Overview
This section prescribes mandatory frequencies and objectives for reviewing utility service invoices and accounts to ensure billing accuracy and cost-effectiveness. It distinguishes between routine monthly administrative checks and comprehensive annual technical evaluations of utility rates and market alternatives.
Key Rules
- Monthly Review Mandate: Agencies must review all utility service invoices every month specifically to ensure billing accuracy.
- Annual Review (Above SAT): Accounts with annual values exceeding the simplified acquisition threshold (SAT) must undergo a formal annual review.
- Annual Review (Below SAT): For accounts at or below the SAT, annual reviews are discretionary and should be conducted only when advantageous to the Government.
- Objectives of Annual Reviews:
- Verify the supplier is providing service under the most economical applicable rate.
- Examine competitive markets for potentially better service offerings.
- Data Requirements: Annual reviews must be based on the specific usage, conditions, and service characteristics of each delivery point over the preceding 12-month period.
- Immediate Action: If a more advantageous rate is identified during a review, the agency is required to request an immediate rate change from the supplier.
Practical Implications
- Contracting Officers and facility managers must implement a systematic tracking process for utility data to ensure that fluctuating usage patterns do not result in the government remaining on an obsolete or overpriced rate schedule.
- In deregulated markets, these reviews necessitate active market research beyond the current provider to satisfy the requirement of examining competitive service offerings.