VA awards $2.46M contract for HVAC upgrades at Birmingham facility, highlighting construction sector activity

Contract Overview

Contract Amount: $2,460,184 ($2.5M)

Contractor: Birmingham Industrial Construction, LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2024-01-11

End Date: 2026-04-18

Contract Duration: 828 days

Daily Burn Rate: $3.0K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: REPLACE HVAC BLDG 143 DIETETICS

Place of Performance

Location: TUSCALOOSA, TUSCALOOSA County, ALABAMA, 35404

State: Alabama Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $2.5 million to BIRMINGHAM INDUSTRIAL CONSTRUCTION, LLC for work described as: REPLACE HVAC BLDG 143 DIETETICS Key points: 1. Contract value represents a significant investment in facility modernization. 2. Competition dynamics suggest a potentially competitive bidding environment for this type of work. 3. Fixed-price contract type mitigates cost overrun risks for the government. 4. Contract duration of over two years allows for phased implementation and testing. 5. Geographic focus on Alabama indicates regional economic impact. 6. The project falls within the broader category of commercial and institutional building construction.

Value Assessment

Rating: good

The contract value of $2.46 million for HVAC upgrades appears reasonable for a project of this scope and duration. Benchmarking against similar VA facility modernization projects would provide a more precise value-for-money assessment. The firm fixed-price structure is generally favorable for controlling costs on construction projects. The contract's duration of over two years allows for thorough execution and potential for phased implementation, which can be cost-effective.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicating that while the competition was intended to be broad, certain sources were excluded. This suggests a potentially less competitive environment than true full and open competition. The presence of 4 bidders indicates some level of market interest, but the exclusion of sources warrants further investigation into the rationale and its impact on pricing.

Taxpayer Impact: The exclusion of sources, even with multiple bidders, may have limited the downward pressure on pricing, potentially resulting in a higher cost to taxpayers than if all qualified sources had been allowed to compete.

Public Impact

The primary beneficiaries are the patients and staff at the Birmingham VA facility, who will experience improved environmental conditions. The contract delivers essential upgrades to the building's heating, ventilation, and air conditioning systems, ensuring operational efficiency and comfort. The geographic impact is concentrated in Birmingham, Alabama, supporting local economic activity and employment within the construction sector. The project will likely involve a workforce of skilled tradespeople, including electricians, plumbers, and HVAC technicians, contributing to regional employment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for limited competition due to exclusion of sources.
Risk of scope creep if project requirements are not clearly defined.
Dependence on contractor's ability to manage complex HVAC systems installation.

Positive Signals

Firm fixed-price contract limits cost uncertainty.
Longer contract duration allows for thorough project execution.
Award to a single contractor streamlines management and accountability.

Sector Analysis

The contract falls within the Commercial and Institutional Building Construction sector (NAICS 236220), a significant segment of the U.S. economy. This sector encompasses a wide range of construction projects, including healthcare facilities, educational institutions, and government buildings. Spending in this sector is often driven by infrastructure needs, modernization efforts, and new development. Comparable spending benchmarks would typically be assessed based on project size, complexity, and geographic location.

Small Business Impact

The contract was not specifically set aside for small businesses, and the awardee, BIRMINGHAM INDUSTRIAL CONSTRUCTION, LLC, is not explicitly identified as a small business in the provided data. There is no information regarding subcontracting plans for small businesses. This suggests that opportunities for small business participation may be limited unless they are direct suppliers or subcontractors to the prime contractor.

Oversight & Accountability

Oversight for this contract will primarily reside with 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 specified HVAC upgrades within the agreed-upon budget and timeline. Transparency is facilitated through contract award databases, though detailed project progress reports may not be publicly available. 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
Commercial Building Construction Services

Risk Flags

Limited competition due to source exclusion.
Potential for cost increases if scope changes.
Dependence on contractor's specialized expertise.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $2.5 million to BIRMINGHAM INDUSTRIAL CONSTRUCTION, LLC. REPLACE HVAC BLDG 143 DIETETICS

Who is the contractor on this award?

The obligated recipient is BIRMINGHAM INDUSTRIAL CONSTRUCTION, 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 $2.5 million.

What is the period of performance?

Start: 2024-01-11. End: 2026-04-18.

What is the track record of BIRMINGHAM INDUSTRIAL CONSTRUCTION, LLC in performing similar federal construction contracts?

A review of federal contract databases would be necessary to fully assess BIRMINGHAM INDUSTRIAL CONSTRUCTION, LLC's track record. Key metrics to examine would include past performance ratings on similar projects, any history of contract disputes or terminations, and the value and complexity of previously awarded government contracts. Understanding their experience with VA facilities specifically, and HVAC systems in particular, would be crucial for evaluating their capability to successfully execute this current contract. Without this specific data, it is difficult to definitively assess their past performance.

How does the awarded price compare to market rates for similar HVAC upgrade projects in the Birmingham, Alabama region?

To benchmark the value, one would compare the awarded price of $2.46 million against the average cost of similar HVAC upgrade projects in the Birmingham area. This would involve analyzing data from construction cost estimators, industry reports, and potentially other publicly available federal or state contracts for comparable work. Factors such as the size of the facility, the scope of the HVAC system replacement (e.g., chillers, boilers, ductwork, controls), and the specific technologies employed would need to be considered for an accurate comparison. The firm fixed-price nature of the contract suggests the contractor has factored in these market conditions.

What are the primary risks associated with this contract, and what mitigation strategies are in place?

Primary risks include potential delays due to unforeseen site conditions, supply chain disruptions for specialized HVAC components, and labor shortages. Given the firm fixed-price structure, cost overruns are primarily borne by the contractor, but delays could still impact the VA. Mitigation strategies likely involve detailed project planning, robust scheduling, contingency planning for material procurement, and close monitoring of contractor performance by the VA. The contract's duration allows for some buffer, but proactive risk management by both parties is essential.

How effective are the 'exclusion of sources' provisions in ensuring fair competition while meeting specific project needs?

The 'exclusion of sources' provision, used in conjunction with 'full and open competition,' aims to balance broad market access with the need to potentially exclude sources that may not meet specific, justifiable requirements. While it allows for a degree of tailored competition, it inherently limits the pool of potential bidders compared to unrestricted full and open competition. The effectiveness hinges on the validity and necessity of the exclusions. If exclusions are overly broad or not well-justified, they can reduce competition, potentially leading to higher prices and fewer innovative solutions for taxpayers. Conversely, if exclusions are narrowly tailored to essential technical capabilities, they can ensure the most qualified contractors are considered.

What is the historical spending pattern for HVAC upgrades at VA facilities in Alabama over the past five years?

Analyzing historical spending for HVAC upgrades at VA facilities in Alabama over the past five years would reveal trends in contract values, types of competition utilized (full and open, sole source, etc.), and the average duration and cost of such projects. This data could help determine if the current $2.46 million award is consistent with past investments, if spending has increased or decreased, and whether there's a pattern of competitive bidding or reliance on limited sources. Such analysis provides context for the current contract's value and procurement strategy.

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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 105 CORPORATE WOODS CIR, ALABASTER, AL, 35007

Business Categories: Category Business, Corporate Entity Not Tax Exempt, DoT Certified Disadvantaged Business Enterprise, Hispanic American Owned Business, Limited Liability Corporation, Minority Owned Business, Self-Certified Small Disadvantaged Business, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $2,460,184

Exercised Options: $2,460,184

Current Obligation: $2,460,184

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C24718D0133

IDV Type: IDC

Timeline