GSA's Guidance and Oversight Concerning Areawide Utility Contracts

GSA is authorized by statute to prescribe policies and methods governing the acquisition and supply of utility services for federal agencies. Competition to provide such services is often unavailable within the market established by a utilitys regulators. In such cases, GSA and utility service providers enter into areawide contracts to cover the service needs of federal agencies within the utilitys franchise territory. The franchise territory is a geographical area that a utility has a right to serve on the basis of a franchise or other legal means. Areawide contracts provide a preestablished contractual vehicle for ordering utility services such as electricity and natural gas. According to the Federal Acquisition Regulation, areawide contracts generally provide for ordering utility services at rates approved andor established by a regulatory body such as a public utility commission and published in a tariff or rate schedule. Any federal agency having a requirement for utility services within an area covered by an areawide contract is required to acquire the services under that contract unless service is available from more than one supplier. If service is available from more than one supplier, the Federal Acquisition Regulation requires that the service be acquired using competitive acquisition procedures.