NASA's $95M Electric Services Contract with Virginia Electric and Power Company Faces Scrutiny for Limited Competition
Contract Overview
Contract Amount: $95,159,208 ($95.2M)
Contractor: Virginia Electric and Power Company
Awarding Agency: National Aeronautics and Space Administration
Start Date: 2008-10-01
End Date: 2018-12-31
Contract Duration: 3,743 days
Daily Burn Rate: $25.4K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Pricing Type: FIRM FIXED PRICE
Sector: Energy
Official Description: ELECTRIC SERVICES FOR NASA LANGLEY RESEARCH CENTER
Place of Performance
Location: HAMPTON, HAMPTON CITY County, VIRGINIA, 23681
State: Virginia Government Spending
Plain-Language Summary
National Aeronautics and Space Administration obligated $95.2 million to VIRGINIA ELECTRIC AND POWER COMPANY for work described as: ELECTRIC SERVICES FOR NASA LANGLEY RESEARCH CENTER Key points: 1. The contract awarded to Virginia Electric and Power Company represents a significant expenditure of $95.16 million. 2. Limited competition is a key concern, potentially impacting price discovery and value for taxpayers. 3. The long duration of the contract (2008-2018) raises questions about ongoing market competitiveness and potential for renegotiation. 4. The sector is essential utility services, typically subject to regulatory oversight but can still present cost-saving opportunities.
Value Assessment
Rating: questionable
The contract's value is substantial at over $95 million. Without competitive bidding data, it's difficult to assess if the pricing is optimal compared to similar utility contracts for large federal facilities. The lack of available benchmark data makes a definitive assessment challenging.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was not available for competition, indicating a sole-source or limited-source award. This significantly restricts price discovery and may lead to higher costs for the government compared to a fully competitive environment. The rationale for limited competition needs further examination.
Taxpayer Impact: The lack of competition likely results in a higher cost to taxpayers than if the contract had been competitively bid. This represents a potential inefficiency in federal spending.
Public Impact
Taxpayers may be overpaying for essential electricity services due to the absence of competitive bidding. The long-term nature of the contract could lock the government into potentially unfavorable pricing for an extended period. NASA's reliance on a single provider for such a critical service raises questions about energy security and resilience.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition
- Lack of benchmark data
- Long contract duration
Positive Signals
- Essential service provision
- Firm fixed price contract type
Sector Analysis
This contract falls under the utility services sector, specifically electric power distribution. Federal agencies often rely on established utility providers, and while these are essential services, the procurement method is crucial for ensuring cost-effectiveness. Benchmarks for similar large-scale utility contracts are often influenced by regional pricing and regulatory environments.
Small Business Impact
There is no indication that small businesses were involved in this contract, as it was awarded to a large utility provider. The focus appears to be on securing a reliable energy source rather than promoting small business participation.
Oversight & Accountability
The limited competition aspect warrants further oversight to ensure the government is receiving fair value. Accountability for the procurement decision and the pricing structure should be clearly established.
Related Government Programs
- Electric Power Distribution
- National Aeronautics and Space Administration Contracting
- National Aeronautics and Space Administration Programs
Risk Flags
- Lack of competition may lead to inflated costs.
- Long contract duration limits flexibility.
- Absence of clear pricing benchmarks hinders value assessment.
- Potential for overpayment due to limited market leverage.
Tags
electric-power-distribution, national-aeronautics-and-space-administr, va, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
National Aeronautics and Space Administration awarded $95.2 million to VIRGINIA ELECTRIC AND POWER COMPANY. ELECTRIC SERVICES FOR NASA LANGLEY RESEARCH CENTER
Who is the contractor on this award?
The obligated recipient is VIRGINIA ELECTRIC AND POWER COMPANY.
Which agency awarded this contract?
Awarding agency: National Aeronautics and Space Administration (National Aeronautics and Space Administration).
What is the total obligated amount?
The obligated amount is $95.2 million.
What is the period of performance?
Start: 2008-10-01. End: 2018-12-31.
What was the specific justification for awarding this contract on a limited or sole-source basis, and were alternative competitive strategies considered?
The provided data states the contract was 'NOT AVAILABLE FOR COMPETITION'. This suggests a specific justification, potentially related to the nature of utility infrastructure or existing service agreements. However, without further details on the procurement process, it's impossible to ascertain if alternative competitive strategies were explored or deemed infeasible. A thorough review would be needed to understand the rationale and ensure it aligns with federal procurement regulations.
How does the per-unit cost of electricity under this contract compare to the average commercial or industrial rates in the Hampton Roads region during the contract period?
Direct comparison is challenging without specific usage data and the exact rate structure within the firm fixed price. However, given the limited competition, it's plausible that the government may not have achieved the most favorable rates available in the market. A detailed analysis comparing the contract's effective rates against regional benchmarks for similar consumption levels would be necessary to quantify any potential price discrepancies.
What mechanisms were in place to ensure the quality and reliability of electric services provided by Virginia Electric and Power Company throughout the contract's 10-year duration?
While the contract type is 'FIRM FIXED PRICE', the data does not detail specific performance metrics or quality assurance clauses. Typically, federal contracts for essential services include provisions for service level agreements, reliability standards, and penalties for non-performance. The agency's internal oversight and contract management would have been responsible for monitoring service delivery and ensuring compliance with any established quality standards.
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 AVAILABLE FOR COMPETITION
Solicitation Procedures: ONLY ONE SOURCE
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Dominion Energy, Inc. (UEI: 101715035)
Address: 120 TREDEGAR ST, RICHMOND, VA, 23219
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $95,159,208
Exercised Options: $95,159,208
Current Obligation: $95,159,208
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Parent Contract
Parent Award PIID: GS00P08BSD0560
IDV Type: IDC
Timeline
Start Date: 2008-10-01
Current End Date: 2018-12-31
Potential End Date: 2018-12-31 00:00:00
Last Modified: 2019-03-12
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