VA awards $1.43M contract for HVAC upgrades at Indiana facility, highlighting need for infrastructure modernization

Contract Overview

Contract Amount: $1,430,125 ($1.4M)

Contractor: Ameritech Contracting LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2024-11-05

End Date: 2026-10-27

Contract Duration: 721 days

Daily Burn Rate: $2.0K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: REPLACE SPS AIR HANDLER AND INSTALL HUMIDIFICATION SYSTEM 610-23-501

Place of Performance

Location: MARION, GRANT County, INDIANA, 46953

State: Indiana Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $1.4 million to AMERITECH CONTRACTING LLC for work described as: REPLACE SPS AIR HANDLER AND INSTALL HUMIDIFICATION SYSTEM 610-23-501 Key points: 1. Contract addresses critical infrastructure needs for veteran healthcare facilities. 2. Competition was full and open, suggesting a competitive bidding process. 3. Fixed-price contract type aims to control costs and manage financial risk. 4. Contract duration of 721 days indicates a significant scope of work. 5. The award to Ameritech Contracting LLC requires careful performance monitoring. 6. This spending supports essential building maintenance and operational efficiency.

Value Assessment

Rating: good

The contract value of $1.43 million for HVAC upgrades appears reasonable given the scope and duration. While specific benchmarks for this exact type of upgrade are not provided, similar projects for facility modernization in federal buildings often fall within this range. The firm fixed-price structure helps mitigate cost overruns, providing a degree of cost certainty for the government. The contract's focus on essential systems like air handling and humidification suggests a necessary investment in maintaining operational capacity and environmental quality for the facility.

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, indicating that multiple vendors were likely solicited and allowed to bid. The presence of two bidders suggests a moderate level of competition for this specific requirement. While more bidders could potentially drive prices lower, a competitive process was still employed, allowing the agency to select a vendor based on factors such as price and technical capability.

Taxpayer Impact: A competitive process, even with two bidders, helps ensure that taxpayer funds are used efficiently by encouraging vendors to offer their best pricing and terms.

Public Impact

Veterans receiving care at the Indiana facility will benefit from improved air quality and environmental controls. The contract ensures the continued operational readiness of a critical VA healthcare infrastructure. The project will likely involve skilled tradespeople in the Indiana region for installation and maintenance. Improved HVAC systems contribute to a more comfortable and safe environment for patients and staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for delays if specialized parts or skilled labor are not readily available.
Ensuring the new system integrates seamlessly with existing building infrastructure.
Monitoring contractor performance to ensure adherence to specifications and timelines.

Positive Signals

Firm fixed-price contract limits the risk of cost overruns for the government.
Awarded under full and open competition, suggesting a fair market price was likely achieved.
Focus on essential infrastructure upgrades supports long-term facility reliability.

Sector Analysis

The HVAC and plumbing services sector is a critical component of the broader construction and facilities maintenance industry. Federal spending in this area is consistent, driven by the need to maintain aging government infrastructure and ensure operational efficiency across various agencies. This contract for air handler and humidification system replacement fits within the typical scope of work for contractors specializing in commercial and institutional building systems, supporting the government's ongoing investment in its physical assets.

Small Business Impact

The contract was not set aside for small businesses, and the data does not indicate any subcontracting requirements for small businesses. This suggests that the primary award went to a larger entity or that the scope of work was not specifically tailored to encourage small business participation. Further analysis would be needed to determine if small businesses were involved in the supply chain or as potential subcontractors.

Oversight & Accountability

The contract is subject to standard federal procurement oversight. The firm fixed-price nature of the contract provides a degree of financial oversight by capping the government's liability. Performance will be monitored by the Department of Veterans Affairs, and the contract duration allows for ongoing assessment. Any significant issues or disputes would likely fall under the purview of the agency's contracting officer and potentially the relevant Inspector General if fraud or waste is suspected.

Related Government Programs

Federal Building HVAC Modernization
Department of Veterans Affairs Facilities Maintenance
Infrastructure Improvement Contracts
Plumbing, Heating, and Air-Conditioning Services

Risk Flags

Potential for cost overruns if scope is not clearly defined.
Risk of contractor performance issues impacting project timeline.
Dependency on specialized parts and skilled labor availability.
Need for robust oversight to ensure quality and compliance.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $1.4 million to AMERITECH CONTRACTING LLC. REPLACE SPS AIR HANDLER AND INSTALL HUMIDIFICATION SYSTEM 610-23-501

Who is the contractor on this award?

The obligated recipient is AMERITECH CONTRACTING 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 $1.4 million.

What is the period of performance?

Start: 2024-11-05. End: 2026-10-27.

What is the track record of Ameritech Contracting LLC with the Department of Veterans Affairs and other federal agencies?

A review of federal procurement data indicates that Ameritech Contracting LLC has received multiple federal contracts, primarily with the Department of Veterans Affairs. While specific details on past performance quality, such as on-time delivery or adherence to specifications, are not detailed in this summary, the agency's decision to award this significant contract suggests a level of confidence based on prior engagements. Further investigation into past performance evaluations and any reported disputes or contract terminations would provide a more comprehensive understanding of their track record. Analyzing their history across different agencies could also reveal patterns in their service delivery and client satisfaction.

How does the $1.43 million cost compare to similar HVAC upgrade projects at federal facilities?

Benchmarking the $1.43 million cost requires comparing it to similar HVAC upgrade projects, specifically focusing on the scope (air handler and humidification system replacement) and the facility type (VA healthcare). Without access to a detailed cost breakdown or a database of comparable federal projects, a precise comparison is challenging. However, for large-scale HVAC system replacements in institutional settings, costs can range significantly based on building size, complexity of the existing infrastructure, and specific equipment chosen. Given the firm fixed-price nature, the VA likely conducted its own cost analysis or relied on competitive bids to ensure the price was fair and reasonable. Projects of this magnitude often represent a substantial investment in maintaining critical infrastructure.

What are the primary risks associated with this type of infrastructure upgrade contract?

The primary risks associated with this infrastructure upgrade contract include potential delays due to unforeseen site conditions, availability of specialized parts, or labor shortages. There's also a risk of the new system not integrating seamlessly with existing building management systems, leading to operational inefficiencies. For the government, a key risk is ensuring the contractor meets all performance specifications and quality standards within the fixed-price budget. Contractor performance issues, such as poor workmanship or failure to meet deadlines, could necessitate corrective actions or even contract termination, leading to further delays and costs. Ensuring adequate project oversight is crucial to mitigating these risks.

How effective are firm fixed-price contracts in controlling costs for HVAC upgrades?

Firm fixed-price (FFP) contracts are generally considered effective in controlling costs for well-defined projects like HVAC upgrades, as they shift the majority of the cost risk to the contractor. The contractor is obligated to complete the work for the agreed-upon price, regardless of their actual costs. This incentivizes the contractor to manage their expenses efficiently and accurately estimate project costs upfront. For the government, FFP contracts provide budget certainty and protect against cost overruns, provided the scope of work is clearly defined and changes are managed through formal modification processes. However, if the scope is not well-defined initially, contractors may build in significant contingencies, potentially leading to a higher initial price than other contract types.

What is the historical spending trend for HVAC services by the Department of Veterans Affairs?

The Department of Veterans Affairs (VA) consistently spends significant amounts on HVAC services due to its extensive portfolio of healthcare facilities, many of which are aging and require ongoing maintenance, repair, and upgrades. Historical spending data would likely show a steady demand for these services, driven by the need to ensure patient safety, comfort, and regulatory compliance. Spending patterns can fluctuate based on major infrastructure initiatives, budget allocations, and the condition of specific facilities. Analyzing VA's historical spending on HVAC would reveal trends in contract values, types of services procured (e.g., maintenance vs. full replacement), and the distribution of awards among different contracting vehicles and vendors.

What are the implications of 'full and open competition after exclusion of sources' for this contract?

The designation 'full and open competition after exclusion of sources' indicates that while the competition was intended to be broad, there was a specific reason why certain sources were initially excluded, but then the requirement was opened up more widely. This could stem from a previous sole-source justification that was later revised, or perhaps an initial limited solicitation that was expanded. The key takeaway is that the final award was made under a process that allowed all responsible sources to submit an offer. This suggests that the agency aimed for a competitive outcome, but the specific history of source exclusion might warrant a closer look at the justification for that initial limitation to ensure full transparency and fairness in the procurement process.

Industry Classification

NAICS: Construction › Building Equipment Contractors › Plumbing, Heating, and Air-Conditioning 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: 36C25024B0065

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 151 BROAD ST, MIDDLETOWN, CT, 06457

Business Categories: Category Business, Partnership or Limited Liability Partnership, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $1,430,125

Exercised Options: $1,430,125

Current Obligation: $1,430,125

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline