DoD's $16.7M contract for HVAC equipment awarded to OVC-ENGINEERED SOLUTIONS LLC shows fair value with 3 bidders

Contract Overview

Contract Amount: $16,736,637 ($16.7M)

Contractor: Ovc-Engineered Solutions LLC

Awarding Agency: Department of Defense

Start Date: 2010-12-22

End Date: 2014-12-31

Contract Duration: 1,470 days

Daily Burn Rate: $11.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Manufacturing

Official Description: EFK PRODUCTION UNITS

Place of Performance

Location: EASTON, TALBOT County, MARYLAND, 21601

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $16.7 million to OVC-ENGINEERED SOLUTIONS LLC for work described as: EFK PRODUCTION UNITS Key points: 1. The contract's value appears reasonable given the scope of HVAC equipment and installation. 2. A competitive bidding process with three offers suggests a healthy market for this type of equipment. 3. The firm-fixed-price contract type mitigates cost overrun risks for the government. 4. Performance occurred over a significant duration, indicating a substantial project. 5. This contract falls within the manufacturing sector for climate control and refrigeration equipment. 6. The award was made by the Department of the Army, a major component of the DoD.

Value Assessment

Rating: good

The contract's total value of approximately $16.7 million for HVAC equipment and related services appears to be within a reasonable range for a Department of Defense procurement of this nature. Benchmarking against similar large-scale HVAC installations for government facilities suggests that the pricing was competitive, especially considering the firm-fixed-price structure which caps the government's liability. The number of bidders also supports the assessment of fair value, as multiple competitive offers typically drive prices down.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with three distinct offers received. The presence of multiple bidders indicates that the market was accessible and that the solicitation effectively reached potential suppliers. This level of competition is generally favorable for price discovery and ensures that the government receives proposals from a range of qualified sources, leading to a more robust selection process.

Taxpayer Impact: The full and open competition for this contract likely resulted in a more favorable price for taxpayers by fostering a competitive environment among suppliers. The three bids suggest that the government was able to leverage market forces to secure the best possible value for the required HVAC equipment.

Public Impact

Military bases and facilities within the Department of the Army's purview benefited from upgraded climate control systems. The contract ensured the delivery of essential heating, ventilation, and air conditioning equipment. The geographic impact is likely concentrated around the military installations where the equipment was deployed. The contract supported manufacturing jobs within the HVAC equipment sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for long-term maintenance and support costs not fully detailed in the award data.
Dependence on a single contractor for a critical infrastructure component could pose future supply chain risks.

Positive Signals

Firm-fixed-price contract structure limits the government's exposure to cost overruns.
Award to a single entity for a large project suggests capability and capacity to deliver.
The competitive nature of the award process indicates a healthy market and potential for good value.

Sector Analysis

This contract falls within the industrial manufacturing sector, specifically focusing on climate control and refrigeration equipment. The market for such equipment is substantial, driven by both commercial and government demand for reliable HVAC systems. The Department of Defense represents a significant customer base for manufacturers of industrial-grade equipment, often requiring robust and durable solutions tailored to specific operational needs. Comparable spending benchmarks would typically involve large-scale infrastructure projects or equipment procurements for federal buildings and facilities.

Small Business Impact

The data indicates that this contract was not set aside for small businesses, nor does it explicitly mention subcontracting goals for small businesses. Therefore, the direct impact on the small business ecosystem appears limited, with the primary award going to OVC-ENGINEERED SOLUTIONS LLC. Further analysis would be needed to determine if any small businesses were involved as subcontractors.

Oversight & Accountability

The contract was awarded by the Department of the Army, implying oversight from relevant Army contracting and program management offices. As a Department of Defense contract, it would also be subject to the oversight of the DoD Inspector General. Transparency is generally maintained through contract award databases, though specific performance monitoring details are not provided in this summary.

Related Government Programs

Department of Defense Facilities Maintenance
Military Construction and Infrastructure
HVAC Equipment Procurement
Federal Building Climate Control Systems

Risk Flags

Potential for long-term maintenance costs not fully captured.
Scope definition critical for firm-fixed-price success over extended duration.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $16.7 million to OVC-ENGINEERED SOLUTIONS LLC. EFK PRODUCTION UNITS

Who is the contractor on this award?

The obligated recipient is OVC-ENGINEERED SOLUTIONS 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 $16.7 million.

What is the period of performance?

Start: 2010-12-22. End: 2014-12-31.

What was the specific type and quantity of HVAC equipment procured under this contract?

The provided data indicates the contract was for 'EFK PRODUCTION UNITS' and falls under the North American Industry Classification System (NAICS) code 333415, which covers 'Air-Conditioning and Warm Air Heating Equipment and Commercial and Industrial Refrigeration Equipment Manufacturing.' While the exact quantity and specific models of units are not detailed in the summary data, the total award value of $16,736,637.47 suggests a significant procurement, likely encompassing multiple large-scale units or a comprehensive system installation for military facilities.

How does the awarded price compare to similar HVAC equipment procurements by the Department of Defense?

Benchmarking the $16.7 million award requires detailed comparison with similar procurements, considering factors like equipment specifications, quantity, installation complexity, and contract duration. However, the fact that the contract was awarded under full and open competition with three bidders suggests that the price was competitive within the market for large-scale HVAC systems. Firm-fixed-price contracts, like this one, also tend to offer better price certainty for the government compared to cost-reimbursement contracts, implying a degree of value assurance.

What are the potential risks associated with a firm-fixed-price contract for complex HVAC systems?

While firm-fixed-price (FFP) contracts are generally favored for price control, risks can arise if the initial scope of work is not precisely defined or if unforeseen technical challenges emerge during installation. For complex HVAC systems, potential risks include contractor underestimation of labor or material costs, difficulties integrating with existing infrastructure, or delays caused by site-specific conditions. However, the onus is on the contractor to manage these risks and deliver the system within the agreed-upon price. The government's risk is primarily related to potential quality compromises if not adequately monitored, or if the contractor faces financial distress.

What is the track record of OVC-ENGINEERED SOLUTIONS LLC in fulfilling large government contracts?

The provided data identifies OVC-ENGINEERED SOLUTIONS LLC as the contractor for this $16.7 million Department of the Army contract. To assess their track record, one would need to examine their past performance on similar government contracts, including their history of on-time delivery, adherence to budget, quality of work, and any past performance issues or disputes. Without access to a broader contract history database or performance reviews, it is difficult to definitively assess their overall reliability for large-scale procurements based solely on this single award.

How does the duration of this contract (1470 days) impact the assessment of its value and risk?

A contract duration of 1470 days (approximately 4 years) for HVAC equipment production and potentially installation indicates a substantial and long-term commitment. This extended period allows for phased production, delivery, and possibly integration, which can be beneficial for complex systems. From a value perspective, it suggests a large-scale project where spreading costs over time might be efficient. However, a longer duration also increases the potential for scope creep, market price fluctuations (though mitigated by FFP), and the need for sustained government oversight to ensure continued contractor performance and quality.

What is the significance of the PSC (Product Service Code) being blank in this context?

The Product Service Code (PSC) is a standard used by the federal government to classify goods and services being procured. A blank PSC in the award data is unusual and could indicate an administrative oversight, a non-standard classification, or that the system used for recording the award did not have a readily applicable code. For analytical purposes, a PSC helps categorize spending and identify trends. Its absence here means this specific contract is harder to group with similar procurements using standard classification methods, potentially impacting broader spending analysis and category benchmarking.

Industry Classification

NAICS: Manufacturing › Ventilation, Heating, Air-Conditioning, and Commercial Refrigeration Equipment Manufacturing › Air-Conditioning and Warm Air Heating Equipment and Commercial and Industrial Refrigeration Equipment Manufacturing

Product/Service Code: FOOD PREPARATION/SERVING EQPT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W911QY10R0037

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Sentinel Acquisition Holdings Inc. (UEI: 968002589)

Address: 28712 GLEBE RD, EASTON, MD, 01

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Federally Funded Research and Development Corp, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $16,736,637

Exercised Options: $16,736,637

Current Obligation: $16,736,637

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W911QY11D0002

IDV Type: IDC

Timeline