VA Awards $6.09M Contract for Emergency Power to Chiller Plant, Awarded via Full and Open Competition

Contract Overview

Contract Amount: $6,085,291 ($6.1M)

Contractor: Cavu-Roncelli Construction JV-10 LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2023-08-15

End Date: 2026-02-27

Contract Duration: 927 days

Daily Burn Rate: $6.6K/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: ADD EMERGENCY POWER TO CENTRAL CHILLER PLANT 506-21-110

Place of Performance

Location: ANN ARBOR, WASHTENAW County, MICHIGAN, 48105

State: Michigan Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $6.1 million to CAVU-RONCELLI CONSTRUCTION JV-10 LLC for work described as: ADD EMERGENCY POWER TO CENTRAL CHILLER PLANT 506-21-110 Key points: 1. The contract aims to enhance critical infrastructure resilience for the VA's Central Chiller Plant. 2. Awarded through full and open competition, suggesting a competitive bidding process. 3. The project involves electrical contracting services, a sector with established market rates. 4. Potential risks include project delays or cost overruns common in construction projects.

Value Assessment

Rating: good

The contract value of $6.09M for emergency power installation appears reasonable for a project of this scope, especially considering it involves a critical facility like a chiller plant. Benchmarking against similar government or private sector projects for emergency power systems in large facilities would provide a more precise assessment.

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 multiple bidders were allowed to compete, but specific sources were excluded. This method generally promotes price discovery and competitive pricing, though the exclusion of sources warrants further investigation.

Taxpayer Impact: The use of full and open competition is intended to secure the best value for taxpayers by fostering a competitive environment among qualified contractors.

Public Impact

Ensures continuous operation of essential cooling systems, vital for patient care and facility operations. Enhances the reliability of a critical infrastructure component, reducing risks during power outages. Supports local economic activity through construction and electrical contracting services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep in construction projects.
Dependency on specialized electrical contractors.
Risk of unforeseen site conditions impacting schedule and cost.

Positive Signals

Awarded via full and open competition.
Firm Fixed Price contract type limits cost escalation.
Project addresses a critical infrastructure need.

Sector Analysis

The project falls under the Electrical Contractors and Other Wiring Installation Contractors sector (NAICS 238210). Spending in this sector is significant across government agencies for facility maintenance and upgrades. Benchmarks for similar emergency power installations vary widely based on facility size and complexity.

Small Business Impact

While the award was made to a joint venture, it's unclear if small businesses were involved as subcontractors. Further analysis would be needed to determine the extent of small business participation in this contract.

Oversight & Accountability

The Department of Veterans Affairs is responsible for overseeing this contract. Standard government oversight mechanisms, including contract performance monitoring and financial reviews, should be in place to ensure successful execution and accountability.

Related Government Programs

Electrical Contractors and Other Wiring Installation Contractors
Department of Veterans Affairs Contracting
Department of Veterans Affairs Programs

Risk Flags

Potential for delays due to construction complexities.
Dependency on specialized electrical contractors.
Risk of unforeseen site conditions.
Need to verify small business participation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $6.1 million to CAVU-RONCELLI CONSTRUCTION JV-10 LLC. ADD EMERGENCY POWER TO CENTRAL CHILLER PLANT 506-21-110

Who is the contractor on this award?

The obligated recipient is CAVU-RONCELLI CONSTRUCTION JV-10 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 $6.1 million.

What is the period of performance?

Start: 2023-08-15. End: 2026-02-27.

What specific criteria were used to exclude certain sources in the 'full and open competition after exclusion of sources' process, and how did this impact the final price?

The exclusion of sources typically occurs when specific technical requirements, past performance, or security clearances are necessary, limiting the pool of eligible bidders. While this can sometimes lead to higher prices due to reduced competition, it also ensures that only qualified contractors capable of meeting stringent requirements are considered, potentially mitigating risks associated with less experienced bidders and ensuring project success.

What are the key performance indicators (KPIs) for this emergency power system installation, and how will their successful achievement be measured to ensure effectiveness?

Key performance indicators likely include the system's ability to automatically activate within a specified timeframe during a power outage, maintain consistent power output to critical loads, and meet all relevant electrical codes and safety standards. Effectiveness will be measured through rigorous testing, load simulations, and ongoing performance monitoring post-installation to confirm reliability and compliance.

Given the firm fixed price contract, what mechanisms are in place to manage potential cost overruns if unforeseen issues arise during the installation of the emergency power system?

A firm fixed price contract generally places the risk of cost overruns on the contractor. However, contract clauses may allow for equitable adjustments in specific, unforeseen circumstances (e.g., differing site conditions). The VA's contracting officer would review any such claims, and the contract likely includes provisions for change orders if the scope of work is legitimately altered due to factors beyond the contractor's control.

Industry Classification

NAICS: Construction › Building Equipment Contractors › Electrical Contractors and Other Wiring Installation Contractors

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: 36C25023B0003

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 40950 WOODWARD AVE., BLOOMFIELD HILLS, MI, 48304

Business Categories: Category Business, Limited Liability Corporation, Partnership or Limited Liability Partnership, 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: $6,085,291

Exercised Options: $6,085,291

Current Obligation: $6,085,291

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline