VA awards $16.8M contract for patient area steam system upgrades, highlighting construction sector activity

Contract Overview

Contract Amount: $16,800,000 ($16.8M)

Contractor: Guardian Environmental Services CO Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2025-06-13

End Date: 2026-12-07

Contract Duration: 542 days

Daily Burn Rate: $31.0K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 8

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: PROJECT 512A5-21-304 UPGRADE STEAM SYSTEM PHASE V - PATIENT AREAS (CONSTRUCTION)

Place of Performance

Location: PERRY POINT, CECIL County, MARYLAND, 21902

State: Maryland Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $16.8 million to GUARDIAN ENVIRONMENTAL SERVICES CO INC for work described as: PROJECT 512A5-21-304 UPGRADE STEAM SYSTEM PHASE V - PATIENT AREAS (CONSTRUCTION) Key points: 1. Contract value of $16.8 million indicates significant investment in facility infrastructure. 2. The project focuses on essential patient area upgrades, suggesting a priority on healthcare environment quality. 3. A firm-fixed-price contract type aims to control costs and provide budget certainty. 4. The duration of 542 days suggests a complex and multi-phased upgrade process. 5. The contract was awarded to Guardian Environmental Services Co Inc, a single entity. 6. This award falls within the commercial and institutional building construction NAICS code.

Value Assessment

Rating: fair

The contract value of $16.8 million for a steam system upgrade appears substantial. Benchmarking against similar large-scale construction projects for healthcare facilities is necessary to fully assess value for money. The firm-fixed-price structure is a positive indicator for cost control. However, without specific details on the scope of work and the condition of the existing system, a definitive value assessment is challenging. The award amount is within a reasonable range for major infrastructure upgrades in institutional settings.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' which suggests that while competition was intended, specific criteria or circumstances led to the exclusion of some potential bidders. With 8 bidders identified, there was some level of competition, but the 'exclusion of sources' aspect warrants further investigation to understand if it limited the pool of qualified contractors. This type of competition can sometimes lead to less aggressive pricing compared to unrestricted full and open competition.

Taxpayer Impact: The limited competition, even with multiple bidders, may mean taxpayers did not benefit from the most aggressive pricing achievable through a broader bidding process. Understanding the reasons for source exclusion is key to assessing if taxpayer funds were used optimally.

Public Impact

Patients in VA facilities will benefit from improved steam systems, potentially leading to better environmental controls and comfort. The project delivers essential infrastructure upgrades to a critical healthcare facility. The geographic impact is localized to the facility where the upgrades are being performed, indicated by the 'MD' state code. The construction workforce will be engaged for the duration of the project, providing employment opportunities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'exclusion of sources' in the competition type raises questions about the breadth of market engagement and potential cost implications.
The contract duration of 542 days could indicate potential for delays or unforeseen complexities impacting the schedule.
Reliance on a single contractor for a large-scale project necessitates robust oversight to ensure performance and quality.

Positive Signals

The firm-fixed-price contract type provides cost certainty for the VA.
The award to Guardian Environmental Services Co Inc suggests they possess the necessary qualifications for this specialized construction work.
The project addresses critical infrastructure needs within a healthcare setting, prioritizing patient well-being.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a significant segment of the broader construction industry. This sector encompasses a wide range of projects, from office buildings to healthcare facilities. The $16.8 million value places this project as a substantial undertaking within this category. Comparable spending benchmarks for similar hospital or healthcare facility infrastructure upgrades would provide further context on the pricing and scope.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses (ss: false, sb: false). Therefore, the primary contractor, Guardian Environmental Services Co Inc, is likely a larger entity. There is no explicit information regarding subcontracting plans for small businesses within this award. The absence of a small business set-aside suggests that opportunities for small business participation may be limited unless proactively pursued by the prime contractor.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of Veterans Affairs' contracting officers and project managers. The firm-fixed-price nature of the contract implies a focus on adherence to the agreed-upon scope and price. Transparency will depend on the VA's public reporting practices regarding contract performance and any potential modifications. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

VA Capital Asset and Business Management
VA Facility Construction and Modernization
Healthcare Infrastructure Projects
Public Building Construction

Risk Flags

Limited competition due to source exclusion.
Potential for schedule delays given project duration.
Need for robust oversight due to project scale and complexity.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $16.8 million to GUARDIAN ENVIRONMENTAL SERVICES CO INC. PROJECT 512A5-21-304 UPGRADE STEAM SYSTEM PHASE V - PATIENT AREAS (CONSTRUCTION)

Who is the contractor on this award?

The obligated recipient is GUARDIAN ENVIRONMENTAL SERVICES CO INC.

Which agency awarded this contract?

Awarding agency: Department of Veterans Affairs (Department of Veterans Affairs).

What is the total obligated amount?

The obligated amount is $16.8 million.

What is the period of performance?

Start: 2025-06-13. End: 2026-12-07.

What is the specific scope of work for the steam system upgrade, and what is the condition of the existing system?

The provided data does not detail the specific scope of work for PROJECT 512A5-21-304, 'UPGRADE STEAM SYSTEM PHASE V - PATIENT AREAS (CONSTRUCTION).' It is identified as a construction project focused on steam systems within patient areas. To assess the value and potential risks, understanding the exact components of the upgrade (e.g., pipe replacement, boiler upgrades, insulation) and the current state of the existing infrastructure is crucial. Without this information, it's difficult to determine if the $16.8 million award is commensurate with the work required. Further documentation from the Department of Veterans Affairs would be needed to clarify the technical specifications and the rationale behind the project's necessity.

How does the $16.8 million contract value compare to similar VA steam system upgrade projects?

Comparing the $16.8 million contract value requires access to historical data on similar projects undertaken by the Department of Veterans Affairs or other federal agencies. Projects involving steam system upgrades in healthcare facilities can vary significantly in cost based on the size of the facility, the extent of the upgrade (e.g., Phase V suggests previous phases), and the complexity of the existing infrastructure. A preliminary assessment suggests this is a significant investment. To benchmark effectively, one would need to identify contracts with similar scope (e.g., full system replacement vs. partial upgrade), facility type (e.g., hospital, clinic), and geographic location. The 'definitive contract' type and 'firm fixed price' are standard for such projects, but the overall value relative to scope is the key metric for comparison.

What are the potential risks associated with a 542-day construction project for patient areas?

A 542-day (approximately 1.5 years) construction timeline for patient areas presents several potential risks. Schedule delays are a primary concern, which could arise from unforeseen site conditions, material shortages, labor issues, or coordination challenges with ongoing hospital operations. Disruptions to patient care and facility operations are also significant risks, requiring meticulous planning and phasing to minimize impact. Furthermore, cost overruns can occur if the firm-fixed-price contract does not adequately account for potential contingencies or if scope creep is not managed effectively. The contractor's ability to manage these risks, along with the VA's oversight, will be critical to the project's success.

What is the track record of Guardian Environmental Services Co Inc on similar federal contracts?

Guardian Environmental Services Co Inc's track record on federal contracts, particularly those involving large-scale construction and environmental services within healthcare settings, would be a key indicator of their capability. Information on past performance, including project completion times, adherence to budget, quality of work, and any history of disputes or contract modifications, is essential for assessing risk. While the award of this $16.8 million contract suggests they were deemed qualified, a deeper dive into their performance history on comparable projects, potentially through federal procurement databases or past performance reviews, would provide a more robust understanding of their reliability and expertise.

How does the 'full and open competition after exclusion of sources' impact price discovery and taxpayer value?

The 'full and open competition after exclusion of sources' (CT: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES) implies that while the initial intent was broad competition, specific criteria or circumstances led to the exclusion of certain potential bidders. This can limit the number of qualified offerors, potentially reducing the intensity of price competition compared to unrestricted full and open competition. If the exclusion was based on stringent, narrowly defined requirements, it might be justified to ensure specialized capabilities. However, if the exclusion was less critical, it could result in fewer bids and potentially higher prices for taxpayers. The fact that 8 bidders were considered suggests some level of market engagement, but understanding the rationale for exclusion is key to assessing the impact on price discovery and overall value.

Industry Classification

NAICS: Construction › Nonresidential Building Construction › Commercial and Institutional Building Construction

Product/Service Code: MAINT, REPAIR, ALTER REAL PROPERTY › MAINT, ALTER, REPAIR NONBUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 36C24525R0019

Offers Received: 8

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 70 ALBE DR, NEWARK, DE, 19702

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $16,800,000

Exercised Options: $16,800,000

Current Obligation: $16,800,000

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline