VA awards $18.6M contract for VAV box replacement at WPB VAMC, highlighting construction needs

Contract Overview

Contract Amount: $18,581,187 ($18.6M)

Contractor: Utility Systems Solutions, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2022-03-28

End Date: 2027-07-01

Contract Duration: 1,921 days

Daily Burn Rate: $9.7K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: PROJECT NO. 548-16-612, REPLACE VARIABLE AIR VALVE (VAV) BOXES AT WPB VAMC.

Place of Performance

Location: DALLAS, DALLAS County, TEXAS, 75244

State: Texas Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $18.6 million to UTILITY SYSTEMS SOLUTIONS, INC. for work described as: PROJECT NO. 548-16-612, REPLACE VARIABLE AIR VALVE (VAV) BOXES AT WPB VAMC. Key points: 1. Contract addresses critical infrastructure maintenance for improved facility performance. 2. Competition was full and open after exclusion of sources, suggesting a broad search for qualified bidders. 3. Fixed-price contract structure shifts risk to the contractor, potentially stabilizing costs. 4. Project duration of over 5 years indicates a significant scope of work. 5. The awardee, Utility Systems Solutions, Inc., is tasked with a specific, essential facility upgrade. 6. Geographic focus on Texas (WPB VAMC) points to regional infrastructure investment.

Value Assessment

Rating: good

The contract value of $18.6 million for replacing Variable Air Valve (VAV) boxes at the WPB VAMC appears reasonable given the project's scope and multi-year duration. Benchmarking against similar HVAC system upgrade contracts within the Department of Veterans Affairs or other federal agencies would provide a more precise value-for-money assessment. The firm-fixed-price nature of the contract suggests that the pricing was determined through competitive bidding, aiming for cost certainty. However, without detailed cost breakdowns or comparisons to industry standards for VAV box replacement per unit, a definitive assessment of cost efficiency is challenging.

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.' While this indicates an initial broad solicitation, the 'exclusion of sources' clause suggests that certain potential bidders may have been disqualified or excluded based on specific criteria prior to the final competition. The number of bidders (6) is moderate, providing some level of competition. A higher number of bidders typically leads to more competitive pricing, but the quality and capability of the bidders are also crucial factors.

Taxpayer Impact: The competitive process, even with exclusions, aims to secure the best value for taxpayers by encouraging multiple firms to offer their best pricing and technical solutions. The moderate number of bidders suggests a balance between ensuring sufficient competition and finding specialized expertise.

Public Impact

Veterans receiving care at the WPB VAMC will benefit from improved air quality and HVAC system reliability. The project ensures the continued operational efficiency of a key healthcare facility. The contract supports the construction sector workforce in Texas through employment opportunities. Improved building systems contribute to a safer and more comfortable environment for patients and staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen issues arise during the multi-year project, despite fixed-price structure.
Dependence on a single contractor for a critical infrastructure component over an extended period.
Risk of schedule delays impacting facility operations if contractor performance falters.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Clear scope of work for VAV box replacement targets a specific infrastructure need.
Award to a single entity streamlines management and accountability for this project.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, specifically focusing on mechanical systems upgrades. The market for HVAC services and building maintenance is substantial, with federal agencies being significant clients. This project represents a targeted investment in maintaining critical healthcare infrastructure, aligning with broader government efforts to modernize federal facilities. Comparable spending benchmarks would involve analyzing other large-scale HVAC renovation projects within federal healthcare systems.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). With 6 bidders in the competition, there is a possibility for subcontracting opportunities for small businesses within the construction and mechanical services trades. However, without specific subcontracting plans mandated in the contract, the direct impact on the small business ecosystem is uncertain and depends on the prime contractor's practices.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of Veterans Affairs' contracting officers and facility management teams. Accountability measures are embedded in the firm-fixed-price contract terms, with performance expectations tied to payment. Transparency is facilitated through federal contract databases. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Federal Building and Facilities Maintenance
Healthcare Facility Construction
HVAC System Upgrades
Department of Veterans Affairs Capital Investments

Risk Flags

Potential for cost increases due to extended contract duration.
Risk of contractor performance issues over a multi-year project.
Impact of 'exclusion of sources' on competitive pricing.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $18.6 million to UTILITY SYSTEMS SOLUTIONS, INC.. PROJECT NO. 548-16-612, REPLACE VARIABLE AIR VALVE (VAV) BOXES AT WPB VAMC.

Who is the contractor on this award?

The obligated recipient is UTILITY SYSTEMS SOLUTIONS, 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 $18.6 million.

What is the period of performance?

Start: 2022-03-28. End: 2027-07-01.

What is the historical spending pattern of the Department of Veterans Affairs on VAV box replacements or similar HVAC upgrades across its facilities?

Analyzing the Department of Veterans Affairs' historical spending on VAV box replacements and similar HVAC upgrades requires examining contract databases over several fiscal years. While specific data for 'VAV box replacements' might be granular, broader categories like 'HVAC maintenance,' 'building systems upgrades,' and 'facility renovation' can provide context. Federal procurement data often shows significant and consistent investment in maintaining and modernizing healthcare infrastructure due to the critical nature of these facilities. Spending can fluctuate based on infrastructure assessment needs, budget allocations, and the age of existing facilities. For instance, older VAMC facilities may require more frequent and extensive upgrades. Benchmarking this $18.6 million award against the VA's total facilities maintenance budget or its average spending on similar projects over the past 5-10 years would reveal if this represents a typical investment or a particularly large-scale initiative.

How does the awarded price compare to industry benchmarks for VAV box replacement per unit or per square foot of facility space?

Determining the precise value-for-money for this $18.6 million contract necessitates comparing its cost against industry benchmarks for Variable Air Valve (VAV) box replacement. VAV boxes are critical components of HVAC systems, and their replacement cost can vary significantly based on type, size, manufacturer, and complexity of installation. Industry estimates for replacing a single VAV box, including labor and materials, can range from several hundred to a few thousand dollars. For a large facility like the WPB VAMC, the total number of VAV boxes could be in the hundreds or thousands. If we assume an average replacement cost of $1,000-$2,000 per VAV box (a rough estimate), the total number of boxes would be between 9,300 and 18,600. This contract's total value of $18.6 million suggests a higher average cost per box, potentially indicating a more complex scope, inclusion of related system upgrades, or higher labor costs in the specific geographic region. A detailed cost analysis would require knowing the exact number and type of VAV boxes replaced and the specific scope of work beyond just the boxes themselves.

What is the track record of Utility Systems Solutions, Inc. with federal contracts, particularly with the Department of Veterans Affairs?

Assessing the track record of Utility Systems Solutions, Inc. involves reviewing their past performance on federal contracts, especially those awarded by the Department of Veterans Affairs (VA). Publicly available federal procurement data can reveal the number, value, and type of contracts the company has held. Key indicators include on-time delivery, adherence to budget, quality of work, and any past performance issues or disputes. For a significant contract like this $18.6 million VAV box replacement project, the VA would have likely conducted a thorough review of the contractor's past performance. Examining their experience with similar construction, mechanical systems, or healthcare facility projects is crucial. A history of successful project completion, particularly with complex infrastructure work for the VA, would indicate a lower risk for this current contract. Conversely, a record of significant performance issues or contract terminations might raise concerns about the contractor's capability to execute this project successfully.

What are the potential risks associated with a 5-year contract duration for HVAC system upgrades?

A contract duration of approximately 5 years (1921 days) for HVAC system upgrades, such as VAV box replacement, presents several potential risks. Firstly, the extended timeline increases the possibility of unforeseen site conditions or material price fluctuations, even with a firm-fixed-price contract, potentially leading to change orders or disputes if not managed meticulously. Secondly, technological advancements in HVAC systems could occur during the contract period, potentially making the installed components less efficient or outdated by the end of the term. Thirdly, maintaining consistent contractor performance and quality over such a long duration can be challenging; contractor staff turnover or shifts in company priorities could impact project execution. Finally, the long duration ties up significant capital and requires sustained oversight from the agency to ensure the project remains on track and meets its objectives without scope creep or significant delays.

How does the 'Full and Open Competition After Exclusion of Sources' procurement method impact price discovery and overall value?

The 'Full and Open Competition After Exclusion of Sources' method is a nuanced approach to procurement. It begins with the intention of soliciting bids from all responsible sources (full and open competition). However, the 'exclusion of sources' clause indicates that certain potential offerors were intentionally excluded from the competition based on specific, documented criteria, such as pre-qualification requirements, past performance issues, or specific technical capabilities not met. This can impact price discovery by potentially limiting the number of competitive bids received compared to a purely open competition. If the exclusions were too broad or not well-justified, it could reduce the competitive pressure on pricing. Conversely, if the exclusions were narrowly tailored to ensure only highly qualified and capable contractors participated, it might lead to better technical solutions and potentially more stable pricing, even if the number of bidders is reduced. The overall value depends on whether the exclusions effectively filtered out less capable bidders, thereby ensuring a higher quality outcome, or if they unnecessarily constrained competition, potentially leading to higher costs than might have been achieved otherwise.

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: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 36C24822R0002

Offers Received: 6

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 14330 MIDWAY ROAD SUITE 200, DALLAS, TX, 75244

Business Categories: Category Business, Corporate Entity Not Tax Exempt, 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: $18,581,187

Exercised Options: $18,581,187

Current Obligation: $18,581,187

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline