Justice Department awards $12,650 contract for chiller inspection, raising questions about competition and value

Contract Overview

Contract Amount: $12,650 ($12.7K)

Contractor: Mesa Energy Systems, Inc

Awarding Agency: Department of Justice

Start Date: 2026-04-09

End Date: 2026-06-30

Contract Duration: 82 days

Daily Burn Rate: $154/day

Competition Type: NOT COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: CHILLER #1 ANNUAL INSPECTION

Place of Performance

Location: HERLONG, LASSEN County, CALIFORNIA, 96113

State: California Government Spending

Plain-Language Summary

Department of Justice obligated $12,650 to MESA ENERGY SYSTEMS, INC for work described as: CHILLER #1 ANNUAL INSPECTION Key points: 1. Contract awarded without competition, potentially limiting price discovery and value for money. 2. Limited competition raises concerns about whether the government secured the best possible price. 3. The contract duration is relatively short, suggesting a focus on immediate operational needs. 4. The service falls under essential facility maintenance, critical for operational continuity. 5. The award mechanism as a purchase order indicates a streamlined procurement process. 6. The fixed-price contract type shifts risk to the contractor for cost overruns.

Value Assessment

Rating: questionable

The contract value of $12,650 for an annual chiller inspection appears reasonable on its face for a single unit. However, without competitive bidding, it is difficult to benchmark against market rates or determine if this represents excellent value. The lack of competition means there's no direct comparison to other offers. The fixed-price nature is standard for such services, but the overall value proposition is obscured by the procurement method.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed under the Simplified Acquisition Procedures (SAP), indicating it was likely procured through a sole-source or limited competition justification. The absence of a competitive process means multiple vendors were not solicited, and the government did not benefit from a range of proposals to choose from. This approach can be justified for specific circumstances, but it bypasses the standard mechanisms for ensuring the most advantageous offer.

Taxpayer Impact: Taxpayers may not have received the most cost-effective service due to the lack of competitive pressure to drive down prices.

Public Impact

The Federal Prison System benefits from the continued operational status of its chiller systems. Essential maintenance services ensure the proper functioning of climate control within federal correctional facilities. The contract's geographic impact is limited to the facility where the chiller is located in California. The contract supports specialized labor in the HVAC and facility maintenance sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Sole-source award limits transparency in pricing and service selection.
Potential for contractor lock-in if this becomes a recurring sole-source award.

Positive Signals

Contract ensures critical infrastructure maintenance, supporting facility operations.
Fixed-price contract provides cost certainty for this specific service.
Awarded to a company with experience in plumbing, heating, and air-conditioning contracting.

Sector Analysis

The contract falls within the broader construction and facilities maintenance sector, specifically focusing on HVAC services. This sector is characterized by a mix of large corporations and numerous small to medium-sized businesses. Government spending on facility maintenance is substantial and ongoing, supporting the operational readiness of federal installations. Benchmarking this specific chiller inspection cost is challenging without competitive data, but annual maintenance contracts for HVAC systems are common across federal agencies.

Small Business Impact

The award was not a small business set-aside, and there is no indication of subcontracting opportunities for small businesses in the provided data. The contractor, MESA ENERGY SYSTEMS, INC, is not explicitly identified as a small business in this context. The lack of set-aside or subcontracting requirements means this contract does not directly contribute to the government's small business goals.

Oversight & Accountability

Oversight for this contract would typically fall under the Federal Prison System's contracting and facility management divisions. As a purchase order, it is subject to internal agency review and audit processes. Transparency is limited due to the non-competitive nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Federal Prison System Facility Maintenance Contracts
HVAC Services for Federal Buildings
General Services Administration (GSA) Building Operations Support

Risk Flags

Lack of Competition
Potential for Overpricing
Limited Transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Justice awarded $12,650 to MESA ENERGY SYSTEMS, INC. CHILLER #1 ANNUAL INSPECTION

Who is the contractor on this award?

The obligated recipient is MESA ENERGY SYSTEMS, INC.

Which agency awarded this contract?

Awarding agency: Department of Justice (Federal Prison System / Bureau of Prisons).

What is the total obligated amount?

The obligated amount is $12,650.

What is the period of performance?

Start: 2026-04-09. End: 2026-06-30.

What is the track record of MESA ENERGY SYSTEMS, INC. with federal contracts?

Information regarding MESA ENERGY SYSTEMS, INC.'s specific track record with federal contracts is not detailed in the provided data. However, the North American Industry Classification System (NAICS) code 238220 indicates they operate within the Plumbing, Heating, and Air-Conditioning Contractors industry. To assess their track record thoroughly, one would need to examine their past performance on similar federal contracts, including on-time delivery, quality of work, and any past performance issues or awards. A deeper dive into contract databases like SAM.gov or FPDS would be necessary to ascertain their history and reliability as a federal contractor.

How does the $12,650 cost compare to similar chiller inspection contracts?

Benchmarking the $12,650 cost for this annual chiller inspection is challenging without competitive data. The contract was awarded as 'NOT COMPETED UNDER SAP,' suggesting a sole-source or limited competition procurement. Typically, competitive bidding allows agencies to secure lower prices through market forces. To compare, one would need to find data on similar chiller inspection contracts awarded competitively by the Federal Prison System or other agencies for comparable equipment and service scope. Factors like geographic location, specific chiller model, and the scope of the inspection (e.g., preventative maintenance vs. emergency repair) significantly influence pricing. Without such comparative data, it's difficult to definitively state if this price represents good or poor value.

What are the primary risks associated with a sole-source award for facility maintenance?

The primary risks associated with a sole-source award for facility maintenance, such as this chiller inspection contract, include potential overpricing, reduced service quality, and a lack of innovation. Without competition, the contractor faces less pressure to offer the most competitive price, potentially leading to higher costs for the government. The absence of multiple bids can also mean the agency doesn't explore the full range of available service providers or innovative solutions. Furthermore, relying on a single source can create vendor lock-in, making it difficult to switch providers in the future even if performance declines or better options emerge. This underscores the importance of robust justifications for sole-source procurements.

How effective is the fixed-price contract type in managing costs for this service?

The Firm Fixed Price (FFP) contract type is generally effective in managing costs for services with well-defined scopes, like an annual chiller inspection. Under an FFP contract, the contractor assumes the risk of cost overruns. This means MESA ENERGY SYSTEMS, INC. is obligated to perform the work for the agreed-upon $12,650, regardless of their actual costs. This provides cost certainty for the Federal Prison System. However, the effectiveness in achieving the *best* price is diminished if the contract is not competitively awarded, as the fixed price might be set higher than it would be under competitive pressure. The FFP structure is beneficial for budget predictability but does not inherently guarantee cost savings without competition.

What is the historical spending pattern for chiller maintenance at the Federal Prison System?

The provided data only details a single contract award for a chiller inspection. To understand historical spending patterns for chiller maintenance at the Federal Prison System, a comprehensive analysis of past contracts would be required. This would involve querying databases like FPDS or SAM.gov for all contracts related to chiller maintenance, HVAC services, and facility upkeep awarded by the Bureau of Prisons over several fiscal years. Key metrics to examine would include the total annual spending on such services, the number of contracts awarded, the average contract value, the prevalence of competitive versus sole-source awards, and the primary contractors receiving these awards. This analysis would reveal trends, identify potential areas for cost savings, and highlight reliance on specific vendors or procurement methods.

Industry Classification

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

Product/Service Code: REFRIG, AIR CONDIT/CIRCULAT EQPT

Competition & Pricing

Extent Competed: NOT COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Miller Electric Company

Address: 2 CROMWELL, IRVINE, CA, 92618

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

Financial Breakdown

Contract Ceiling: $12,650

Exercised Options: $12,650

Current Obligation: $12,650

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline