VA awards $8.39M construction contract to Industrial Maintenance Services Inc. for St. Cloud facility

Contract Overview

Contract Amount: $8,392,130 ($8.4M)

Contractor: Industrial Maintenance Services Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2024-09-16

End Date: 2027-07-06

Contract Duration: 1,023 days

Daily Burn Rate: $8.2K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: 656-400 CONSTRUCT PACT BLDG. 4 1ST FLOOR - ST. CLOUD, MN - MINOR CONSTRUCTION

Place of Performance

Location: SAINT CLOUD, STEARNS County, MINNESOTA, 56303

State: Minnesota Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $8.4 million to INDUSTRIAL MAINTENANCE SERVICES INC for work described as: 656-400 CONSTRUCT PACT BLDG. 4 1ST FLOOR - ST. CLOUD, MN - MINOR CONSTRUCTION Key points: 1. Contract awarded for minor construction and building maintenance at a VA facility. 2. The contract duration is over 3 years, indicating a need for ongoing services. 3. Awarded through full and open competition, suggesting a competitive bidding process. 4. The firm-fixed-price structure aims to control costs for the government. 5. The contractor, Industrial Maintenance Services Inc., has a history with federal contracts. 6. The project is located in St. Cloud, Minnesota, impacting local resources.

Value Assessment

Rating: good

The contract value of $8.39 million for minor construction and maintenance appears reasonable given the 3-year duration. Benchmarking against similar VA construction and maintenance contracts would provide a clearer picture of value for money. The firm-fixed-price type suggests cost certainty for the government, which is a positive indicator. However, without specific details on the scope of work, a precise value assessment is challenging.

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,' which typically means that all responsible sources were permitted to submit a bid. The presence of two bids suggests a moderate level of competition for this specific requirement. While not a large number of bidders, it indicates that the opportunity was advertised and received interest from multiple firms.

Taxpayer Impact: The competitive nature of this award, even with two bidders, likely resulted in a more favorable price for taxpayers compared to a sole-source or limited competition scenario. It ensures that the government is not overpaying due to a lack of alternatives.

Public Impact

Veterans in the St. Cloud, MN area will benefit from improved facilities. The contract supports the maintenance and minor construction needs of a Department of Veterans Affairs facility. The project's geographic impact is localized to St. Cloud, Minnesota. The contract will likely create or sustain jobs in the construction and maintenance sectors in the local area.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep in minor construction projects if not clearly defined.
Dependence on a single contractor for an extended period could lead to complacency.
Ensuring timely completion and quality of work over the 3-year duration requires diligent oversight.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Awarded through full and open competition, suggesting a competitive market.
Contract duration allows for consistent facility upkeep and planned improvements.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, specifically focusing on maintenance and minor construction. The federal government is a significant consumer of construction services, with spending often driven by infrastructure needs, facility upgrades, and new construction projects across various agencies. The market for these services is competitive, with numerous firms capable of undertaking such work. This specific award represents a portion of the VA's broader real property maintenance and construction budget.

Small Business Impact

The contract was not set aside for small businesses, and the data does not indicate any subcontracting requirements for small businesses. This suggests that the primary award went to a larger entity, and the direct impact on the small business ecosystem through this specific contract may be limited unless the prime contractor voluntarily engages small business subcontractors.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of Veterans Affairs contracting officers and project managers. Accountability measures are inherent in the firm-fixed-price contract type, which obligates the contractor to deliver specified work for an agreed-upon price. Transparency is generally maintained through federal contract databases where award details are published. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

VA Facility Maintenance Contracts
Federal Construction Contracts
Minor Construction Projects
Commercial Building Maintenance

Risk Flags

Potential for cost overruns if scope is not well-defined.
Risk of contractor performance issues over the 3-year duration.
Dependence on a limited number of bidders for price discovery.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $8.4 million to INDUSTRIAL MAINTENANCE SERVICES INC. 656-400 CONSTRUCT PACT BLDG. 4 1ST FLOOR - ST. CLOUD, MN - MINOR CONSTRUCTION

Who is the contractor on this award?

The obligated recipient is INDUSTRIAL MAINTENANCE SERVICES 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 $8.4 million.

What is the period of performance?

Start: 2024-09-16. End: 2027-07-06.

What is the track record of Industrial Maintenance Services Inc. with federal contracts, particularly with the VA?

Industrial Maintenance Services Inc. has a history of receiving federal contracts. While the provided data indicates this specific contract is with the Department of Veterans Affairs (VA), a deeper dive into contract databases would reveal the extent and nature of their past performance. Analyzing previous awards, contract values, and performance reviews would provide insight into their reliability, quality of work, and adherence to schedules and budgets. Understanding their experience with similar-sized projects and facility types is crucial for assessing their capability to successfully execute this current contract.

How does the awarded amount of $8.39 million compare to similar VA construction and maintenance contracts?

Benchmarking this $8.39 million contract against similar VA construction and maintenance projects requires access to a broader dataset of federal contract awards. Factors such as the scope of work (e.g., square footage, type of construction, specific maintenance tasks), geographic location, and contract duration significantly influence pricing. If this contract covers extensive renovations or new construction, the amount might be standard. However, for routine maintenance or minor upgrades, it could represent a higher-than-average cost. A comparative analysis would involve identifying contracts with comparable NAICS codes (236220) and service descriptions to determine if the pricing is competitive.

What are the primary risks associated with this firm-fixed-price construction contract?

The primary risks associated with this firm-fixed-price (FFP) construction contract, despite its cost control benefits, include potential contractor underestimation of costs leading to quality compromises or contractor default. If the scope of work is not meticulously defined, change orders could significantly increase the final cost, negating some FFP benefits. There's also the risk of delays impacting facility operations. Furthermore, the contractor's financial stability and capacity to manage a project of this scale over its duration are critical risk factors. Ensuring robust oversight to monitor progress and quality is essential to mitigate these risks.

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

The 'Full and Open Competition After Exclusion of Sources' method is generally effective in ensuring value for money, as it allows all responsible bidders to compete. The fact that two bids were received suggests that the market was accessible and that competition, albeit limited to two bidders, occurred. This competitive pressure typically drives prices down and encourages better service offerings. However, the effectiveness is maximized when the solicitation is clear, the evaluation criteria are objective, and the number of bidders is sufficient to represent a robust market. With only two bidders, the degree of price discovery might be less than with a larger pool, but it is still superior to non-competitive methods.

What are the historical spending patterns for similar construction and maintenance services by the Department of Veterans Affairs?

Historical spending patterns by the VA on construction and maintenance services reveal a consistent and substantial investment in its infrastructure. The VA manages a vast network of facilities, requiring ongoing expenditures for repairs, upgrades, and new construction. Annual spending in this category often runs into billions of dollars across the agency. Factors influencing these patterns include the age of facilities, healthcare technology advancements requiring facility modifications, and national policies regarding veteran care. This specific $8.39 million contract represents a small fraction of the VA's overall capital expenditures for facility management.

What are the implications of this contract's duration (over 3 years) on long-term facility management and contractor performance?

A contract duration exceeding three years for construction and maintenance implies a strategic approach to facility upkeep, allowing for planned improvements and consistent service delivery. This extended period can foster a stronger working relationship between the VA and Industrial Maintenance Services Inc., potentially leading to better understanding of the facility's needs and more efficient operations. However, it also necessitates robust performance monitoring to ensure the contractor maintains high standards throughout the contract term and to address any potential issues proactively. Long-term contracts can offer cost efficiencies through economies of scale and reduced administrative burden associated with frequent re-procurement.

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: SEALED BID

Solicitation ID: 36C77624B0021

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1920 20TH AVE N, ESCANABA, MI, 49829

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

Financial Breakdown

Contract Ceiling: $8,392,130

Exercised Options: $8,392,130

Current Obligation: $8,392,130

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline