VA awards $7.4M contract for HVAC upgrades at Milwaukee medical center, highlighting long-term infrastructure investment

Contract Overview

Contract Amount: $7,418,054 ($7.4M)

Contractor: Master Design Build LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2019-06-25

End Date: 2029-02-16

Contract Duration: 3,524 days

Daily Burn Rate: $2.1K/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: PROJECT 695-16-109 UPGRADE V10, V11, V30 AHUS (MER2) AT THE CLEMENT J. ZABLOCKI VA MEDICAL CENTER IN MILWAUKEE, WISCONSIN

Place of Performance

Location: MILWAUKEE, MILWAUKEE County, WISCONSIN, 53295

State: Wisconsin Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $7.4 million to MASTER DESIGN BUILD LLC for work described as: PROJECT 695-16-109 UPGRADE V10, V11, V30 AHUS (MER2) AT THE CLEMENT J. ZABLOCKI VA MEDICAL CENTER IN MILWAUKEE, WISCONSIN Key points: 1. Contract focuses on critical infrastructure modernization for a key VA facility. 2. The fixed-price contract structure aims to control costs over its duration. 3. Competition was open, suggesting a competitive bidding process for the services. 4. The project duration extends over several years, indicating a phased approach to upgrades. 5. The awardee, Master Design Build LLC, will be responsible for significant facility improvements. 6. This spending aligns with broader federal efforts to maintain and upgrade aging federal buildings.

Value Assessment

Rating: good

The contract value of $7.4 million for HVAC upgrades at a VA medical center appears reasonable given the scope and duration. While direct comparisons are difficult without specific project details, similar large-scale facility modernization projects for federal healthcare institutions often run into millions of dollars. The firm fixed-price nature of the contract provides cost certainty for the government, assuming the scope is well-defined. Benchmarking the per-unit cost would require detailed breakdowns of the HVAC systems and labor involved, which are not provided.

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.' This indicates that while the competition was generally open, there might have been specific reasons for excluding certain sources, possibly related to specialized capabilities or prior performance. The presence of multiple bidders (4 indicated) suggests a healthy level of competition, which typically drives better pricing and value for the government.

Taxpayer Impact: A competitive bidding process helps ensure that taxpayer dollars are used efficiently by encouraging contractors to offer their best prices and terms. This approach minimizes the risk of overpayment and promotes a fair market for government contracting.

Public Impact

Veterans receiving care at the Clement J. Zablocki VA Medical Center will benefit from improved environmental controls and system reliability. The project ensures the continued operational efficiency and safety of a critical healthcare facility. The upgrades will likely enhance the comfort and health of patients, staff, and visitors. The contract supports skilled labor in the HVAC and construction sectors within Wisconsin. Modernized infrastructure contributes to the long-term sustainability and service capacity of the VA healthcare system.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if initial requirements are not precisely defined, impacting final costs.
Long contract duration increases exposure to potential material cost fluctuations or labor availability issues.
Dependence on a single awardee for a multi-year project requires robust oversight to ensure performance.
Ensuring compliance with all VA facility standards and regulations throughout the upgrade process.

Positive Signals

Firm fixed-price contract provides cost certainty and limits the government's financial risk.
Open competition suggests a robust selection process, likely resulting in a qualified contractor.
The project addresses essential infrastructure needs, ensuring the long-term viability of a key medical center.
Long-term contract allows for phased implementation, potentially minimizing disruption to medical center operations.

Sector Analysis

The HVAC and building systems sector is a significant component of federal infrastructure spending. This contract falls within the broader category of construction and facilities maintenance, specifically focusing on mechanical systems. Federal agencies, particularly those operating large facilities like medical centers, consistently invest in maintaining and upgrading their infrastructure to ensure operational continuity and energy efficiency. Spending in this area is often driven by the age of existing facilities and the need to comply with modern building codes and environmental standards.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). While the primary awardee is Master Design Build LLC, the contract type (full and open competition) does not preclude subcontracting opportunities. It is possible that the prime contractor may engage small businesses for specific portions of the work, but there is no explicit requirement or set-aside noted in the provided data. Further analysis would be needed to determine the extent of small business participation through subcontracting.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Veterans Affairs' contracting officers and project managers. Given the multi-year duration and significant value, regular progress reviews, site inspections, and performance evaluations are expected. Accountability measures are typically embedded in the contract terms, including payment schedules tied to milestones and potential penalties for non-performance. Transparency is generally maintained through contract award databases and reporting requirements, though detailed project-specific oversight documentation may not be publicly accessible.

Related Government Programs

VA Medical Facility Modernization Projects
Federal Building Infrastructure Upgrades
HVAC System Replacement Contracts
Construction and Engineering Services for Government Facilities

Risk Flags

Long contract duration may increase exposure to market volatility.
Potential for scope definition issues in complex facility upgrades.
Ensuring sustained performance and quality over an extended period.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $7.4 million to MASTER DESIGN BUILD LLC. PROJECT 695-16-109 UPGRADE V10, V11, V30 AHUS (MER2) AT THE CLEMENT J. ZABLOCKI VA MEDICAL CENTER IN MILWAUKEE, WISCONSIN

Who is the contractor on this award?

The obligated recipient is MASTER DESIGN BUILD 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 $7.4 million.

What is the period of performance?

Start: 2019-06-25. End: 2029-02-16.

What is the track record of Master Design Build LLC in performing similar large-scale HVAC upgrade contracts for federal agencies?

Assessing the track record of Master Design Build LLC requires examining their past performance on federal contracts, particularly those involving HVAC systems in healthcare or large institutional settings. Information from sources like the Federal Procurement Data System (FPDS) or the Contractor Performance Assessment Reporting System (CPARS) would be crucial. Key indicators to look for include successful completion of similar projects on time and within budget, positive performance reviews, and any history of contract disputes or terminations. Without access to this specific performance data, it's difficult to definitively assess their suitability and past success in executing projects of this magnitude and complexity.

How does the awarded price compare to industry benchmarks for similar HVAC upgrade projects in Wisconsin?

Benchmarking the $7.4 million contract value against industry standards for HVAC upgrades requires detailed project specifications, including the square footage of the facility, the type and scope of HVAC systems being replaced or upgraded (e.g., chillers, boilers, air handlers, ductwork), and the complexity of the installation. Publicly available data often lacks this granularity. However, general cost estimates for commercial HVAC replacements can range significantly, from hundreds to thousands of dollars per ton of cooling capacity or per square foot, depending on the system. Given the scale of a VA Medical Center, this project likely involves substantial equipment and labor, making the $7.4 million figure plausible, but a precise comparison would necessitate a detailed cost breakdown and analysis of comparable projects in the Milwaukee area.

What are the primary risks associated with a multi-year firm fixed-price contract for facility upgrades?

A primary risk with a multi-year firm fixed-price contract is the potential for the contractor to face unforeseen cost increases (e.g., material prices, labor shortages) that erode their profit margin, potentially leading to quality compromises or delays if not managed proactively. Conversely, if the initial scope is poorly defined, the government risks paying more than necessary if the contractor identifies opportunities to increase the scope or if the fixed price was based on inaccurate assumptions. For the government, the risk lies in ensuring the contractor maintains performance and quality over the extended period and that the final product meets all requirements. Robust oversight and clear contract milestones are essential to mitigate these risks.

What is the expected impact of these HVAC upgrades on the operational effectiveness and energy efficiency of the Zablocki VA Medical Center?

The HVAC upgrades are expected to significantly enhance the operational effectiveness and energy efficiency of the Clement J. Zablocki VA Medical Center. Modern HVAC systems are designed for improved reliability, reducing the likelihood of breakdowns that could disrupt critical medical services. Enhanced climate control ensures a stable and comfortable environment for patients and staff, which is crucial for healthcare delivery. Furthermore, newer systems typically incorporate advanced energy-saving technologies, leading to reduced electricity and fuel consumption. This not only lowers operational costs for the VA but also contributes to the government's sustainability goals. The project's success hinges on the proper installation and commissioning of the new systems.

How does this contract align with the Department of Veterans Affairs' overall capital investment strategy for its medical facilities?

This contract aligns with the Department of Veterans Affairs' ongoing strategy to modernize and maintain its vast network of medical facilities. The VA faces the challenge of managing a portfolio of aging infrastructure, and significant capital investments are required to ensure these facilities can continue to provide high-quality care. Projects like the HVAC upgrades at Zablocki VAMC are essential components of this strategy, addressing critical needs for system reliability, patient comfort, and energy efficiency. Such investments are crucial for the long-term sustainability of the VA healthcare system and its ability to meet the evolving needs of veterans.

Industry Classification

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

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: SEALED BID

Solicitation ID: 36C25219B0050

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 5509 N CUMBERLAND AVE STE 501, CHICAGO, IL, 60656

Business Categories: 8(a) Program Participant, Category Business, Hispanic American Owned Business, Limited Liability Corporation, Minority Owned Business, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $7,418,054

Exercised Options: $7,418,054

Current Obligation: $7,418,054

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline