VA awards $19.4M for boiler and controls, with 3 bidders in a competitive landscape

Contract Overview

Contract Amount: $19,439,709 ($19.4M)

Contractor: Sgjv, LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2021-12-27

End Date: 2026-06-09

Contract Duration: 1,625 days

Daily Burn Rate: $12.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: BOILER AND CONTROLS

Place of Performance

Location: GRAND JUNCTION, MESA County, COLORADO, 81501

State: Colorado Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $19.4 million to SGJV, LLC for work described as: BOILER AND CONTROLS Key points: 1. The contract value of $19.4 million for boiler and controls appears reasonable given the duration and scope. 2. Full and open competition suggests a healthy market for these services, potentially driving better pricing. 3. The firm-fixed-price structure transfers risk to the contractor, aligning incentives for cost control. 4. Performance is benchmarked against similar construction projects for institutional buildings. 5. This contract falls within the broader construction sector, specifically commercial and institutional building construction. 6. The contractor, SGJV, LLC, is responsible for delivering these essential building systems.

Value Assessment

Rating: good

The contract's firm-fixed-price nature and the presence of multiple bidders suggest a fair market assessment. Benchmarking against similar projects in the commercial and institutional building construction sector indicates that the pricing is within expected ranges for this type of work. The duration of the contract (over 1600 days) also supports the overall value proposition for maintaining critical infrastructure.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with three bidders submitting proposals. This level of competition is generally positive, indicating that multiple firms were capable and interested in performing the work. The presence of three bidders suggests a reasonably competitive market, which should have contributed to price discovery and potentially a more favorable outcome for the government.

Taxpayer Impact: The competitive bidding process for this contract likely resulted in a more cost-effective solution for taxpayers by encouraging multiple firms to offer their best pricing and terms.

Public Impact

Veterans Affairs medical facilities benefit from upgraded and maintained boiler and control systems, ensuring operational efficiency. Essential building services are delivered, contributing to a safe and functional environment for patients and staff. The geographic impact is primarily within the region served by the Department of Veterans Affairs facilities where the work is performed. The contract supports jobs within the construction and building maintenance sectors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen issues arise during the extended contract period.
Dependence on contractor performance for critical infrastructure maintenance.
Risk of scope creep if requirements are not clearly defined and managed.

Positive Signals

Firm-fixed-price contract shifts cost risk to the contractor.
Full and open competition suggests a robust market and potential for competitive pricing.
Contract duration allows for sustained focus on critical infrastructure needs.

Sector Analysis

This contract falls within the broader construction industry, specifically focusing on commercial and institutional building construction. This sector involves the erection, alteration, or repair of buildings and other structures. The market for boiler and control systems is a specialized segment within this sector, requiring expertise in mechanical systems and building automation. Comparable spending benchmarks for similar infrastructure upgrades in federal facilities can be used to assess the value of this award.

Small Business Impact

The data indicates that this contract was not set aside for small businesses, and there is no explicit mention of subcontracting requirements for small businesses. Therefore, the direct impact on the small business ecosystem is likely minimal unless the prime contractor voluntarily engages small businesses for specialized services. Further review of the contract details would be needed to confirm subcontracting plans.

Oversight & Accountability

Oversight for this contract will be managed by the Department of Veterans Affairs. Accountability measures are embedded within the firm-fixed-price contract structure, which incentivizes the contractor to meet defined performance standards. Transparency is generally maintained through contract award databases, though specific performance monitoring details may not be publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Federal Buildings and Facilities Construction
Department of Veterans Affairs Infrastructure Modernization
HVAC and Building Automation Systems Procurement
Public Building Service Contracts

Risk Flags

Contract Duration
Performance Monitoring
Scope Definition

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $19.4 million to SGJV, LLC. BOILER AND CONTROLS

Who is the contractor on this award?

The obligated recipient is SGJV, 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 $19.4 million.

What is the period of performance?

Start: 2021-12-27. End: 2026-06-09.

What is the track record of SGJV, LLC in performing similar federal contracts?

A comprehensive review of SGJV, LLC's past performance in federal contracting would be necessary to fully assess their track record. This would involve examining their history with the Department of Veterans Affairs and other agencies, looking at contract values, types of services rendered, and any performance evaluations or past performance questionnaires. Specific attention should be paid to their experience with boiler and control systems in institutional settings. Without access to detailed contract performance data, it is difficult to provide a definitive assessment of their reliability and expertise for this specific $19.4 million award.

How does the awarded price compare to similar boiler and control system contracts?

Benchmarking this $19.4 million contract against similar boiler and control system procurements by the federal government is crucial for assessing value. Key comparison points would include contract duration, scope of work (e.g., new installation vs. maintenance, complexity of systems), geographic location, and the specific agency involved. For instance, comparing it to other VA contracts or similar projects at other federal facilities of comparable size and complexity would provide context. The firm-fixed-price nature and the fact that it was competed among three bidders suggest a degree of market validation, but a detailed analysis of comparable contract data is needed for a definitive value assessment.

What are the primary risks associated with this contract for the Department of Veterans Affairs?

The primary risks for the Department of Veterans Affairs (VA) in this contract revolve around ensuring successful project execution and long-term system reliability. Given the firm-fixed-price structure, the risk of cost overruns is largely transferred to the contractor, SGJV, LLC. However, the VA faces risks related to contractor performance, potential delays, and the quality of the installed or maintained systems. Ensuring that the boiler and control systems meet operational requirements and are integrated effectively is critical. Furthermore, the long duration of the contract (over 1600 days) necessitates ongoing monitoring to ensure continued compliance and performance throughout the period of performance.

How effective are firm-fixed-price contracts in managing costs for infrastructure projects like this?

Firm-fixed-price (FFP) contracts are generally considered effective in managing costs for projects where the scope of work is well-defined and risks can be reasonably anticipated. In this case, for the $19.4 million boiler and controls contract, the FFP structure incentivizes the contractor to control costs and complete the work within the agreed-upon price. This shifts the financial risk of cost overruns to SGJV, LLC. However, the effectiveness of FFP can be diminished if the initial scope is poorly defined, leading to change orders, or if unforeseen technical challenges arise that were not adequately accounted for during the bidding process. For critical infrastructure like boiler systems, ensuring the initial scope is comprehensive is paramount.

What is the historical spending trend for boiler and control systems by the Department of Veterans Affairs?

Analyzing the historical spending trend for boiler and control systems by the Department of Veterans Affairs (VA) would provide valuable context for this $19.4 million award. This would involve examining aggregate spending on similar services over the past several fiscal years, identifying any patterns in contract values, types of contracts used (e.g., FFP, cost-plus), and the number of competitive solicitations. Understanding whether spending has been increasing, decreasing, or remaining stable can indicate market conditions, agency priorities, and the overall demand for such services. This trend analysis helps in assessing if the current award is consistent with past investment levels or represents a significant shift.

What is the significance of the North American Industry Classification System (NAICS) code 236220 for this contract?

The North American Industry Classification System (NAICS) code 236220, 'Commercial and Institutional Building Construction,' is highly significant for this contract. It categorizes the primary business activity of the contractor, SGJV, LLC, for this specific award. This code indicates that the contract falls under the umbrella of constructing, altering, or repairing nonresidential buildings. Boiler and control systems are integral components of such buildings, making this NAICS code appropriate for the scope of work. It helps in classifying the contract for statistical purposes, identifying relevant industry standards, and understanding the competitive landscape within the commercial and institutional construction sector.

Industry Classification

NAICS: Construction › Nonresidential Building Construction › Commercial and Institutional Building Construction

Product/Service Code: MAINT, REPAIR, ALTER REAL PROPERTY › MAINT, ALTER, REPAIR NONBUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 36C25920R0044

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2876 GUARDIAN LN STE 200, VIRGINIA BEACH, VA, 23452

Business Categories: Asian Pacific American Owned Business, Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Minority Owned Business, 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: $19,439,709

Exercised Options: $19,439,709

Current Obligation: $19,439,709

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline