VA awards $4.9M contract for elevator modernization in Hawaii, raising value-for-money questions

Contract Overview

Contract Amount: $4,892,996 ($4.9M)

Contractor: Elevated Technologies, Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2024-01-25

End Date: 2026-01-30

Contract Duration: 736 days

Daily Burn Rate: $6.6K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: MODERNIZE 6 ELEVATORS

Place of Performance

Location: HONOLULU, HONOLULU County, HAWAII, 96819

State: Hawaii Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $4.9 million to ELEVATED TECHNOLOGIES, INC for work described as: MODERNIZE 6 ELEVATORS Key points: 1. The contract's value-for-money is questionable given the lack of competition and the specific nature of the service. 2. Competition dynamics are severely limited, with the contract awarded on a non-competitive basis. 3. Risk indicators include potential overpricing due to sole-source award and the absence of performance benchmarks. 4. Performance context is limited to elevator modernization, a niche but essential building service. 5. Sector positioning is within commercial building construction, specifically focusing on vertical transportation systems.

Value Assessment

Rating: questionable

The $4.9 million price tag for modernizing six elevators warrants scrutiny, especially without competitive bidding. Benchmarking against similar elevator modernization projects across federal agencies or in the private sector would be crucial to assess if this price represents fair market value. The absence of multiple bids suggests a potential lack of price discovery, which could lead to inflated costs for taxpayers. Without comparative data, it's difficult to definitively state if this is a good deal.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a 'NOT AVAILABLE FOR COMPETITION' justification, indicating that a full and open competition was not pursued. This typically occurs when only one responsible source is available or when an urgent need cannot be met through competitive means. The lack of multiple bidders means there was no opportunity for price negotiation or comparison among different vendors, potentially impacting the final cost.

Taxpayer Impact: Sole-source awards limit the government's ability to secure the best possible pricing through competitive pressure. Taxpayers may end up paying more than they would in a competitive scenario.

Public Impact

Veterans and staff at the VA facility in Hawaii will benefit from improved and reliable elevator services. The contract delivers essential building infrastructure maintenance and upgrades. The geographic impact is localized to the specific VA facility in Hawaii. The contract supports specialized construction and maintenance jobs within the elevator industry.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competitive bidding may lead to higher costs.
Limited transparency on the justification for sole-source award.
Potential for vendor lock-in if specialized equipment is used.

Positive Signals

Addresses critical infrastructure needs for a government facility.
Contract awarded to a company with a presence in the relevant sector.
Clear contract duration and defined scope of work.

Sector Analysis

The commercial and institutional building construction sector encompasses a wide range of services, from new builds to renovations and maintenance. Elevator modernization falls within this broad category, specifically addressing the vertical transportation systems critical for building functionality. The market for elevator services is often characterized by specialized expertise and established players. This contract represents a specific investment in maintaining and upgrading essential infrastructure within a government healthcare setting.

Small Business Impact

There is no indication that this contract included a small business set-aside. Given the specialized nature of elevator modernization and the sole-source award, it is unlikely that small businesses were significantly involved as prime contractors. Subcontracting opportunities for small businesses may exist, but this would depend on the prime contractor's procurement practices and the specific needs of the modernization project.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Veterans Affairs' contracting and program management offices. Accountability measures are typically embedded in the contract terms, including performance standards and payment schedules tied to milestones. Transparency is limited by the sole-source nature of the award; however, contract details should be publicly available through federal procurement databases. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Federal Building Modernization Projects
VA Capital Asset and Business Management
Infrastructure Improvement Contracts
Commercial Elevator Services

Risk Flags

Sole-source award lacks competitive justification.
Potential for overpricing due to lack of competition.
Limited transparency on contractor's specific qualifications for this project.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $4.9 million to ELEVATED TECHNOLOGIES, INC. MODERNIZE 6 ELEVATORS

Who is the contractor on this award?

The obligated recipient is ELEVATED TECHNOLOGIES, 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 $4.9 million.

What is the period of performance?

Start: 2024-01-25. End: 2026-01-30.

What is the track record of Elevated Technologies, Inc. with federal contracts, particularly with the VA?

A review of federal procurement data would be necessary to fully assess the track record of Elevated Technologies, Inc. with the Department of Veterans Affairs and other federal agencies. This would involve examining past contract awards, performance evaluations (if available), and any history of disputes or issues. Understanding their experience with similar modernization projects, their on-time and on-budget delivery rates, and their overall compliance with federal acquisition regulations would provide crucial context for evaluating the current contract's risk and value. Without this specific data, it's difficult to gauge their reliability and past performance.

How does the cost per elevator for this modernization project compare to industry benchmarks?

To benchmark the cost per elevator, we would need to identify comparable elevator modernization projects, ideally within similar facility types (e.g., healthcare) and geographic regions, that were awarded competitively. The current contract's total value of $4,892,995.65 for six elevators equates to approximately $815,499 per elevator. This figure needs to be compared against market rates for modernizing elevators of similar complexity and age. Factors such as the extent of the modernization (e.g., full replacement vs. component upgrades), the specific elevator technology involved, and prevailing labor costs in Hawaii would influence this comparison. A lack of competitive bids makes this benchmarking even more critical to ensure fair pricing.

What specific risks are associated with a sole-source award for elevator modernization?

The primary risk associated with a sole-source award for elevator modernization is the potential for inflated pricing due to the absence of competitive pressure. Without multiple bids, the government loses the opportunity to negotiate based on the best offers. Additionally, there's a risk of reduced innovation and service quality, as the awarded contractor may face less incentive to exceed expectations. Another concern could be vendor lock-in if the modernization relies heavily on proprietary technology or parts, making future maintenance or upgrades more expensive or limited. The justification for the sole-source award itself needs careful scrutiny to ensure it was indeed warranted.

What is the expected impact of this elevator modernization on the VA facility's operational efficiency and safety?

Modernizing elevators is expected to significantly improve operational efficiency and safety at the VA facility. Older elevators can be prone to breakdowns, leading to service disruptions, increased maintenance costs, and potential safety hazards. New or modernized systems typically offer greater reliability, reduced downtime, and enhanced safety features, ensuring smoother patient and staff movement, as well as efficient transport of equipment and supplies. This upgrade is crucial for maintaining the facility's functionality and providing a safe environment for all users.

How does this $4.9 million contract fit into the VA's overall spending on facilities maintenance and upgrades?

This $4.9 million contract represents a specific investment within the Department of Veterans Affairs' broader portfolio of facilities maintenance and upgrades. The VA manages a vast network of healthcare facilities, and ongoing investments are necessary to ensure these buildings are safe, functional, and meet the evolving needs of veterans. Analyzing this contract in the context of the VA's total facilities budget, historical spending trends on infrastructure projects, and the prioritization of capital investments would provide a clearer picture of its significance. It's one component of a larger strategy to maintain and improve the physical infrastructure supporting veteran healthcare.

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: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: 36C26124R0025

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 126 SEVEN FARMS DR, STE 160-B, CHARLESTON, SC, 29492

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

Financial Breakdown

Contract Ceiling: $4,892,996

Exercised Options: $4,892,996

Current Obligation: $4,892,996

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline