DOT awards $6.5M HVAC project to E CORP, highlighting construction sector spending in California

Contract Overview

Contract Amount: $6,518,184 ($6.5M)

Contractor: E Corp

Awarding Agency: Department of Transportation

Start Date: 2024-01-09

End Date: 2027-01-30

Contract Duration: 1,117 days

Daily Burn Rate: $5.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: ZLA HVAC REFURBISHMENT PROJECT (AHU 200, 300, AND 500)

Place of Performance

Location: PALMDALE, LOS ANGELES County, CALIFORNIA, 93550

State: California Government Spending

Plain-Language Summary

Department of Transportation obligated $6.5 million to E CORP for work described as: ZLA HVAC REFURBISHMENT PROJECT (AHU 200, 300, AND 500) Key points: 1. Project focuses on essential building infrastructure upgrades, indicating a need for modernization. 2. The contract was awarded through full and open competition, suggesting a competitive bidding process. 3. Fixed-price contract type aims to control costs and provide budget certainty. 4. Project duration of over three years suggests a significant scope of work. 5. Geographic focus on California aligns with broader federal infrastructure investment trends in high-cost areas. 6. The award to E CORP, a single contractor, warrants scrutiny for potential performance and pricing risks.

Value Assessment

Rating: fair

The contract value of $6.5 million for HVAC refurbishment appears within a reasonable range for a project of this scope and duration, particularly given the location in California. Benchmarking against similar large-scale commercial building construction projects in the region would provide a more precise value-for-money assessment. The firm-fixed-price structure is a positive indicator for cost control, but the absence of detailed cost breakdowns makes a granular price assessment challenging. Further analysis would require comparison with industry cost indices for HVAC systems and construction labor in the specified geographic area.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. This method is generally preferred for maximizing competition and achieving the best possible pricing for the government. The number of bidders is not specified, but the use of this procurement method suggests that multiple entities likely vied for the contract, which should have contributed to competitive pricing.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically leads to lower prices and better quality services by fostering a competitive environment among potential contractors.

Public Impact

The primary beneficiaries are the Department of Transportation and the Federal Aviation Administration, ensuring operational efficiency and improved working conditions at their facilities. The project will deliver essential upgrades to HVAC systems (AHU 200, 300, and 500), improving air quality and climate control. The geographic impact is concentrated in California, supporting local construction and maintenance services. Workforce implications include employment opportunities for skilled tradespeople in the construction and HVAC sectors within California.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen issues arise during the multi-year refurbishment.
Dependence on a single contractor (E CORP) for project completion could lead to performance risks.
Limited transparency on specific cost components within the firm-fixed-price contract.
Potential for schedule delays impacting facility operations if not managed effectively.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Full and open competition suggests a robust bidding process that should yield competitive pricing.
Project addresses critical infrastructure needs, ensuring long-term operational stability.
Awarding to a single entity may streamline project management and execution.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a significant segment of the broader construction industry. Federal spending in this area often supports the maintenance, repair, and upgrade of government facilities. The market for HVAC services and construction is competitive, with numerous firms capable of undertaking such projects. This specific award represents a moderate investment within the context of large federal construction projects, but is substantial for a single facility refurbishment.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a result, large businesses likely dominated the bidding process. There is no explicit information on subcontracting plans for small businesses, which could represent missed opportunities to engage the small business ecosystem. Future analysis should investigate subcontracting goals and performance to assess the impact on small business participation.

Oversight & Accountability

Oversight for this contract will likely be managed by the contracting officer and program managers within the Federal Aviation Administration. The firm-fixed-price nature of the contract provides a degree of accountability for E CORP to deliver within the agreed budget. Transparency could be enhanced by public reporting on project milestones and any modifications. The Inspector General's office may conduct audits or investigations if performance issues or potential fraud are identified.

Related Government Programs

Federal Building and Facilities Maintenance
HVAC System Upgrades
Commercial Construction Projects
Department of Transportation Procurement
Federal Aviation Administration Infrastructure

Risk Flags

Single Contractor Dependency
Potential for Cost Overruns
Schedule Delay Risk
Limited Cost Transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $6.5 million to E CORP. ZLA HVAC REFURBISHMENT PROJECT (AHU 200, 300, AND 500)

Who is the contractor on this award?

The obligated recipient is E CORP.

Which agency awarded this contract?

Awarding agency: Department of Transportation (Federal Aviation Administration).

What is the total obligated amount?

The obligated amount is $6.5 million.

What is the period of performance?

Start: 2024-01-09. End: 2027-01-30.

What is E CORP's track record with similar federal HVAC refurbishment contracts?

A review of E CORP's contract history with the federal government is necessary to assess their performance on similar HVAC refurbishment projects. Key indicators would include past performance evaluations, any history of contract disputes or terminations, and the successful completion of projects within budget and schedule. Without specific data on prior comparable projects, it is difficult to definitively assess their suitability and reliability for this particular $6.5 million award. Further investigation into their experience with large-scale commercial and institutional building construction, particularly involving complex HVAC systems, would provide valuable context.

How does the awarded price compare to market rates for similar HVAC refurbishment projects in California?

Benchmarking the $6.5 million award against market rates for similar HVAC refurbishment projects in California is crucial for assessing value for money. This would involve analyzing industry cost data for labor, materials, and equipment specific to large commercial and institutional buildings in the region. Factors such as the specific scope of work (e.g., replacing air handling units, ductwork, controls), the size and complexity of the facilities, and prevailing economic conditions would need to be considered. A preliminary assessment suggests the price is within a reasonable range given California's high cost of living and construction, but a detailed cost analysis comparing specific line items to industry benchmarks is required for a definitive conclusion.

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

The primary risks associated with this contract include potential cost overruns due to unforeseen site conditions or material price fluctuations, schedule delays impacting facility operations, and performance issues from the contractor, E CORP. Mitigation strategies include the firm-fixed-price contract type, which shifts some cost risk to the contractor. The multi-year duration (over three years) necessitates robust project management and oversight from the Federal Aviation Administration to monitor progress and address issues proactively. While full and open competition suggests a capable contractor was selected, ongoing performance monitoring and clear communication channels are essential to ensure successful project completion.

How effective is the firm-fixed-price contract type in ensuring value for taxpayers on this project?

The firm-fixed-price (FFP) contract type is generally effective in ensuring value for taxpayers by providing cost certainty and encouraging contractor efficiency. Under an FFP agreement, the contractor is obligated to complete the work for a predetermined price, absorbing any cost overruns. This incentivizes E CORP to manage its resources effectively and control expenses. However, the effectiveness is contingent on the initial price being set appropriately based on thorough cost estimation and market analysis. If the initial price was too high, taxpayers may overpay despite the FFP structure. Conversely, if the scope is not clearly defined, contractors may cut corners, impacting quality.

What is the historical spending pattern for HVAC refurbishment projects by the Department of Transportation?

Analyzing historical spending patterns for HVAC refurbishment projects by the Department of Transportation (DOT) is essential for contextualizing this $6.5 million award. This involves examining previous contract awards for similar services, noting the average contract values, durations, and the number of bidders. Understanding whether spending on such projects has been increasing, decreasing, or remaining stable can indicate trends in infrastructure investment and maintenance priorities. Comparing the current award amount to historical averages can help determine if it represents a typical investment, an outlier, or a significant increase in spending, potentially signaling a shift in the agency's approach to facility upkeep.

What are the implications of awarding this contract to a single entity, E CORP?

Awarding this HVAC refurbishment project to a single entity, E CORP, simplifies contract administration and provides a clear point of accountability. It can lead to greater efficiency and potentially faster project execution as there is no need to coordinate multiple prime contractors. However, it also concentrates risk; the government is heavily reliant on E CORP's performance, financial stability, and capacity. If E CORP underperforms or faces financial difficulties, the project could be significantly delayed or compromised. The government's oversight and performance monitoring become critical to mitigate these risks and ensure the successful completion of the project within the specified terms.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 697DCK-23-R-00587

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1598 N HILL FIELD RD, LAYTON, UT, 84041

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

Financial Breakdown

Contract Ceiling: $6,518,184

Exercised Options: $6,518,184

Current Obligation: $6,518,184

Actual Outlays: $2,298,915

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 697DCK23G00009

IDV Type: BOA

Timeline