THE FEDERAL GOVERNMENT IS THE NATION'S SINGLE largest energy consumer. It buys billions of dollars of electricity and natural gas from utilities each year. Deregulation, and the competition it brings, will change how the government buys these services.
For utilities that signed contracts with the government in the past few years, the future may be here. Utilities must read their contracts carefully; they must know which rules apply to them, and try to comply. Noncompliance can lead to criminal and civil penalties for the utility and its employees.
There is time, however, to help establish rules for this new competitive federal market. Utilities should try to capture the benefits of recent United States government procurement reforms. If done correctly, both sides, the utilities and the government will come out ahead.
A Safe Haven No More
Utility services have long occupied a niche in federal procurement law, but that niche may soon give way to risk and uncertainty.
In the "normal" contracting situation, the presumption arises that the federal government will acquire goods and services using full and open competition. %n1%n With utility services, however, the statutes and regulations run in virtually the opposite direction. Here, the federal procurement officers must justify the use of competitive procedures. If it cannot make a case for competitive procedures, then the government will acquire utility services without competition. %n2%n As a result, the government buys utility services without full and open competition.