VA awards $13.4M contract for chiller plant replacement at Jack C. Montgomery VAMC

Contract Overview

Contract Amount: $13,432,017 ($13.4M)

Contractor: Utility Systems Solutions, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2022-05-16

End Date: 2026-03-24

Contract Duration: 1,408 days

Daily Burn Rate: $9.5K/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: JACK C. MONTGOMERY VAMC REPLACE CHILLER PLANT

Place of Performance

Location: MUSKOGEE, MUSKOGEE County, OKLAHOMA, 74401

State: Oklahoma Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $13.4 million to UTILITY SYSTEMS SOLUTIONS, INC. for work described as: JACK C. MONTGOMERY VAMC REPLACE CHILLER PLANT Key points: 1. Contract awarded to Utility Systems Solutions, Inc. for essential facility upgrade. 2. Project aims to improve HVAC reliability and energy efficiency at the medical center. 3. The contract duration is 1408 days, indicating a significant, long-term project. 4. Fixed-price contract type suggests defined costs, potentially limiting budget overruns. 5. The award was made under full and open competition, indicating a competitive process. 6. The project falls under the broad category of commercial and institutional building construction.

Value Assessment

Rating: good

The contract value of $13.4 million for a chiller plant replacement appears reasonable for a project of this scale and complexity within a Department of Veterans Affairs medical facility. Benchmarking against similar HVAC infrastructure upgrades in large healthcare institutions suggests that this price falls within expected ranges. The firm fixed-price structure provides cost certainty, which is a positive indicator for value, assuming the scope of work is well-defined and executed efficiently.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded using full and open competition after exclusion of sources, indicating that multiple vendors were likely solicited and evaluated. The presence of 3 bids suggests a moderate level of competition for this specialized construction project. While not an exhaustive number, it provides a basis for price discovery and ensures that the award was made to a qualified contractor based on best value.

Taxpayer Impact: The competitive bidding process helps ensure that taxpayer dollars are used efficiently by driving down costs and selecting the most capable contractor for the job.

Public Impact

Veterans receiving care at the Jack C. Montgomery VAMC will benefit from improved environmental controls and reliable HVAC systems. The project ensures the continued operational integrity of a critical healthcare facility. The construction work will likely involve local skilled labor, contributing to the regional economy. Improved energy efficiency may lead to long-term operational cost savings for the VA.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep in a long-duration construction project.
Ensuring timely completion within the 1408-day timeframe is crucial.
Coordination with ongoing medical center operations during construction.

Positive Signals

Award to a single, established contractor for a complex project.
Firm fixed-price contract provides cost predictability.
Project addresses critical infrastructure needs for a VA facility.

Sector Analysis

This contract falls within the construction sector, specifically focusing on institutional building construction and mechanical systems. The market for large-scale HVAC replacements in federal facilities is specialized, often involving significant project management and technical expertise. Comparable spending benchmarks for similar infrastructure projects at federal medical centers can vary widely based on size, location, and system complexity, but a $13.4 million investment for a chiller plant replacement is substantial and indicative of a major upgrade.

Small Business Impact

The contract was awarded through full and open competition and does not indicate a specific small business set-aside. While the prime contractor is Utility Systems Solutions, Inc., there is no explicit information provided regarding subcontracting plans or goals for small businesses. Further analysis would be needed to determine if subcontracting opportunities exist and if they are being utilized to engage the small business ecosystem.

Oversight & Accountability

The Department of Veterans Affairs is responsible for overseeing this contract. Oversight mechanisms would typically include regular progress reviews, site inspections, and adherence to contract terms and conditions. Accountability is ensured through the firm fixed-price structure and performance requirements. Transparency is generally maintained through contract award databases, though detailed project-specific oversight reports may not be publicly available.

Related Government Programs

VA Medical Facility Construction
Federal HVAC System Upgrades
Public Building Infrastructure Projects
Energy Efficiency Initiatives in Government Facilities

Risk Flags

Potential for cost overruns if scope is not tightly managed.
Risk of project delays due to unforeseen site conditions or labor shortages.
Ensuring seamless integration with existing hospital infrastructure and operations.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $13.4 million to UTILITY SYSTEMS SOLUTIONS, INC.. JACK C. MONTGOMERY VAMC REPLACE CHILLER PLANT

Who is the contractor on this award?

The obligated recipient is UTILITY SYSTEMS SOLUTIONS, INC..

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 $13.4 million.

What is the period of performance?

Start: 2022-05-16. End: 2026-03-24.

What is the track record of Utility Systems Solutions, Inc. with the Department of Veterans Affairs and similar federal projects?

A review of federal procurement data indicates that Utility Systems Solutions, Inc. has been awarded multiple contracts across various federal agencies, including the Department of Veterans Affairs. Their contract history includes projects related to facility maintenance, construction, and utility systems. Specific to the VA, they have secured contracts for similar infrastructure work. Analyzing the performance history, including any past performance evaluations, contract modifications, or disputes, would provide a clearer picture of their reliability and capability in executing projects of this magnitude and complexity. Understanding their experience with chiller plant replacements specifically would be a key factor in assessing their suitability for this particular award.

How does the awarded amount compare to the estimated cost or budget for this chiller plant replacement project?

The provided data indicates an award amount of $13,432,016.93. Without access to the government's initial cost estimate or the agency's approved budget for this specific project, a direct comparison is not possible. However, the fact that the contract was awarded under full and open competition with three bids suggests that the award amount was competitive. If the award is significantly below the government's estimate, it could indicate effective competition or potentially an underestimated scope by the agency. Conversely, if it's at or above the estimate, it suggests the estimate was realistic. Further investigation into the agency's budgeting process for capital infrastructure projects would be necessary for a definitive assessment.

What are the primary risks associated with a long-duration construction project like this chiller plant replacement?

Long-duration construction projects, such as this 1408-day chiller plant replacement, carry several inherent risks. Material cost escalation is a significant concern, especially with a firm fixed-price contract, as unforeseen price increases could impact the contractor's profitability if not adequately managed. Labor availability and potential shortages of skilled trades can lead to project delays. Weather disruptions, unforeseen site conditions (e.g., encountering unexpected geological issues or existing utility conflicts), and the need for extensive coordination with ongoing hospital operations are also critical risks. Furthermore, changes in regulatory requirements or environmental standards during the project's multi-year timeline could necessitate costly modifications. Effective risk mitigation strategies, including robust project management, contingency planning, and clear communication protocols, are essential.

What is the expected impact of this chiller plant replacement on the operational efficiency and energy consumption of the VA medical center?

The primary goal of replacing an aging chiller plant is to significantly improve the operational efficiency and reduce energy consumption of the Jack C. Montgomery VAMC. Modern chiller systems are designed with advanced technology that offers higher energy efficiency ratios (EER) compared to older units, leading to substantial reductions in electricity usage for cooling. This translates directly into lower utility costs for the facility. Furthermore, newer plants are generally more reliable, reducing the risk of unexpected breakdowns and costly emergency repairs, thereby enhancing the overall operational stability of the medical center. Improved temperature and humidity control can also contribute to better patient comfort and medical equipment performance.

How does the competition level (3 bidders) for this contract potentially influence the final price and contractor performance?

Having three bidders for this contract suggests a moderate level of competition. While more bidders generally lead to more competitive pricing, three offers provide a reasonable basis for price discovery and allow the agency to select the best value. If the bids were widely divergent, it might indicate differing interpretations of the scope or varying levels of risk assessment by the bidders. A moderate number of bidders can still incentivize contractors to offer competitive pricing and demonstrate strong performance to secure the award and potentially future work. However, it's less competitive than a scenario with numerous offers, which could potentially drive prices even lower. The agency's evaluation process, focusing on both price and technical factors, would be crucial in ensuring a favorable outcome for taxpayers.

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 AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 36C25921R0061

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 14330 MIDWAY ROAD STE 200, DALLAS, TX, 75244

Business Categories: Category Business, Corporate Entity Not Tax Exempt, 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: $13,432,017

Exercised Options: $13,432,017

Current Obligation: $13,432,017

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline