DoD's $21M Natural Gas Contract with City of Philadelphia Raises Competition Concerns
Contract Overview
Contract Amount: $20,950,024 ($21.0M)
Contractor: City of Philadelphia
Awarding Agency: Department of Defense
Start Date: 2011-02-07
End Date: 2022-09-30
Contract Duration: 4,253 days
Daily Burn Rate: $4.9K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Energy
Official Description: UESC SERVICES NSA MECHANICSBURG, PNYA
Place of Performance
Location: PHILADELPHIA, PHILADELPHIA County, PENNSYLVANIA, 19106
Plain-Language Summary
Department of Defense obligated $21.0 million to CITY OF PHILADELPHIA for work described as: UESC SERVICES NSA MECHANICSBURG, PNYA Key points: 1. Significant contract value of $20.95 million over its life. 2. Sole-source award limits competitive pricing and innovation. 3. Long contract duration (over 13 years) may not reflect current market rates. 4. Lack of competition is a key risk factor for taxpayer value.
Value Assessment
Rating: questionable
The contract value of $20.95 million over 13 years for natural gas distribution is difficult to benchmark without specific unit costs. However, the lack of competition suggests potential overpricing compared to what might be achieved in a competitive market.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning there was no open competition. This significantly limits the government's ability to discover the lowest possible price and may lead to less favorable terms.
Taxpayer Impact: The absence of competition likely results in higher costs for taxpayers than if multiple vendors had vied for the contract.
Public Impact
Taxpayers may be overpaying for natural gas due to the lack of competitive bidding. The long-term nature of the contract could lock the government into potentially suboptimal pricing. Limited transparency into the pricing mechanisms used for this sole-source award.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Long contract duration
- Lack of price transparency
Positive Signals
- Essential utility service provided
- Established vendor relationship
Sector Analysis
This contract falls under the utility services sector, specifically natural gas distribution. Spending in this sector can vary widely, but competitive bidding is crucial for ensuring cost-effectiveness, especially for long-term agreements.
Small Business Impact
There is no indication that small businesses were involved in this contract, as it was awarded to a municipal entity. This represents a missed opportunity for small business participation.
Oversight & Accountability
The sole-source nature of this award warrants further oversight to ensure the pricing is fair and reasonable, despite the lack of competition. Accountability for the justification of the sole-source award is important.
Related Government Programs
- Natural Gas Distribution
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award limits competition.
- Potential for inflated pricing due to lack of competition.
- Long contract duration may not reflect current market conditions.
- Lack of transparency in pricing justification.
- Missed opportunity for small business participation.
Tags
natural-gas-distribution, department-of-defense, pa, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $21.0 million to CITY OF PHILADELPHIA. UESC SERVICES NSA MECHANICSBURG, PNYA
Who is the contractor on this award?
The obligated recipient is CITY OF PHILADELPHIA.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Navy).
What is the total obligated amount?
The obligated amount is $21.0 million.
What is the period of performance?
Start: 2011-02-07. End: 2022-09-30.
What was the justification for awarding this natural gas contract on a sole-source basis, and was a market research analysis conducted to confirm no other viable suppliers existed?
The justification for a sole-source award is critical for understanding why competition was bypassed. A thorough market research analysis should have been performed to identify potential alternative suppliers and determine if competition was truly not feasible. Without this information, it's difficult to assess if the government adequately explored options to secure the best value and pricing for taxpayers.
How does the per-unit cost of natural gas under this contract compare to similar government contracts or prevailing market rates in Pennsylvania during the contract period?
Benchmarking the per-unit cost is essential for evaluating value. Comparing this contract's pricing against similar government contracts awarded competitively or against prevailing market rates in Pennsylvania during the 2011-2022 period would reveal potential overpayment. The lack of competition makes such a comparison even more important to ensure fair pricing.
What mechanisms were in place to ensure the effectiveness and efficiency of natural gas delivery and service quality from the City of Philadelphia over the 13-year contract term?
Given the long duration and sole-source nature, performance metrics and service level agreements are crucial for ensuring effectiveness. Understanding the quality control measures, reporting requirements, and any penalties for non-performance would indicate how the government ensured efficient service delivery and maintained accountability throughout the contract's life.
Industry Classification
NAICS: Utilities › Natural Gas Distribution › Natural Gas Distribution
Product/Service Code: UTILITIES AND HOUSEKEEPING › UTILITIES
Competition & Pricing
Extent Competed: NOT AVAILABLE FOR COMPETITION
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 800 W MONTGOMERY AVE, PHILADELPHIA, PA, 19122
Business Categories: Category Business, Government, U.S. Local Government, U.S. National Government, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $24,332,588
Exercised Options: $24,332,588
Current Obligation: $20,950,024
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2011-02-07
Current End Date: 2022-09-30
Potential End Date: 2022-09-30 00:00:00
Last Modified: 2021-10-19
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