NARA's electricity contract with Potomac Electric Power Co. awarded for over $19.1 million

Contract Overview

Contract Amount: $19,130,090 ($19.1M)

Contractor: Potomac Electric Power CO

Awarding Agency: National Archives and Records Administration

Start Date: 2010-10-01

End Date: 2017-09-30

Contract Duration: 2,556 days

Daily Burn Rate: $7.5K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: CONTINUE ELECTRICITY SERVICES AT ARCHIVES II.

Place of Performance

Location: COLLEGE PARK, PRINCE GEORGES County, MARYLAND, 20740

State: Maryland Government Spending

Plain-Language Summary

National Archives and Records Administration obligated $19.1 million to POTOMAC ELECTRIC POWER CO for work described as: CONTINUE ELECTRICITY SERVICES AT ARCHIVES II. Key points: 1. Value for money assessed against market rates for electricity distribution. 2. Competition dynamics indicate a full and open process, potentially leading to competitive pricing. 3. Risk indicators include contract duration and potential for price fluctuations in energy markets. 4. Performance context relies on consistent delivery of essential utility services. 5. Sector positioning within the energy utility market, serving a federal agency. 6. The contract's fixed-price nature offers some budget certainty. 7. Delivery order structure suggests flexibility in service needs over the contract period.

Value Assessment

Rating: good

The contract value of over $19.1 million for electricity services over approximately 7 years appears reasonable given the duration and the nature of utility services. Benchmarking against similar federal contracts for electricity distribution in the Maryland region would provide a more precise value assessment. The firm fixed-price structure helps mitigate some risk of cost overruns for the government, assuming the initial price was set competitively.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting that multiple vendors had the opportunity to bid. This level of competition is generally favorable for price discovery and achieving market-based pricing. The number of bidders is not specified, but the process itself implies a competitive environment was sought.

Taxpayer Impact: A full and open competition process is beneficial for taxpayers as it increases the likelihood of securing services at the most competitive price, preventing potential overpayment that could occur with less competitive methods.

Public Impact

The National Archives and Records Administration (NARA) benefits from reliable electricity services to maintain its facilities and preserve historical records. Essential utility services, specifically electric power distribution, are delivered to the Archives II facility. The geographic impact is localized to the facility in Maryland (MD). Workforce implications are minimal for the federal agency, as the service is provided by a utility company.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for energy price volatility impacting long-term costs despite fixed price.
Dependence on a single utility provider for a critical service.
Contract duration of nearly 7 years may not fully capture market shifts.

Positive Signals

Awarded through full and open competition, suggesting competitive pricing.
Firm fixed-price contract provides budget predictability.
Ensures continuous operation of critical federal infrastructure.

Sector Analysis

This contract falls within the energy utilities sector, specifically focusing on electricity distribution. The market for electricity is typically regulated, with established providers serving specific geographic areas. Federal agencies like NARA are significant consumers of utility services, and contracts for these services are common. Benchmarking would involve comparing the per-kilowatt-hour cost or overall contract value against similar large-scale electricity supply contracts for government facilities in the region.

Small Business Impact

There is no indication that this contract included a small business set-aside. As a utility service contract, it is likely awarded to a large, established utility provider. Subcontracting opportunities for small businesses are not explicitly detailed but could exist for maintenance or related support services if the primary contractor utilizes them.

Oversight & Accountability

Oversight for this contract would primarily fall under the National Archives and Records Administration's contracting officers and program managers. Accountability measures would involve monitoring service delivery and adherence to contract terms. Transparency is generally maintained through federal contract databases, though specific performance metrics might not be publicly detailed. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Federal Utility Contracts
Energy Services for Government Facilities
National Archives and Records Administration Procurement

Risk Flags

Long-term contract duration
Energy market price volatility risk
Dependence on single utility provider

Frequently Asked Questions

What is this federal contract paying for?

National Archives and Records Administration awarded $19.1 million to POTOMAC ELECTRIC POWER CO. CONTINUE ELECTRICITY SERVICES AT ARCHIVES II.

Who is the contractor on this award?

The obligated recipient is POTOMAC ELECTRIC POWER CO.

Which agency awarded this contract?

Awarding agency: National Archives and Records Administration (National Archives and Records Administration).

What is the total obligated amount?

The obligated amount is $19.1 million.

What is the period of performance?

Start: 2010-10-01. End: 2017-09-30.

What was the historical spending pattern for electricity services at NARA prior to this contract?

Analyzing historical spending for electricity at NARA prior to this contract (2010-2017) would require accessing prior contract data. Without specific prior contract details, it's difficult to establish a precise trend. However, federal agencies typically have ongoing needs for utilities, suggesting consistent spending. The value of this contract ($19.1M over ~7 years) implies an average annual expenditure of roughly $2.7 million. This figure should be compared to previous annual costs to identify any significant increases or decreases, which could be attributed to changes in energy prices, consumption, or contract scope. Understanding past spending helps contextualize the current contract's value and identify potential efficiencies or cost escalations over time.

How does the awarded price compare to market rates for electricity in Maryland during the contract period?

To assess the awarded price against market rates, one would need to compare the effective per-kilowatt-hour cost or the total contract value to average commercial or industrial electricity rates in Maryland between 2010 and 2017. Data from the U.S. Energy Information Administration (EIA) or state-level utility commissions could provide these benchmarks. Given that the contract is for distribution services, the price would encompass not just energy generation but also delivery infrastructure. The firm fixed-price nature suggests NARA aimed to lock in a rate, which could be advantageous if market prices rose significantly, or disadvantageous if they fell. A detailed analysis would involve calculating the average annual cost and comparing it to prevailing rates for similar consumption levels.

What are the primary risks associated with a long-term (nearly 7-year) fixed-price electricity contract?

The primary risks associated with a long-term, fixed-price electricity contract include potential price volatility in the energy market and changes in service needs. If market electricity prices decrease significantly over the contract period, NARA might be overpaying compared to current rates. Conversely, if prices surge, the fixed price protects NARA from increased costs. Another risk is the potential for the contractor to reduce service quality or investment in infrastructure if the fixed price becomes unprofitable due to unforeseen operational cost increases. Furthermore, the long duration might not allow NARA to take advantage of newer, more efficient technologies or alternative energy sources that become available during the contract term. The contract's structure as a delivery order also implies potential variability in the exact quantity of electricity consumed year-to-year.

What is the track record of Potomac Electric Power Co. (PEPCO) in serving federal government contracts?

Potomac Electric Power Company (PEPCO), now part of Exelon, has a long history of providing electricity services in the Washington D.C. metropolitan area, including Maryland and parts of Virginia. As a major utility provider, it is highly probable that PEPCO has served numerous federal government contracts over the years, including those with agencies located within its service territory, such as the National Archives. Assessing their specific track record on federal contracts would involve reviewing past performance evaluations, any documented disputes or contract terminations, and their history of compliance with federal procurement regulations. Generally, established utilities are expected to have robust systems for reliability and customer service, but specific contract performance can vary.

How does the competition level (full and open) typically influence the final price for utility services?

A full and open competition process for utility services generally exerts downward pressure on prices. When multiple qualified vendors can bid, they are incentivized to offer their most competitive rates to win the contract. This process allows the procuring agency, in this case, NARA, to solicit bids from various providers and select the one offering the best value, which often correlates with the lowest price for comparable quality and service. The presence of competition helps ensure that the awarded price reflects market conditions rather than being inflated due to a lack of alternatives. While specific details on the number of bidders aren't provided, the 'full and open' designation itself signals a commitment to leveraging market forces for cost efficiency.

Industry Classification

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

Product/Service Code: UTILITIES AND HOUSEKEEPING › UTILITIES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Exelon Corporation (UEI: 001807150)

Address: 701 9TH ST NW, WASHINGTON, DC, 20068

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $19,630,090

Exercised Options: $19,630,090

Current Obligation: $19,130,090

Actual Outlays: $34,471

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS00P10BSD0725

IDV Type: IDC

Timeline