State Department awards $18.75M for HVAC equipment, raising questions on competition and value

Contract Overview

Contract Amount: $18,751 ($18.8K)

Contractor: Multistack LLC

Awarding Agency: Department of State

Start Date: 2024-03-14

End Date: 2024-07-31

Contract Duration: 139 days

Daily Burn Rate: $135/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: ISB-ST-WH-FAC-MASTER CONTROLER-HVAC-OFFSHORE

Place of Performance

Location: SPARTA, MONROE County, WISCONSIN, 54656

State: Wisconsin Government Spending

Plain-Language Summary

Department of State obligated $18,750.5 to MULTISTACK LLC for work described as: ISB-ST-WH-FAC-MASTER CONTROLER-HVAC-OFFSHORE Key points: 1. The contract was awarded on a non-competitive basis, limiting price discovery. 2. The firm-fixed-price contract type suggests cost certainty for the government. 3. The duration of 139 days is relatively short for a large equipment purchase. 4. The specific equipment category is 'Air-Conditioning and Warm Air Heating Equipment and Commercial and Industrial Refrigeration Equipment Manufacturing'. 5. The award was made as a Purchase Order, often used for simpler acquisitions. 6. The contractor, MULTISTACK LLC, is the sole provider for this specific award.

Value Assessment

Rating: questionable

Benchmarking the value for this specific HVAC equipment purchase is challenging without more detailed specifications and market comparisons. The award amount of $18.75 million for a 139-day period suggests a significant investment. However, the lack of competition means there's no direct market validation of whether this price represents good value for money. Further analysis would require comparing the unit costs and specifications against similar large-scale HVAC procurements by other federal agencies or large commercial entities.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor can provide the required goods or services, or in emergency situations. The lack of competition means that potential cost savings that could arise from a competitive bidding process were not realized. It is unclear from the provided data why a sole-source award was deemed necessary for this HVAC equipment.

Taxpayer Impact: Sole-source awards can lead to higher prices for taxpayers as there is no competitive pressure to drive down costs. This limits the government's ability to secure the best possible price.

Public Impact

The Department of State is the primary beneficiary, receiving critical HVAC equipment. The services delivered involve the provision of specialized air-conditioning and heating equipment. The geographic impact is likely focused on facilities managed by the Department of State, potentially overseas or within the US. Workforce implications are minimal for the government, but the contractor will utilize its workforce for manufacturing and delivery.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in a higher price than a competed award.
Limited transparency into the justification for a sole-source award.
Potential for overpayment due to absence of market price discovery.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Award is for essential facility maintenance equipment.
Contract is managed by the Department of State, a major federal agency.

Sector Analysis

The market for commercial and industrial HVAC equipment is substantial, with numerous manufacturers and suppliers. This contract falls within the 'Air-Conditioning and Warm Air Heating Equipment and Commercial and Industrial Refrigeration Equipment Manufacturing' sector. While large-scale procurements are common, the specific value of $18.75 million for a single award suggests a significant project, possibly for a major facility upgrade or new construction. Benchmarking would involve looking at similar large-volume orders for industrial-grade HVAC systems.

Small Business Impact

There is no indication that this contract involved small business set-asides or subcontracting opportunities. The award was made directly to MULTISTACK LLC, and the data does not specify if they are a small business or if they are required to engage small businesses for subcontracting. Further investigation would be needed to determine the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of State's contracting and procurement offices. As a Purchase Order, it may be subject to internal review processes. The Inspector General for the Department of State would have jurisdiction to investigate any potential fraud, waste, or abuse related to this award. Transparency is limited by the sole-source nature of the award and the lack of publicly available detailed justification.

Related Government Programs

General Services Administration (GSA) Schedules
Department of Defense (DoD) Facilities Maintenance Contracts
Energy Efficiency and Conservation Block Grant Program

Risk Flags

Sole-source award lacks competitive justification.
Potential for inflated pricing due to lack of competition.
Limited transparency regarding specific equipment and justification.

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $18,750.5 to MULTISTACK LLC. ISB-ST-WH-FAC-MASTER CONTROLER-HVAC-OFFSHORE

Who is the contractor on this award?

The obligated recipient is MULTISTACK LLC.

Which agency awarded this contract?

Awarding agency: Department of State (Department of State).

What is the total obligated amount?

The obligated amount is $18,750.5.

What is the period of performance?

Start: 2024-03-14. End: 2024-07-31.

What is the specific justification for awarding this contract on a sole-source basis?

The provided data indicates the contract was awarded as 'NOT COMPETED' and is a 'SOLE SOURCE'. However, the specific justification for this sole-source determination is not detailed in the data. Typically, sole-source awards are made when only one responsible source can provide the required supplies or services, or in cases of urgent and compelling need. Without further documentation from the Department of State, it is impossible to ascertain the precise reason. This lack of transparency raises concerns about whether competition was genuinely not feasible or if it was simply bypassed.

How does the unit cost of the HVAC equipment compare to market rates for similar products?

The data provides a total award amount of $18.75 million for HVAC equipment over 139 days, but it does not break down the cost by individual units or provide specific equipment models. Therefore, a direct unit cost comparison to market rates is not possible with the information given. To perform such an analysis, one would need the Bill of Materials, specific product specifications, and quantities. Benchmarking would then involve researching prices for comparable industrial-grade HVAC systems from other manufacturers and checking against GSA schedules or large commercial procurement databases.

What is the track record of MULTISTACK LLC in fulfilling federal contracts, particularly for the Department of State?

The provided data identifies MULTISTACK LLC as the contractor for this specific award. However, it does not offer details on their past performance, contract history with the Department of State, or overall track record with federal agencies. A comprehensive assessment of their reliability and past performance would require accessing contract databases like FPDS or SAM.gov to review previous awards, performance evaluations, and any reported issues or disputes. Without this historical data, it's difficult to gauge their suitability and past success.

What are the potential risks associated with a sole-source award for critical HVAC equipment?

The primary risk associated with a sole-source award for critical HVAC equipment is the potential for paying a premium price due to the absence of competitive bidding. This can lead to a suboptimal use of taxpayer funds. Additionally, reliance on a single supplier might create vulnerabilities in the supply chain if that supplier faces production issues or goes out of business. There's also a reduced incentive for the sole-source provider to innovate or offer superior service compared to a competitive environment. Ensuring the necessity and justification for the sole-source award is crucial to mitigate these risks.

How does this award compare to historical spending by the Department of State on HVAC equipment?

The provided data shows a single award of $18.75 million for HVAC equipment. To compare this to historical spending, one would need to analyze past Department of State contracts for similar equipment over several fiscal years. This would involve querying databases for keywords like 'HVAC', 'air conditioning', 'heating equipment', and filtering by the Department of State as the awarding agency. Understanding the volume, value, and type of HVAC equipment procured historically would provide context on whether this $18.75 million award represents an increase, decrease, or is in line with previous spending patterns.

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: REFRIG, AIR CONDIT/CIRCULAT EQPT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Multistack, LLC

Address: 1065 MAPLE AVE, SPARTA, WI, 54656

Business Categories: Category Business, Foreign Owned, Manufacturer of Goods, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations

Financial Breakdown

Contract Ceiling: $18,751

Exercised Options: $18,751

Current Obligation: $18,751

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Timeline