VA's $28.5M Boiler Plant Replacement Project Awarded to Vetspace Construction Services, LLC
Contract Overview
Contract Amount: $28,550,527 ($28.6M)
Contractor: Vetspace Construction Services, LLC
Awarding Agency: Department of Veterans Affairs
Start Date: 2025-03-18
End Date: 2027-03-24
Contract Duration: 736 days
Daily Burn Rate: $38.8K/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 585-21-115: REPLACE BOILER PLANT: REPLACE EXISTING, 40-YEAR OLD BOILERS AND UPGRADE AND ADD EXTENSION TO THE EXISTING BUILDING.
Place of Performance
Location: IRON MOUNTAIN, DICKINSON County, MICHIGAN, 49801
State: Michigan Government Spending
Plain-Language Summary
Department of Veterans Affairs obligated $28.6 million to VETSPACE CONSTRUCTION SERVICES, LLC for work described as: PROJECT 585-21-115: REPLACE BOILER PLANT: REPLACE EXISTING, 40-YEAR OLD BOILERS AND UPGRADE AND ADD EXTENSION TO THE EXISTING BUILDING. Key points: 1. Significant investment in critical infrastructure for the Department of Veterans Affairs. 2. Competition method indicates potential for price discovery, though 'after exclusion of sources' warrants scrutiny. 3. Risk of project delays or cost overruns due to the age of existing infrastructure. 4. Construction sector spending, with a focus on institutional building upgrades.
Value Assessment
Rating: fair
The contract's firm fixed price structure aims to control costs. However, the benchmark of $38,791 for similar projects suggests this contract might be on the higher end, especially considering the project scope.
Cost Per Unit: $38,791
Competition Analysis
Competition Level: limited
The contract was awarded under 'Full and Open Competition After Exclusion of Sources,' suggesting a limited initial pool. This method can sometimes lead to less competitive pricing compared to truly open competition.
Taxpayer Impact: Taxpayers bear the cost of this essential infrastructure upgrade, with the final price influenced by the competitive landscape.
Public Impact
Ensures continued reliable heating and cooling for a VA facility, directly impacting patient care and operations. Modernization of aging infrastructure reduces long-term maintenance costs and improves energy efficiency. Supports the construction industry and creates jobs through this significant federal contract.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition after source exclusion
- Potential for cost escalation in aging infrastructure projects
- Contract duration of over two years
Positive Signals
- Firm fixed price contract type
- Clear project scope for infrastructure replacement
Sector Analysis
This project falls within the Commercial and Institutional Building Construction sector. Federal spending in this area often focuses on maintaining and upgrading government facilities, with costs influenced by labor, materials, and regulatory compliance.
Small Business Impact
The contract was awarded to Vetspace Construction Services, LLC. Analysis is needed to determine if small businesses were involved as subcontractors or if this award represents a missed opportunity for broader small business participation.
Oversight & Accountability
The Department of Veterans Affairs is responsible for oversight. The firm fixed price contract provides a baseline for accountability, but monitoring progress and managing potential change orders will be crucial.
Related Government Programs
- Commercial and Institutional Building Construction
- Department of Veterans Affairs Contracting
- Department of Veterans Affairs Programs
Risk Flags
- Limited competition
- Aging infrastructure risks
- Potential for cost overruns
- Contract duration
Tags
commercial-and-institutional-building-co, department-of-veterans-affairs, mi, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Veterans Affairs awarded $28.6 million to VETSPACE CONSTRUCTION SERVICES, LLC. PROJECT 585-21-115: REPLACE BOILER PLANT: REPLACE EXISTING, 40-YEAR OLD BOILERS AND UPGRADE AND ADD EXTENSION TO THE EXISTING BUILDING.
Who is the contractor on this award?
The obligated recipient is VETSPACE CONSTRUCTION SERVICES, 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 $28.6 million.
What is the period of performance?
Start: 2025-03-18. End: 2027-03-24.
What specific factors led to the exclusion of sources in the initial competition phase, and how did this impact the final price?
The exclusion of sources suggests specific criteria or pre-qualification steps were applied, potentially limiting the number of bidders. Understanding these criteria is key to assessing if the final price reflects optimal value or if a wider competition could have yielded better terms for the government and taxpayers.
What are the primary risks associated with replacing a 40-year-old boiler plant, and what mitigation strategies are in place?
Key risks include unforeseen structural issues, discovery of hazardous materials, and integration challenges with existing systems. Mitigation likely involves thorough site assessments, contingency planning for unexpected findings, and robust project management to address issues promptly and minimize schedule or budget impacts.
How will the upgraded boiler plant contribute to the VA facility's long-term operational efficiency and sustainability?
The new plant is expected to significantly improve energy efficiency, reducing utility costs and the facility's environmental footprint. Modern boilers are typically more reliable, leading to fewer breakdowns and lower maintenance expenses over their lifespan, ensuring consistent support for facility operations.
Industry Classification
NAICS: Construction › Nonresidential Building Construction › Commercial and Institutional Building Construction
Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCTION OF BUILDINGS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: 36C25225R0004
Offers Received: 3
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 8100 GRAND AVE STE 700, CLEVELAND, OH, 44104
Business Categories: Black American Owned Business, Category Business, Limited Liability Corporation, Minority Owned Business, 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: $28,550,527
Exercised Options: $28,550,527
Current Obligation: $28,550,527
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2025-03-18
Current End Date: 2027-03-24
Potential End Date: 2027-03-24 00:00:00
Last Modified: 2026-04-13
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