DoD Awards $95.8M Contract for Boiler Replacement and Fuel Tank Upgrade in Utah
Contract Overview
Contract Amount: $95,851,891 ($95.9M)
Contractor: Sgjv, LLC
Awarding Agency: Department of Defense
Start Date: 2023-01-23
End Date: 2027-02-16
Contract Duration: 1,485 days
Daily Burn Rate: $64.5K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 5
Pricing Type: FIRM FIXED PRICE
Sector: Construction
Official Description: REPLACES 8 EXISTING BOILERS IN BLDG 260 WITH NEW DUAL-FUEL BOILERS. EXISTING BOILER FUEL OIL UNDERGROUND STORAGE TANKS (USTS) WILL BE REMOVED AND REPLACED WITH ABOVE GROUND STORAGE TANKS ABLE TO PROVIDE 7 DAYS OF STORAGE DURING PEAK HEATING SEASON
Place of Performance
Location: HILL AFB, DAVIS County, UTAH, 84056
State: Utah Government Spending
Plain-Language Summary
Department of Defense obligated $95.9 million to SGJV, LLC for work described as: REPLACES 8 EXISTING BOILERS IN BLDG 260 WITH NEW DUAL-FUEL BOILERS. EXISTING BOILER FUEL OIL UNDERGROUND STORAGE TANKS (USTS) WILL BE REMOVED AND REPLACED WITH ABOVE GROUND STORAGE TANKS ABLE TO PROVIDE 7 DAYS OF STORAGE DURING PEAK HEATING SEASON Key points: 1. Significant investment in facility infrastructure for the Department of the Army. 2. Competition method suggests potential for price discovery, but exclusion of sources warrants scrutiny. 3. Risk of project delays or cost overruns exists due to the scale and complexity of boiler replacement and tank removal/installation. 4. Construction sector contract focused on essential building systems.
Value Assessment
Rating: fair
The contract value of $95.8 million for replacing eight boilers and associated fuel tanks appears substantial. Benchmarking against similar large-scale HVAC replacement projects in institutional settings is necessary to determine if the pricing is competitive.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicating a limited competition. This method may restrict the pool of eligible bidders and potentially impact price discovery compared to unrestricted full and open competition.
Taxpayer Impact: Taxpayer funds are being used for essential infrastructure upgrades. The effectiveness of the procurement process in securing the best value for taxpayer money is a key consideration.
Public Impact
Ensures reliable heating and operational capacity for Building 260. Addresses environmental and safety concerns related to underground fuel storage. Modernizes critical building systems, potentially leading to long-term energy efficiency improvements. Supports local construction jobs and economic activity in Utah.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition may lead to higher costs.
- Potential for unforeseen issues during UST removal and replacement.
- Long project duration increases exposure to market fluctuations.
Positive Signals
- Addresses critical infrastructure needs.
- Upgrade to dual-fuel boilers offers operational flexibility.
- Replacement of underground tanks with above-ground tanks improves safety and compliance.
Sector Analysis
This contract falls within the Commercial and Institutional Building Construction sector. Spending benchmarks for similar large-scale HVAC and fuel system upgrades in federal facilities are typically in the tens of millions, depending on the scope and complexity.
Small Business Impact
The contract was not awarded to a small business. Analysis should confirm if small business participation was solicited or if subcontracting opportunities were made available.
Oversight & Accountability
The contract's duration and complexity necessitate robust oversight to ensure adherence to schedule, budget, and quality standards. Regular progress reports and site inspections will be crucial for accountability.
Related Government Programs
- Commercial and Institutional Building Construction
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Limited competition raises concerns about potential overpricing.
- Complexity of boiler replacement and tank work increases risk of delays.
- Long contract duration exposes project to economic uncertainties.
- Lack of small business award may indicate missed subcontracting opportunities.
Tags
commercial-and-institutional-building-co, department-of-defense, ut, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $95.9 million to SGJV, LLC. REPLACES 8 EXISTING BOILERS IN BLDG 260 WITH NEW DUAL-FUEL BOILERS. EXISTING BOILER FUEL OIL UNDERGROUND STORAGE TANKS (USTS) WILL BE REMOVED AND REPLACED WITH ABOVE GROUND STORAGE TANKS ABLE TO PROVIDE 7 DAYS OF STORAGE DURING PEAK HEATING SEASON
Who is the contractor on this award?
The obligated recipient is SGJV, LLC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Army).
What is the total obligated amount?
The obligated amount is $95.9 million.
What is the period of performance?
Start: 2023-01-23. End: 2027-02-16.
What is the expected long-term energy efficiency improvement from the new dual-fuel boilers compared to the existing units?
The expected long-term energy efficiency improvement will depend on the specific models of dual-fuel boilers selected and the operational strategy for utilizing different fuel sources. While dual-fuel systems offer flexibility, a detailed analysis of fuel costs and boiler efficiency ratings is needed to quantify potential savings. The transition from older, potentially less efficient units to modern technology is generally expected to yield significant energy savings over the lifespan of the equipment.
What are the specific risks associated with removing underground storage tanks and installing above-ground ones, and how are they being mitigated?
Risks associated with UST removal include potential soil and groundwater contamination, requiring thorough environmental assessments and remediation plans. Installation of ASTs involves structural integrity concerns, spill prevention measures, and compliance with safety regulations. Mitigation strategies likely include engaging specialized environmental contractors, implementing strict safety protocols during removal and installation, and conducting regular inspections to ensure compliance and prevent environmental incidents.
How does the chosen competition method ('FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES') impact the government's ability to secure the best value for this significant infrastructure project?
This procurement method, while allowing for competition, restricts the pool of potential bidders by excluding certain sources. This limitation could potentially reduce the number of competitive offers received, thereby diminishing the government's leverage in price negotiation and potentially leading to a higher overall cost than if unrestricted full and open competition were employed. The justification for excluding sources needs to be robust to ensure best value was still achievable.
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: TWO STEP
Solicitation ID: W9123822R0007
Offers Received: 5
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 2876 GUARDIAN LN, VIRGINIA BEACH, VA, 23452
Business Categories: Asian Pacific American Owned Business, Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Minority Owned Business, Self-Certified Small Disadvantaged Business, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business
Financial Breakdown
Contract Ceiling: $95,851,891
Exercised Options: $95,851,891
Current Obligation: $95,851,891
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2023-01-23
Current End Date: 2027-02-16
Potential End Date: 2027-02-16 00:00:00
Last Modified: 2025-09-16
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