VA awards $5.5M contract for HVAC services to VENERGY GROUP LLC, highlighting a competitive procurement process

Contract Overview

Contract Amount: $5,493,101 ($5.5M)

Contractor: Venergy Group LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2024-08-01

End Date: 2026-09-28

Contract Duration: 788 days

Daily Burn Rate: $7.0K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: 598-19-118 REPLACE 21 AHUS AND CHILLER-AHU 18

Place of Performance

Location: NORTH LITTLE ROCK, PULASKI County, ARKANSAS, 72114

State: Arkansas Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $5.5 million to VENERGY GROUP LLC for work described as: 598-19-118 REPLACE 21 AHUS AND CHILLER-AHU 18 Key points: 1. The contract value of $5.5 million for HVAC services appears reasonable given the duration and scope. 2. Full and open competition was utilized, suggesting a robust market response and potential for competitive pricing. 3. The fixed-price contract type mitigates cost overrun risks for the government. 4. This award falls within the broader category of facilities maintenance and infrastructure support for the VA. 5. The contractor, VENERGY GROUP LLC, is a new awardee for this specific type of service with the VA. 6. The contract duration of approximately two years provides a stable period for service delivery.

Value Assessment

Rating: good

The contract value of $5.5 million for a 788-day period, covering HVAC services, suggests a moderate annual expenditure. Benchmarking against similar HVAC maintenance contracts for federal facilities of comparable size and complexity would be necessary for a definitive value assessment. However, the fixed-price nature of the award provides cost certainty for the Department of Veterans Affairs, which is a positive indicator of value.

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 the solicitation was broadly advertised, and multiple bids were likely considered. The presence of 5 bids suggests a healthy level of competition, which typically drives down prices and encourages better service offerings. This procurement method is generally favored for ensuring the government receives the best possible value.

Taxpayer Impact: The use of full and open competition benefits taxpayers by ensuring that multiple qualified contractors had the opportunity to bid, leading to a more competitive price and potentially higher quality services. This process helps prevent inflated costs that can arise from limited competition.

Public Impact

Veterans and VA staff will benefit from improved and reliable HVAC systems in VA facilities. Essential maintenance and repair services for critical heating, ventilation, and air conditioning units will be delivered. The geographic impact is focused on Arkansas, where the services will be performed. This contract supports jobs within the HVAC contracting sector in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for performance variability given this is a new awardee for this specific service type with the VA.
Ensuring consistent service quality across the contract duration will require diligent oversight.

Positive Signals

The use of full and open competition suggests a strong pool of qualified bidders.
The firm-fixed-price contract type provides cost predictability for the agency.
The contract is awarded to a company with experience in the HVAC sector.

Sector Analysis

The HVAC services sector is a critical component of facilities management across all industries, including government. Federal spending in this area supports the maintenance and operational efficiency of government buildings. This contract fits within the broader category of building maintenance and repair services, which is a significant market. Comparable spending benchmarks would involve analyzing other federal contracts for similar HVAC services at VA facilities or other agencies of similar scale.

Small Business Impact

The data indicates that small business participation was not a specific set-aside for this contract (ss: false, sb: false). While VENERGY GROUP LLC is the prime contractor, there is no explicit information on subcontracting plans for small businesses within this award. Further analysis would be needed to determine if subcontracting opportunities exist and how they might impact the small business ecosystem.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of Veterans Affairs contracting officer and potentially through designated technical representatives who will monitor performance and ensure compliance with contract terms. The firm-fixed-price nature of the contract simplifies some aspects of financial oversight, but performance monitoring remains crucial. Transparency is facilitated through contract award databases, though detailed performance reports are typically internal.

Related Government Programs

Federal Buildings Maintenance Contracts
HVAC Services for Government Facilities
Department of Veterans Affairs Facilities Management
Infrastructure Support Services

Risk Flags

Potential performance risk due to new awardee for this specific service type.
Need for diligent contract oversight to ensure service quality.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $5.5 million to VENERGY GROUP LLC. 598-19-118 REPLACE 21 AHUS AND CHILLER-AHU 18

Who is the contractor on this award?

The obligated recipient is VENERGY GROUP 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 $5.5 million.

What is the period of performance?

Start: 2024-08-01. End: 2026-09-28.

What is the track record of VENERGY GROUP LLC with the Department of Veterans Affairs for similar HVAC services?

Based on the provided data, VENERGY GROUP LLC is a new awardee for this specific type of service with the Department of Veterans Affairs. While the data does not detail past performance with the VA for HVAC services, it indicates this is a recent contract award. Further investigation into federal procurement databases like SAM.gov or FPDS would be necessary to ascertain any prior contract history, past performance evaluations, or experience with similar federal agencies. The absence of extensive prior history for this specific service type might warrant closer monitoring of performance during the initial phases of the contract to ensure alignment with expectations.

How does the awarded price of $5.5 million compare to market rates for similar HVAC services?

The awarded price of $5.5 million for approximately 788 days of HVAC services needs to be benchmarked against market rates for similar contracts. Without specific details on the scope of work (e.g., number of units, types of services like preventative maintenance vs. emergency repairs, geographic coverage within Arkansas), a precise comparison is difficult. However, the contract's firm-fixed-price nature suggests that the price was determined to be competitive and acceptable by the VA at the time of award. To conduct a thorough comparison, one would analyze average hourly rates for HVAC technicians, equipment costs, and typical contract values for federal facilities of similar size and complexity in the Arkansas region.

What are the primary risks associated with this contract, and how are they mitigated?

The primary risks associated with this contract include potential performance issues from a new awardee for this specific service type with the VA, and ensuring consistent service quality over the contract's duration. Mitigation strategies are inherent in the contract structure and agency oversight. The firm-fixed-price (FFP) contract type shifts the risk of cost overruns to the contractor, VENERGY GROUP LLC. The Department of Veterans Affairs will mitigate performance risks through diligent contract administration, including regular performance reviews, site inspections, and clear communication channels. The competitive nature of the award also serves as a risk mitigator, as contractors are incentivized to perform well to secure future work.

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

The 'Full and Open Competition After Exclusion of Sources' method is generally highly effective in ensuring value for federal contracts. This approach mandates that the solicitation is widely advertised, allowing any responsible source to submit an offer. The data indicates five bids were received, suggesting a robust competitive environment. This level of competition typically drives down prices, encourages innovation, and ensures that the government selects the offer that represents the best overall value, considering both price and technical factors. The VA's choice of this method indicates a commitment to maximizing taxpayer return on investment for these essential HVAC services.

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

Historical spending patterns for HVAC services by the Department of Veterans Affairs are substantial, reflecting the agency's extensive network of healthcare facilities and administrative buildings that require continuous climate control and maintenance. The VA consistently invests in maintaining its infrastructure to ensure the health and well-being of veterans and staff. Annual spending can fluctuate based on major repair projects, equipment upgrades, and the number of facilities under management. Analyzing past VA contracts for HVAC maintenance and repair, including contract values, durations, and awardees, would reveal trends in spending, common service providers, and the typical cost structures for such services across different VA regions.

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: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 36C25623R0081

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 3130 SEMINOLE RD, FORT PIERCE, FL, 34951

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $5,493,101

Exercised Options: $5,493,101

Current Obligation: $5,493,101

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline