DoD's $14.8M HVAC contract with Johnson Controls, Inc. awarded under full and open competition

Contract Overview

Contract Amount: $14,841,121 ($14.8M)

Contractor: Johnson Controls, Inc.

Awarding Agency: Department of Defense

Start Date: 2006-10-01

End Date: 2010-10-31

Contract Duration: 1,491 days

Daily Burn Rate: $10.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: HVAC MAINTENANCE AND REPAIR SERVICES

Place of Performance

Location: ROCK ISLAND, ROCK ISLAND County, ILLINOIS, 61299

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $14.8 million to JOHNSON CONTROLS, INC. for work described as: HVAC MAINTENANCE AND REPAIR SERVICES Key points: 1. Value for money appears fair given the 4-year duration and firm-fixed-price structure. 2. Competition dynamics indicate a robust bidding process, potentially leading to competitive pricing. 3. Risk indicators are moderate, with a firm-fixed-price contract generally transferring risk to the contractor. 4. Performance context is for essential HVAC maintenance and repair services for the Department of the Army. 5. Sector positioning is within the facilities maintenance and repair services for government entities.

Value Assessment

Rating: fair

The contract's total value of approximately $14.8 million over four years suggests a moderate annual spend. Without specific performance metrics or detailed cost breakdowns, a precise value-for-money assessment is challenging. However, the firm-fixed-price nature of the award implies that the contractor is responsible for cost overruns, which can be a positive indicator for the government. Benchmarking against similar HVAC maintenance contracts for large federal facilities would provide a clearer picture of whether this pricing is competitive.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of 4 bids suggests a reasonable level of competition for these services. A higher number of bidders generally leads to more competitive pricing and a wider selection of qualified contractors. The specific details of the bidding process, such as the evaluation criteria and the number of proposals received, would further illuminate the effectiveness of the competition.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that drives down prices and encourages innovation. This approach ensures that the government receives the best value by considering a broad range of potential contractors.

Public Impact

The Department of Defense benefits from reliable HVAC maintenance, ensuring operational readiness and comfort for personnel. Essential services include the repair and maintenance of heating, ventilation, and air conditioning systems. The geographic impact is primarily within Illinois, where the contract was administered. Workforce implications include the employment of skilled technicians and support staff for HVAC services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price creep if contract scope expands without re-competition.
Dependence on a single contractor for critical infrastructure maintenance.
Ensuring consistent service quality across all deployed units.

Positive Signals

Firm-fixed-price contract structure limits cost uncertainty for the government.
Awarded under full and open competition, suggesting a competitive selection process.
Long-term contract provides stability for essential service delivery.

Sector Analysis

The facilities maintenance and repair sector is a significant component of government spending, encompassing a wide range of services necessary to keep federal buildings and infrastructure operational. This contract for HVAC services falls within the broader category of building operations and maintenance. Comparable spending benchmarks for similar HVAC contracts can vary widely based on the size and complexity of the facilities, as well as the geographic location and prevailing labor costs.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb: false'. There is no explicit information provided regarding subcontracting plans for small businesses. Without this data, it is difficult to assess the direct impact on the small business ecosystem for this specific award. Future analysis could explore if subcontracting opportunities were made available.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the administrative contracting officer within the Department of the Army. Performance monitoring and quality assurance would be key accountability measures. Transparency is facilitated through contract databases like FPDS, which provide basic award details. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Federal Buildings and Facilities Maintenance
Department of Defense Operations and Maintenance
Government HVAC Services
Base Operations Support Contracts

Risk Flags

Contract duration may lead to potential for service quality degradation if not actively managed.
Lack of explicit small business subcontracting goals requires further investigation.
Firm-fixed-price contracts necessitate strong government oversight to ensure performance standards.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.8 million to JOHNSON CONTROLS, INC.. HVAC MAINTENANCE AND REPAIR SERVICES

Who is the contractor on this award?

The obligated recipient is JOHNSON CONTROLS, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $14.8 million.

What is the period of performance?

Start: 2006-10-01. End: 2010-10-31.

What is the historical spending pattern for HVAC maintenance and repair services by the Department of the Army?

Historical spending on HVAC maintenance and repair by the Department of the Army is substantial, reflecting the vast infrastructure managed by the service. While specific figures for HVAC alone are not readily available without deep dives into budget allocations, the Army consistently invests billions annually in facility operations and maintenance. This includes routine upkeep, emergency repairs, and upgrades to HVAC systems across numerous installations worldwide. The trend generally shows sustained or increasing expenditure due to aging infrastructure and the need to maintain operational readiness and environmental controls within facilities. Analyzing past contract awards for similar services can reveal spending trends and identify key contractors and contract vehicles utilized over time.

How does the awarded price compare to market rates for similar HVAC services in Illinois?

Benchmarking the $14.8 million contract value against market rates for similar HVAC services in Illinois requires detailed analysis of the contract's scope of work, service level agreements, and the specific types of equipment covered. General market rates for HVAC maintenance and repair can vary significantly based on factors such as the size and complexity of the facilities, the frequency of service, emergency response requirements, and the prevailing labor costs in the region. Without a granular breakdown of the services provided under this contract (e.g., preventive maintenance schedules, types of repairs, labor hours), a precise comparison is difficult. However, given the scale of a Department of Defense contract, it is likely to encompass a broad range of services across multiple facilities, potentially offering economies of scale. A thorough comparison would involve obtaining quotes from private sector HVAC providers for comparable service packages in the Illinois region.

What is Johnson Controls, Inc.'s track record with federal government contracts, particularly for HVAC services?

Johnson Controls, Inc. has a significant and extensive track record with federal government contracts, including a substantial portfolio of awards for HVAC services and building management systems. As a major player in the facilities management and building technology industry, the company frequently secures contracts across various federal agencies, including the Department of Defense, General Services Administration, and others. Their history often includes large-scale, multi-year agreements for maintenance, repair, and system upgrades. Analyzing their past performance on similar federal contracts would involve reviewing contract databases for on-time delivery, quality of service, and any documented disputes or contract terminations. Generally, their long-standing presence suggests a capacity to meet the demands of government service requirements.

What are the potential risks associated with a 4-year firm-fixed-price contract for HVAC services?

A primary risk associated with a 4-year firm-fixed-price (FFP) contract for HVAC services is the potential for the contractor to cut corners on quality or service to maintain profitability, especially if costs increase unexpectedly during the contract period. While FFP transfers cost overrun risk to the contractor, it places a greater burden on the government to clearly define performance standards and conduct robust oversight to ensure those standards are met. If the scope of work is not precisely defined, or if unforeseen technical issues arise that require extensive, costly repairs beyond the contractor's initial cost estimates, the contractor may face financial strain, potentially impacting service delivery. Additionally, if market prices for parts or labor rise significantly, the contractor might be less motivated to perform extensive repairs, potentially leading to deferred maintenance issues.

How does the number of bidders (4) impact the overall value and competition for this contract?

Having 4 bidders for this HVAC services contract indicates a moderate level of competition. While more bidders generally lead to more competitive pricing and a wider array of technical solutions, 4 bidders suggest that the market for these specific services is not overly saturated but also not a sole-source situation. This number typically allows for meaningful price discovery and selection among qualified entities. The government can likely achieve a reasonable price, but it might not be as aggressively low as it could be with a larger pool of competitors (e.g., 8-10 bidders). The quality of the proposals and the specific evaluation criteria used by the Department of the Army would be crucial in determining if the best value was indeed secured. A lower number of bidders could sometimes indicate barriers to entry or specialized requirements.

Industry Classification

NAICS: Construction › Building Equipment Contractors › Plumbing, Heating, and Air-Conditioning Contractors

Product/Service Code: UTILITIES AND HOUSEKEEPING › HOUSEKEEPING SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W52H0905R5009

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Johnson Controls Inc

Address: 5310A 23RD AVE, MOLINE, IL, 61265

Business Categories: Category Business, Emerging Small Business, Not Designated a Small Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $15,136,590

Exercised Options: $14,865,959

Current Obligation: $14,841,121

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline