VA awards $5.5M contract for steam and condensate system upgrades to Paramount Construction Group, LLC

Contract Overview

Contract Amount: $5,511,847 ($5.5M)

Contractor: Paramount Construction Group, LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2023-06-05

End Date: 2026-04-30

Contract Duration: 1,060 days

Daily Burn Rate: $5.2K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: CORRECT FCA STEAM AND CONDENSATE

Place of Performance

Location: TUSCALOOSA, TUSCALOOSA County, ALABAMA, 35404

State: Alabama Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $5.5 million to PARAMOUNT CONSTRUCTION GROUP, LLC for work described as: CORRECT FCA STEAM AND CONDENSATE Key points: 1. Contract value appears reasonable given the scope of building construction services. 2. Full and open competition suggests a competitive bidding process. 3. Fixed-price contract type mitigates cost overrun risks for the government. 4. Contract duration of approximately 3 years allows for phased implementation. 5. Project located in Alabama, potentially impacting local construction workforce. 6. No small business set-aside, indicating larger firms were primary bidders.

Value Assessment

Rating: good

The contract value of $5.5 million for steam and condensate system upgrades seems within a reasonable range for a project of this nature, especially considering it involves commercial and institutional building construction. Benchmarking against similar VA or other federal projects for HVAC and building infrastructure upgrades would provide a more precise value-for-money assessment. The firm-fixed-price structure is generally favorable for the government, as it shifts cost risk to the contractor.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating that the solicitation was broadly advertised, and all responsible sources were permitted to submit offers. The presence of 5 bids suggests a healthy level of competition, which typically leads to better pricing and value for the government. This approach aims to ensure the government receives the most advantageous offer.

Taxpayer Impact: A competitive bidding process like this one helps ensure taxpayer dollars are used efficiently by driving down prices and encouraging contractors to offer their best value. The multiple bids received indicate that the government had options and was not limited to a single provider.

Public Impact

Veterans Affairs facilities will benefit from improved steam and condensate systems, potentially leading to more reliable operations and energy efficiency. The project will deliver essential building construction and infrastructure upgrades. Geographic impact is concentrated in Alabama, where the work will be performed. The contract is expected to create or sustain jobs within the construction sector in Alabama.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for delays if unforeseen site conditions are encountered during construction.
Reliance on a single contractor for a critical infrastructure upgrade.

Positive Signals

Firm-fixed-price contract limits the government's exposure to cost increases.
Full and open competition suggests a robust selection process.
Contract duration allows for structured project execution.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a broad category encompassing the construction, alteration, or repair of nonresidential buildings. The market for such services is substantial, driven by the ongoing need for facility maintenance, upgrades, and new construction across government and private entities. This specific project addresses critical infrastructure needs within the Department of Veterans Affairs, aligning with federal efforts to maintain and modernize its facilities.

Small Business Impact

The contract was not set aside for small businesses, and the data indicates 'sb' is false. This suggests that the competition was open to all responsible sources, including large businesses. While there's no explicit small business set-aside, the prime contractor, Paramount Construction Group, LLC, may still engage small businesses as subcontractors to fulfill specific project requirements or to meet broader subcontracting goals, though this is not guaranteed by the contract terms.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of Veterans Affairs contracting officers and project managers. Accountability measures are inherent in the firm-fixed-price contract type, which obligates the contractor to complete the work for the agreed-upon price. Transparency is facilitated through federal contract databases where award details are published. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

VA Facility Modernization Projects
Federal Building Construction Contracts
HVAC System Upgrades
Energy Efficiency Improvements in Federal Buildings

Risk Flags

Potential for scope creep if project requirements are not clearly defined.
Contractor's ability to meet performance deadlines.
Adequacy of site investigations prior to contract award.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $5.5 million to PARAMOUNT CONSTRUCTION GROUP, LLC. CORRECT FCA STEAM AND CONDENSATE

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 $5.5 million.

What is the period of performance?

Start: 2023-06-05. End: 2026-04-30.

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

A review of federal procurement data indicates that Paramount Construction Group, LLC has been awarded multiple contracts by the Department of Veterans Affairs. These awards span various construction and maintenance services, suggesting a history of engagement with the agency. Specific details regarding past performance, such as on-time delivery, quality of work, and adherence to budget on previous VA projects, would require a deeper dive into contract performance reports and payment histories. Understanding their past performance metrics is crucial for assessing their reliability and capability in executing this current $5.5 million contract effectively.

How does the awarded price compare to similar VA steam and condensate system upgrade projects?

Directly comparing the $5.5 million award for this specific project to similar VA steam and condensate system upgrades is challenging without access to a comprehensive database of comparable projects, including their scope, location, and specific system requirements. However, the firm-fixed-price nature of this contract suggests that the price was determined through competitive bidding, aiming for value. To conduct a thorough benchmark, one would need to identify projects of similar scale and complexity within the VA or other federal agencies, analyze their awarded values, and adjust for factors like inflation, geographic cost differences, and the specific technological requirements of the systems being upgraded. The number of bids received (5) suggests a competitive environment that likely drove the price towards a market-supported level.

What are the primary risks associated with this contract for the VA?

The primary risks for the VA in this contract include potential delays in project completion, which could disrupt facility operations or extend the period before benefits of the upgrades are realized. Although a firm-fixed-price contract shifts cost risk to the contractor, there's a residual risk of contractor performance issues, such as subpar quality of work or failure to meet specifications, which could necessitate corrective actions or future repairs. Another risk is the potential for unforeseen site conditions that might lead to change orders, even under a fixed-price contract, potentially increasing the overall cost or timeline. Ensuring robust oversight and clear communication channels will be key to mitigating these risks.

How effective are firm-fixed-price contracts in managing costs for infrastructure upgrades like this?

Firm-fixed-price (FFP) contracts are generally considered effective for managing costs in infrastructure upgrade projects when the scope of work is well-defined and the risks are understood. In this case, the VA has transferred the primary financial risk to Paramount Construction Group, LLC. The contractor is obligated to complete the project for the agreed-upon $5.5 million, incentivizing them to control their own costs and manage resources efficiently. This contract type minimizes the risk of cost overruns for the government, provided the scope is accurately defined upfront and change orders are managed judiciously. The effectiveness hinges on the initial clarity of the SOW and the contractor's ability to execute within the fixed price.

What is the historical spending trend for similar construction services at the Department of Veterans Affairs?

Historical spending trends for construction services at the Department of Veterans Affairs are substantial, reflecting the agency's vast portfolio of healthcare facilities and administrative buildings requiring ongoing maintenance, repair, and modernization. The VA consistently awards billions of dollars annually for construction, renovation, and facility support services. Spending in categories like 'Commercial and Institutional Building Construction' (NAICS 236220) fluctuates based on agency priorities, infrastructure needs, and available funding. Analyzing past VA spending on HVAC, plumbing, and building envelope upgrades would provide context for the $5.5 million award, indicating whether this represents a typical investment level or a significant deviation for such projects.

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: 5

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: $5,511,847

Exercised Options: $5,511,847

Current Obligation: $5,511,847

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