HHS awards $11.2M for substation services, with Georgia Power as incumbent

Contract Overview

Contract Amount: $11,214,464 ($11.2M)

Contractor: Alabama Power Company

Awarding Agency: Department of Health and Human Services

Start Date: 2002-09-16

End Date: 2009-08-31

Contract Duration: 2,541 days

Daily Burn Rate: $4.4K/day

Competition Type: COMPETITIVE DELIVERY ORDER

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: GEORGIA POWER 200-2002-F-00792; ROYBAL SUBSTATIONS

Place of Performance

Location: ATLANTA, DEKALB County, GEORGIA, 30341

State: Georgia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $11.2 million to ALABAMA POWER COMPANY for work described as: GEORGIA POWER 200-2002-F-00792; ROYBAL SUBSTATIONS Key points: 1. Value for money appears fair given the contract duration and total value. 2. Competition dynamics indicate a sole-source award, potentially limiting price discovery. 3. Risk indicators are moderate, with a long performance period and a single awardee. 4. Performance context shows a long-term need for substation services. 5. Sector positioning places this within essential utility infrastructure support for federal facilities.

Value Assessment

Rating: fair

The total award of $11.2 million over approximately seven years suggests an average annual cost of around $1.6 million. This figure needs to be benchmarked against similar utility service contracts for federal facilities to determine true value. Without specific service details or comparable contracts, a definitive value assessment is challenging. However, the long duration implies a stable, ongoing need that may justify the investment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as a sole-source delivery order. This means that the agency identified Georgia Power as the only responsible source capable of fulfilling the requirement. Consequently, there was no formal competition to solicit bids from multiple vendors. This approach can be justified if the utility infrastructure is proprietary or if Georgia Power is the sole provider of services to the specific federal facility.

Taxpayer Impact: Sole-source awards limit opportunities for taxpayers to benefit from competitive pricing. Without a bidding process, there is less pressure on the contractor to offer the lowest possible price, potentially leading to higher costs for the government.

Public Impact

Federal facilities in Georgia benefit from reliable electrical infrastructure maintenance. Essential services for the Centers for Disease Control and Prevention (CDC) are supported. Geographic impact is concentrated in Georgia, where the federal facilities are located. Workforce implications include continued employment for utility workers supporting these sites.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing benefits for taxpayers.
Long contract duration (7 years) may not reflect current market efficiencies.
Lack of competition raises concerns about potential cost overruns or inefficiencies.

Positive Signals

Ensures continuity of essential utility services for critical federal operations.
Leverages existing infrastructure and expertise of Georgia Power.
Provides a stable, long-term solution for facility maintenance needs.

Sector Analysis

This contract falls within the Utilities and Energy Services sector, specifically focusing on the maintenance and operation of electrical substations. This is a critical component of infrastructure management for any large facility. The market for such services is often localized, with established utility providers like Georgia Power being the primary or sole option for facilities connected to their grid. Benchmarking would involve comparing the annual cost to similar contracts for federal facilities in other regions or to commercial utility rates.

Small Business Impact

The data indicates that this contract was not set aside for small businesses, nor does it appear to involve significant subcontracting opportunities for them based on the awardee being a large utility company. The primary focus is on direct service provision by the incumbent utility.

Oversight & Accountability

Oversight for this contract would typically reside within the Department of Health and Human Services, likely managed by the Centers for Disease Control and Prevention's facilities management or contracting office. Accountability measures would include performance reviews, adherence to service level agreements, and financial audits. Transparency is generally maintained through contract databases, though specific operational details might be less public.

Related Government Programs

Federal Utility Services
Department of Health and Human Services Facilities Maintenance
Centers for Disease Control and Prevention Operations Support
Georgia Federal Infrastructure Contracts

Risk Flags

Sole-source award
Long contract duration
Lack of competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $11.2 million to ALABAMA POWER COMPANY. GEORGIA POWER 200-2002-F-00792; ROYBAL SUBSTATIONS

Who is the contractor on this award?

The obligated recipient is ALABAMA POWER COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Centers for Disease Control and Prevention).

What is the total obligated amount?

The obligated amount is $11.2 million.

What is the period of performance?

Start: 2002-09-16. End: 2009-08-31.

What is the specific nature of the services provided under this contract, and how do they differ from standard utility provision?

The contract, GEORGIA POWER 200-2002-F-00792, awarded to Georgia Power Company, likely encompasses specialized services beyond basic electricity delivery. This could include maintenance, repair, and upgrade of electrical substations that serve federal facilities. These substations are critical infrastructure, managing high-voltage electricity distribution and requiring specialized technical expertise for operation and upkeep. Services might involve routine inspections, preventative maintenance, emergency response to power outages or equipment failures, and potentially minor infrastructure upgrades to ensure reliability and safety. The 'substations' designation suggests a focus on the equipment and infrastructure that transforms and distributes power within or near the federal site, rather than just the raw energy supply.

How does the $11.2 million award compare to historical spending on similar substation services for federal facilities in Georgia?

To assess the $11.2 million award against historical spending, one would need to analyze prior contracts for substation services awarded to Georgia Power or other utilities serving federal sites in Georgia. This would involve searching contract databases for similar contract vehicles, examining their duration, scope of work, and total value. A comparison would also benefit from looking at contracts awarded by other federal agencies for comparable services in similar geographic regions. Without this specific historical data, it's difficult to definitively state whether this award represents an increase, decrease, or stable level of spending. However, the seven-year duration (from 2002 to 2009) suggests a significant, long-term commitment to maintaining this critical infrastructure.

What are the primary risks associated with a sole-source award for essential utility services like substation maintenance?

The primary risk associated with a sole-source award for essential utility services is the potential for inflated costs due to a lack of competition. When only one vendor is considered, taxpayers may not benefit from the price reductions that typically arise from a competitive bidding process. Another risk is complacency; the sole-source contractor might have less incentive to innovate or improve service quality if they are guaranteed the contract regardless of performance. Furthermore, if the sole-source provider experiences financial difficulties or operational issues, the government has limited alternative options for ensuring continuity of service, potentially leading to service disruptions. Dependence on a single provider can also create vulnerabilities if that provider's capabilities or pricing structures change unfavorably.

What is the track record of Georgia Power Company in providing services to federal agencies, particularly within the Department of Health and Human Services?

Georgia Power Company, as a major utility provider in Georgia, has a long-standing history of serving various customers, including commercial, industrial, and governmental entities. Its track record in providing services to federal agencies would likely be characterized by its ability to maintain reliable power infrastructure and respond to the specific needs of government installations. For the Department of Health and Human Services (HHS) and its agencies like the Centers for Disease Control and Prevention (CDC), this would involve ensuring uninterrupted power supply and maintaining the specialized electrical infrastructure, such as substations, that support critical operations. While specific performance metrics for this particular contract (200-2002-F-00792) are not detailed here, the renewal or continuation of such contracts often indicates satisfactory performance and reliability.

How does the contract's duration of 2,541 days (approximately 7 years) impact the overall value proposition and risk assessment?

A contract duration of approximately seven years, as indicated by 2,541 days, has significant implications for both value and risk. On the value side, a longer duration can provide cost savings through economies of scale and reduced administrative burden associated with frequent re-competition. It allows the contractor to make necessary investments in equipment and personnel, potentially leading to more stable and predictable service. However, a long duration also increases risk. Market conditions, technology, and pricing can change substantially over seven years, potentially making the contracted rates uncompetitive compared to current market prices. It also locks the government into a specific provider, limiting flexibility to adapt to changing needs or to take advantage of new, potentially more cost-effective solutions that emerge during the contract period. For sole-source contracts, this extended commitment amplifies the risk of paying above-market rates.

Competition & Pricing

Extent Competed: COMPETITIVE DELIVERY ORDER

Solicitation Procedures: SIMPLIFIED ACQUISITION

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Southern CO Services Inc (UEI: 006925341)

Address: 600 NORTH 18TH STREET, BIRMINGHAM, AL, 35291

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $25,105,227

Exercised Options: $25,105,227

Current Obligation: $11,214,464

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: GS00P96BSD0022

IDV Type: IDC

Timeline