor to innovate or improve service quality beyond the minimum requirements, as there is no direct competition to outperform. There's also a risk of vendor lock-in, making it difficult and potentially costly to switch providers in the future if performance issues arise or market conditions change significantly.

Industry Classification

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

Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D

Contractor Details

Address: P O BOX 37605, WASHINGTON, DC, 98

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $47,073,600

Exercised Options: $47,073,600

Current Obligation: $47,073,600

Parent Contract

Parent Award PIID: GS00P90BSD0027

IDV Type: IDC

Timeline