Coast Guard awards $3M contract for Honolulu AC modernization, highlighting infrastructure needs

Contract Overview

Contract Amount: $3,018,435 ($3.0M)

Contractor: Choice Sheetmetal LLC

Awarding Agency: Department of Homeland Security

Start Date: 2024-03-05

End Date: 2026-03-27

Contract Duration: 752 days

Daily Burn Rate: $4.0K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: MODERNIZE AIR CONDITIONING SYSTEMS AT U.S. COAST GUARD BASE HONOLULU, HAWAII.

Place of Performance

Location: HONOLULU, HONOLULU County, HAWAII, 96819

State: Hawaii Government Spending

Plain-Language Summary

Department of Homeland Security obligated $3.0 million to CHOICE SHEETMETAL LLC for work described as: MODERNIZE AIR CONDITIONING SYSTEMS AT U.S. COAST GUARD BASE HONOLULU, HAWAII. Key points: 1. Contract addresses critical infrastructure upgrades for operational readiness. 2. Focus on modernizing essential building systems to improve efficiency and reliability. 3. Award to a single contractor suggests specific capabilities or market conditions. 4. Project duration indicates a significant undertaking in system replacement. 5. Geographic focus on Hawaii highlights unique operational environments. 6. Firm-fixed-price structure aims to control costs for the government.

Value Assessment

Rating: good

The contract value of $3,018,435 for modernizing air conditioning systems appears reasonable for a project of this scope and duration (752 days). Benchmarking against similar large-scale HVAC system upgrades in institutional or government facilities would provide a more precise value-for-money assessment. The firm-fixed-price contract type suggests that the contractor bears the risk of cost overruns, which is generally favorable for the government. However, without detailed cost breakdowns or comparisons to industry standards for similar system replacements, a definitive assessment of pricing efficiency is limited.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' which indicates that while the initial solicitation may have been broad, certain sources were excluded before the final award. This suggests a limited competition scenario, potentially due to specific technical requirements, past performance, or geographic considerations. With 4 bids received, the competition level was moderate, which can lead to price discovery but may not be as robust as full and open competition with a larger number of bidders. The exclusion of sources warrants further investigation into the justification.

Taxpayer Impact: A limited competition may result in slightly higher prices compared to a fully open process, as fewer potential bidders are considered. However, the presence of 4 bids suggests that taxpayers likely still benefited from competitive pricing, albeit with less certainty than a broader competition.

Public Impact

Benefits U.S. Coast Guard personnel by ensuring a functional and comfortable working environment at Base Honolulu. Delivers essential infrastructure improvements to a key military installation in Hawaii. Enhances the operational readiness and resilience of Coast Guard assets in the Pacific region. Supports local employment in Hawaii through the construction and installation services required.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'exclusion of sources' in the competition method raises questions about whether the most competitive pricing was achieved.
Limited public information on the specific technical requirements that may have led to source exclusion.
The duration of the contract (752 days) could introduce risks related to material price fluctuations or labor availability over an extended period.

Positive Signals

The firm-fixed-price contract type provides cost certainty for the government.
Awarding to a single contractor (CHOICE SHEETMETAL LLC) may indicate specialized expertise relevant to the project's needs.
The project addresses critical infrastructure, directly supporting the Coast Guard's mission in Hawaii.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, specifically focusing on mechanical systems. The U.S. government is a significant consumer of construction services, with spending often driven by infrastructure modernization, facility maintenance, and new construction requirements across various agencies. Projects like this, involving HVAC system upgrades, are common in maintaining operational facilities. Comparable spending benchmarks would typically be assessed based on square footage, system complexity, and regional labor costs for similar institutional building projects.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). With 4 bids received, it's possible that small businesses participated, but the award went to CHOICE SHEETMETAL LLC. Further analysis would be needed to determine if subcontracting opportunities for small businesses are included or encouraged within this contract to ensure broader economic impact.

Oversight & Accountability

Oversight for this contract would primarily fall under the U.S. Coast Guard, a component of the Department of Homeland Security. Accountability measures are typically embedded in the contract terms, including performance standards, delivery schedules, and payment milestones. Transparency is facilitated through public contract databases like FPDS. The Inspector General for the Department of Homeland Security would have jurisdiction to investigate any potential fraud, waste, or abuse related to this award.

Related Government Programs

Coast Guard Facility Maintenance Contracts
Department of Homeland Security Infrastructure Modernization
Federal HVAC System Upgrades
Military Base Construction Projects

Risk Flags

Limited Competition Justification
Potential for Cost Overruns (if not managed tightly)
Supply Chain Risks (extended duration)

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $3.0 million to CHOICE SHEETMETAL LLC. MODERNIZE AIR CONDITIONING SYSTEMS AT U.S. COAST GUARD BASE HONOLULU, HAWAII.

Who is the contractor on this award?

The obligated recipient is CHOICE SHEETMETAL LLC.

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (U.S. Coast Guard).

What is the total obligated amount?

The obligated amount is $3.0 million.

What is the period of performance?

Start: 2024-03-05. End: 2026-03-27.

What specific technical requirements or past performance criteria led to the exclusion of certain sources in this 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' award?

The justification for excluding sources in a 'Full and Open Competition After Exclusion of Sources' award typically stems from specific, documented requirements that only a limited number of contractors can meet. This could include unique technical specifications for the air conditioning systems, specialized installation techniques required for the existing facility at U.S. Coast Guard Base Honolulu, or stringent past performance records demonstrating successful completion of similar complex projects. Without access to the detailed justification documents filed with the contract award, the precise reasons for exclusion remain speculative. However, such exclusions are intended to ensure that the selected contractor possesses the necessary expertise and capabilities to successfully execute the project, even if it narrows the competitive pool and potentially impacts the final price.

How does the awarded amount of $3,018,435 compare to the estimated cost or budget for modernizing air conditioning systems in similar-sized federal facilities in Hawaii?

Benchmarking the $3,018,435 award against similar projects is crucial for assessing value. Modernizing HVAC systems in a facility the size implied by a Coast Guard base in Honolulu involves significant costs due to specialized equipment, labor rates in Hawaii, and the complexity of integrating new systems with existing infrastructure. While specific cost breakdowns are not public, a project of this scale and duration (752 days) could range from several hundred thousand to several million dollars depending on the scope. Factors like the age and condition of the existing systems, the type of new equipment specified (e.g., energy efficiency ratings, smart controls), and the specific environmental challenges in Hawaii (humidity, salt air) heavily influence the final cost. A detailed cost-benefit analysis comparing the expected energy savings and improved reliability against the upfront investment would further illuminate the value proposition.

What are the potential risks associated with the 752-day duration of this contract, and what mitigation strategies are likely in place?

A contract duration of 752 days (approximately two years) for modernizing air conditioning systems presents several potential risks. These include: 1) Material Cost Escalation: Prices for HVAC components, metals, and other materials can fluctuate significantly over two years, potentially impacting the contractor's profitability if not adequately managed within the firm-fixed-price structure. 2) Labor Availability and Cost: Securing skilled labor for an extended period in a specific geographic location like Hawaii can be challenging and subject to wage inflation. 3) Technological Obsolescence: While less likely for core HVAC systems, unforeseen advancements could emerge. 4) Project Delays: Unforeseen site conditions, weather events, or supply chain disruptions could extend the timeline further. Mitigation strategies likely include robust contract management by the Coast Guard, requiring the contractor to provide detailed project schedules, regular progress reports, and proactive risk management plans. The firm-fixed-price nature incentivizes the contractor to manage these risks efficiently to maintain their profit margin.

What is the track record of CHOICE SHEETMETAL LLC in performing similar large-scale government contracts, particularly in the construction or HVAC sector?

Information regarding the specific track record of CHOICE SHEETMETAL LLC for large-scale government contracts, especially in the construction or HVAC sector, is not detailed in the provided data. A comprehensive assessment would require reviewing their past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), the value and complexity of previously awarded contracts, and client feedback. Given this is a $3 million contract with a significant duration, it suggests the contractor possesses a certain level of experience and capability. However, without further data, it's difficult to definitively assess their reliability, efficiency, and history of delivering projects on time and within budget for similar government requirements.

How does this $3.02 million contract fit into the broader context of U.S. Coast Guard infrastructure spending, particularly in the Pacific region?

This $3.02 million contract for air conditioning system modernization at U.S. Coast Guard Base Honolulu represents a specific investment in maintaining and upgrading critical operational infrastructure. The Coast Guard, like other military branches, faces ongoing needs to modernize aging facilities to ensure operational readiness and improve energy efficiency. Spending in the Pacific region can be particularly significant due to the strategic importance and unique environmental conditions (e.g., climate, remoteness). Contracts for facility maintenance, repairs, and upgrades are a consistent part of the Coast Guard's budget. This particular award highlights a focus on essential life-support systems within a key installation, contributing to the overall goal of ensuring the service's assets are functional and sustainable in a demanding operational environment.

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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 94-058 LEOKANE ST, WAIPAHU, HI, 96797

Business Categories: Asian Pacific American Owned Business, Category Business, Limited Liability Corporation, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $3,018,435

Exercised Options: $3,018,435

Current Obligation: $3,018,435

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 70Z08618DPHV01400

IDV Type: IDC

Timeline