VA awards $6.3M contract for terminal unit upgrades, highlighting construction sector activity

Contract Overview

Contract Amount: $6,357,548 ($6.4M)

Contractor: Calvary Contracting Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2022-01-20

End Date: 2026-01-30

Contract Duration: 1,471 days

Daily Burn Rate: $4.3K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: PROJECT # 539-21-111 - UPGRADE TERMINAL UNITS

Place of Performance

Location: CINCINNATI, HAMILTON County, OHIO, 45220

State: Ohio Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $6.4 million to CALVARY CONTRACTING INC for work described as: PROJECT # 539-21-111 - UPGRADE TERMINAL UNITS 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. Contract duration indicates a long-term project with sustained contractor involvement. 4. Fixed-price contract type shifts performance risk to the contractor. 5. Geographic focus on Ohio points to regional infrastructure development. 6. The project falls within the broader commercial and institutional building construction sector.

Value Assessment

Rating: good

The contract value of $6.36 million for terminal unit upgrades appears reasonable for a project of this scope and duration. Benchmarking against similar facility modernization projects within the Department of Veterans Affairs (VA) would provide a more precise assessment. The firm-fixed-price structure suggests the contractor bears the primary risk for cost overruns, which can be a positive indicator of value if the contractor's bid was competitive. Without specific per-unit cost data or detailed project specifications, a definitive value-for-money assessment is challenging, but the overall investment aligns with typical infrastructure improvement expenditures.

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 while the competition was broad, specific criteria or exclusions were applied. With 3 bidders identified, the competition level appears moderate. This suggests that the VA sought multiple proposals but may have had specific requirements that narrowed the field. A moderate number of bidders can still lead to price discovery and competitive pricing, though a higher number of bidders typically drives prices down further.

Taxpayer Impact: The moderate competition level suggests taxpayers likely received a fair price, though potentially not the absolute lowest possible if more bidders had been involved. The exclusion of certain sources warrants further examination to ensure it did not unduly limit competition.

Public Impact

Veterans receiving care at the VA facility will benefit from improved infrastructure and potentially enhanced comfort and functionality. The project delivers essential building construction services, focusing on upgrading terminal units within a VA facility. The geographic impact is concentrated in Ohio, supporting local economic activity and employment. The contract supports jobs within the construction industry, including skilled trades and project management personnel in Ohio.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if project scope expands beyond initial fixed-price agreement.
Risk of delays if unforeseen construction challenges arise.
Dependence on contractor's ability to manage subcontractors effectively.
Ensuring compliance with all VA facility standards and regulations.
Potential for disruption to ongoing facility operations during upgrade work.

Positive Signals

Firm-fixed-price contract shifts cost risk to the contractor.
Clear project scope for terminal unit upgrades.
Defined contract duration provides a timeline for completion.
Awarded by the Department of Veterans Affairs, indicating a focus on critical infrastructure.
Competition, even if moderate, suggests a degree of market vetting.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a vital part of the broader construction industry. This sector encompasses the building and renovation of non-residential structures, including government facilities, healthcare buildings, and commercial properties. The total federal spending on construction services is substantial, with significant portions allocated to infrastructure modernization and facility maintenance across various agencies. This specific contract for terminal unit upgrades is a typical example of the type of project undertaken to maintain and improve the operational efficiency and condition of government-owned buildings.

Small Business Impact

The data indicates that this contract was not specifically set aside for small businesses (ss: false, sb: false). Therefore, the primary contractor, Calvary Contracting Inc., is likely a larger entity. There is no explicit information regarding subcontracting plans for small businesses. Without a small business subcontracting requirement, the direct impact on the small business ecosystem for this specific contract may be limited, unless the prime contractor voluntarily engages small businesses for specialized services.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of Veterans Affairs contracting officers and project managers. They are responsible for monitoring performance, ensuring compliance with contract terms, and managing any modifications or disputes. The contract's firm-fixed-price nature simplifies some aspects of financial oversight by establishing a set cost. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply if any allegations of fraud, waste, or abuse arise during the contract's lifecycle.

Related Government Programs

VA Facility Modernization Projects
Federal Building Construction Contracts
Commercial Building Renovation
HVAC System Upgrades
Department of Veterans Affairs Capital Investments

Risk Flags

Potential for limited competition due to source exclusion.
Contract duration may indicate complexity or potential for delays.
Fixed-price contract risk if contractor underbids or faces unforeseen costs.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $6.4 million to CALVARY CONTRACTING INC. PROJECT # 539-21-111 - UPGRADE TERMINAL UNITS

Who is the contractor on this award?

The obligated recipient is CALVARY CONTRACTING 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 $6.4 million.

What is the period of performance?

Start: 2022-01-20. End: 2026-01-30.

What is the track record of Calvary Contracting Inc. with the Department of Veterans Affairs?

Calvary Contracting Inc. has been awarded this definitive contract by the Department of Veterans Affairs for terminal unit upgrades. To assess their track record, a deeper dive into their past performance with the VA and other federal agencies would be necessary. This would involve reviewing previous contracts, their values, the services provided, and any performance evaluations or past performance questionnaires (PPQs) associated with those awards. Understanding their history of on-time delivery, budget adherence, and quality of work on similar projects is crucial for evaluating their reliability and capability for this current contract. Without access to a comprehensive contract history database or specific performance reviews, a detailed assessment of their track record remains limited to the information provided for this single award.

How does the $6.36 million contract value compare to similar VA terminal unit upgrade projects?

Benchmarking the $6.36 million contract value against similar VA terminal unit upgrade projects requires access to a broader dataset of comparable contracts. Factors such as the size of the facility, the scope of work (e.g., number of units, complexity of systems), geographic location, and the year of award significantly influence project costs. If this project involves upgrading a large number of units in a major medical center, the cost might be considered standard. Conversely, if it's for a smaller facility or a limited number of units, it could be on the higher end. A comparative analysis would involve identifying contracts with similar project descriptions, award dates, and agency components to establish a relevant cost range and determine if this award represents good value for money.

What are the primary risks associated with this firm-fixed-price contract for terminal unit upgrades?

The primary risks associated with this firm-fixed-price contract, while generally favorable for the government by capping costs, lie in potential contractor performance issues. If Calvary Contracting Inc. underestimated the complexity or labor required for the terminal unit upgrades, they might face financial strain, potentially leading to quality compromises or delays. Unforeseen site conditions or material price escalations beyond what was reasonably anticipated could also impact the contractor's profitability and performance. Furthermore, the VA faces the risk of inadequate oversight if the contracting officer's representative (COR) or project managers are not diligent in monitoring progress and ensuring adherence to specifications. The exclusion of certain sources in the competition also introduces a potential risk if it inadvertently limited the pool of highly qualified bidders.

How effective is the 'Full and Open Competition After Exclusion of Sources' method for ensuring optimal value?

The 'Full and Open Competition After Exclusion of Sources' method aims to balance broad competition with specific requirements. It allows the agency to solicit offers from all responsible sources but may exclude certain sources based on pre-defined criteria (e.g., specific certifications, past performance limitations, or unique capabilities). This can be effective if the exclusions are justified and do not unduly restrict competition, ensuring that only capable contractors participate. However, if the exclusions are too narrow or poorly defined, it can limit the number of bidders, potentially reducing price competition and leading to a less optimal outcome for taxpayers. The effectiveness hinges on the agency's ability to clearly articulate and justify the reasons for exclusion while still fostering a competitive environment among the remaining eligible sources.

What is the historical spending pattern for terminal unit upgrades by the Department of Veterans Affairs?

Analyzing historical spending patterns for terminal unit upgrades by the Department of Veterans Affairs (VA) would reveal trends in investment in facility maintenance and modernization. This data could show whether spending has been consistent, increasing, or decreasing over time, and how it correlates with the VA's overall capital budget. Understanding these patterns helps in forecasting future needs and budgeting appropriately. It can also highlight periods of significant investment, perhaps following major infrastructure assessments or policy shifts. Without specific historical data, it's difficult to ascertain if the current $6.36 million award is part of a larger, ongoing modernization effort or an isolated project.

What are the potential workforce implications of this $6.36 million construction contract in Ohio?

This $6.36 million construction contract is likely to have positive workforce implications within the state of Ohio. Projects of this magnitude typically require a range of skilled labor, including electricians, plumbers, HVAC technicians, general laborers, and construction managers. Calvary Contracting Inc., as the prime contractor, will either utilize its own workforce or engage subcontractors, thereby creating employment opportunities. The duration of the contract (nearly four years) suggests sustained employment for those involved. Furthermore, the economic activity generated by the project can have ripple effects, supporting local suppliers of materials and equipment, and indirectly benefiting the regional economy through wages and spending.

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: SEALED BID

Solicitation ID: 36C25021B0125

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 4125 GIBSON DR, TIPP CITY, OH, 45371

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Minority Owned Business, Other Minority Owned Business, Self-Certified Small Disadvantaged Business, Service Disabled Veteran Owned Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $6,357,548

Exercised Options: $6,357,548

Current Obligation: $6,357,548

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline