VA awards $6.27M contract for chiller plant replacement to Paramount Construction Group, LLC

Contract Overview

Contract Amount: $6,265,470 ($6.3M)

Contractor: Paramount Construction Group, LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2023-05-11

End Date: 2026-07-06

Contract Duration: 1,152 days

Daily Burn Rate: $5.4K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 11

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: REPLACE CHILLER PLANT 521-19-103

Place of Performance

Location: BIRMINGHAM, JEFFERSON County, ALABAMA, 35233

State: Alabama Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $6.3 million to PARAMOUNT CONSTRUCTION GROUP, LLC for work described as: REPLACE CHILLER PLANT 521-19-103 Key points: 1. Contract value appears reasonable for a complex infrastructure project of this nature. 2. Full and open competition was utilized, suggesting a competitive bidding process. 3. The contract duration of 1152 days indicates a significant, multi-year undertaking. 4. The project is categorized under Commercial and Institutional Building Construction. 5. The award was made by the Department of Veterans Affairs, indicating a focus on federal facilities. 6. The contract type is Firm Fixed Price, which shifts cost risk to the contractor.

Value Assessment

Rating: good

The contract value of $6.27 million for replacing a chiller plant seems within a reasonable range for such a critical infrastructure project. Benchmarking against similar VA or other federal agency projects for building systems replacement would provide a more precise value-for-money assessment. The firm fixed price structure suggests that the initial bid was considered competitive and that cost overruns are primarily the contractor's responsibility, which is a positive indicator for cost control.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'Full and Open Competition After Exclusion of Sources,' which typically means that all responsible sources were permitted to submit a bid. The presence of 11 bids indicates a healthy level of competition for this project. A higher number of bidders generally leads to more competitive pricing and better value for the government.

Taxpayer Impact: The robust competition for this contract is beneficial for taxpayers as it likely drove down the final price and ensured the government received a fair market value for the essential services required for the chiller plant replacement.

Public Impact

The primary beneficiary is the Department of Veterans Affairs, which will receive an upgraded and reliable chiller plant. The services delivered include the complete replacement of an existing chiller plant, ensuring operational efficiency and reduced maintenance costs. The geographic impact is localized to the specific VA facility in Alabama where the plant is located. Workforce implications may include employment opportunities for construction workers, engineers, and project managers involved in the project.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for project delays given the complexity of infrastructure replacement.
Ensuring the new chiller plant meets all environmental and energy efficiency standards.
Managing the transition from the old system to the new without disrupting facility operations.

Positive Signals

Firm Fixed Price contract provides cost certainty.
Full and open competition suggests a competitive bid process.
Experienced contractor likely selected through a rigorous evaluation process.
Project addresses critical infrastructure needs for a federal agency.

Sector Analysis

The Commercial and Institutional Building Construction sector encompasses a wide range of projects, from new builds to major renovations and system replacements. Federal spending in this area is substantial, supporting the maintenance and modernization of government facilities. This contract for a chiller plant replacement fits within the broader category of building systems upgrades, which are crucial for operational continuity and energy efficiency in federal buildings. Comparable spending benchmarks would typically be found in construction cost indices and databases for similar institutional facilities.

Small Business Impact

The data indicates that this contract was awarded under full and open competition and does not specify any small business set-aside. Therefore, the direct impact on small business set-asides appears minimal for this specific award. However, the prime contractor, Paramount Construction Group, LLC, may engage small businesses as subcontractors to fulfill portions of the work, contributing indirectly to the small business ecosystem.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of Veterans Affairs' contracting officers and project managers. Accountability measures are embedded in the Firm Fixed Price contract terms, requiring the contractor to deliver the specified work within the agreed-upon budget. Transparency is generally maintained through federal contract databases like FPDS-NG, where award details are published. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

VA Facility Modernization Projects
Federal Building Infrastructure Upgrades
HVAC System Replacement Contracts
Large-Scale Construction Projects

Risk Flags

Potential for cost overruns if unforeseen conditions arise.
Risk of project delays impacting facility operations.
Ensuring compliance with all environmental and safety regulations.
Adequacy of contractor's proposed schedule and resources.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $6.3 million to PARAMOUNT CONSTRUCTION GROUP, LLC. REPLACE CHILLER PLANT 521-19-103

Who is the contractor on this award?

The obligated recipient is PARAMOUNT CONSTRUCTION GROUP, LLC.

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 $6.3 million.

What is the period of performance?

Start: 2023-05-11. End: 2026-07-06.

What is the track record of Paramount Construction Group, LLC with the Department of Veterans Affairs and on similar projects?

A review of Paramount Construction Group, LLC's contract history with the Department of Veterans Affairs (VA) and other federal agencies would be necessary to assess their track record. Key indicators to examine include past performance on projects of similar size, scope, and complexity, particularly those involving critical infrastructure like chiller plants. Evaluating on-time and on-budget performance, any past disputes or contract modifications, and client satisfaction ratings from previous VA engagements would provide valuable insights into their reliability and capability. Understanding their experience with firm-fixed-price contracts and their ability to manage complex construction schedules is also crucial for assessing risk.

How does the awarded price of $6.27 million compare to market rates for similar chiller plant replacement projects?

To benchmark the $6.27 million award, one would compare it against recent, similar chiller plant replacement projects undertaken by other federal agencies, state and local governments, or large private institutions. Factors such as project size (e.g., tonnage of chillers replaced), complexity of the existing infrastructure, geographic location (which influences labor and material costs), and the specific scope of work (e.g., demolition, installation, controls integration, testing) must be considered for a fair comparison. Industry cost estimating databases and construction cost indices can also provide reference points for typical per-square-foot or per-ton replacement costs in institutional settings. Without specific comparable data, it is difficult to definitively state if the price is high or low, but the number of bids suggests a competitive market.

What are the primary risks associated with this chiller plant replacement project, and how are they being mitigated?

Key risks for this project include potential construction delays due to unforeseen site conditions, integration issues with existing building systems, and the possibility of equipment malfunction or failure during the transition period. Mitigation strategies likely involve detailed site surveys prior to work commencement, robust project management and scheduling by the contractor, phased installation plans to minimize disruption, and thorough testing and commissioning protocols. The Firm Fixed Price contract shifts some financial risk to the contractor, incentivizing them to manage these risks effectively. The VA's oversight and quality assurance processes will also play a critical role in identifying and addressing risks throughout the project lifecycle.

What is the expected impact of this chiller plant replacement on the VA facility's operational efficiency and energy consumption?

Replacing an aging chiller plant with modern equipment is expected to significantly improve the VA facility's operational efficiency and reduce energy consumption. Newer chiller technologies are typically more energy-efficient, leading to lower utility costs and a reduced environmental footprint. Improved reliability will also minimize the risk of costly downtime and disruptions to facility services. The project specifications likely include performance requirements related to cooling capacity, energy efficiency ratios (EER), and potentially integration with building automation systems, all contributing to enhanced operational performance and cost savings over the lifespan of the new plant.

How has federal spending on building construction and infrastructure upgrades trended in recent years, and where does this contract fit?

Federal spending on building construction and infrastructure upgrades has generally seen fluctuations driven by infrastructure initiatives, agency modernization needs, and budget appropriations. The Department of Veterans Affairs, in particular, has ongoing requirements for maintaining and upgrading its extensive network of healthcare facilities. This $6.27 million contract for a chiller plant replacement is a component of that broader federal investment in facility infrastructure. Analyzing historical spending data for similar construction and renovation projects within the VA and across other agencies would reveal trends in contract values, types of work prioritized, and the overall level of investment in maintaining federal assets.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 11

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 230 HIGHPOINT DR, RIDGELAND, MS, 39157

Business Categories: Category Business, Limited Liability Corporation, Service Disabled Veteran Owned Business, Small Business, Sole Proprietorship, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $6,265,470

Exercised Options: $6,265,470

Current Obligation: $6,265,470

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C24719D0024

IDV Type: IDC

Timeline