Smithsonian Institution awards $32.8M contract for HVAC services to Hilo Air A/C Refrigeration LLC

Contract Overview

Contract Amount: $32,878 ($32.9K)

Contractor: Hilo AIR A/C Refrigeration LLC

Awarding Agency: Smithsonian Institution

Start Date: 2025-12-05

End Date: 2026-04-29

Contract Duration: 145 days

Daily Burn Rate: $227/day

Competition Type: NOT COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: .

Place of Performance

Location: HILO, HAWAII County, HAWAII, 96720

State: Hawaii Government Spending

Plain-Language Summary

Smithsonian Institution obligated $32,877.5 to HILO AIR A/C REFRIGERATION LLC for work described as: . Key points: 1. Contract awarded on a firm-fixed-price basis, indicating clear cost expectations. 2. Limited competition due to the 'Not Competed Under SAP' designation. 3. Performance period spans over one year, suggesting a need for sustained service. 4. The contractor, Hilo Air A/C Refrigeration LLC, is based in Hawaii. 5. This purchase order represents a significant investment in facility maintenance for the Smithsonian.

Value Assessment

Rating: fair

The contract value of $32.8 million for HVAC services over approximately 145 days appears high when considering the duration. Without specific details on the scope of work, it's difficult to benchmark against similar contracts. However, the firm-fixed-price structure suggests the government has defined the scope and expects to pay a set amount, which can be beneficial for budget certainty. Further analysis would require understanding the specific services rendered and the facilities covered.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was not competed under the simplified acquisition procedures (SAP), indicating it was likely awarded through a sole-source or limited competition process. The data suggests a single offer was received or considered. This limited competition may have resulted in a higher price than if a broader competition had been pursued, as the contractor faced less pressure to offer the most competitive bid.

Taxpayer Impact: Taxpayers may not have received the best possible value due to the lack of robust competition, potentially leading to overpayment for the services rendered.

Public Impact

The Smithsonian Institution benefits from the maintenance of its critical HVAC systems, ensuring operational continuity. Services delivered include plumbing, heating, and air-conditioning, essential for preserving collections and ensuring visitor comfort. The geographic impact is primarily within Hawaii, where the contractor is located. Workforce implications are likely for the contractor's employees in Hawaii.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition raises concerns about potential overpricing and lack of value for taxpayer money.
The high dollar amount for a relatively short performance period warrants scrutiny of the scope of work.
Lack of transparency in the procurement process due to 'Not Competed Under SAP' designation.

Positive Signals

Firm-fixed-price contract provides budget certainty for the Smithsonian Institution.
The contractor is established in Hawaii, potentially supporting local employment.

Sector Analysis

The HVAC services sector is critical for maintaining operational environments in government facilities, including museums and research institutions like the Smithsonian. This contract falls within the broader construction and facilities maintenance industry. Spending in this sector is often driven by the need to preserve sensitive collections, ensure occupant comfort, and maintain energy efficiency. Comparable spending benchmarks would typically involve analyzing other large federal agencies' contracts for similar HVAC maintenance and repair services.

Small Business Impact

This contract does not appear to have a small business set-aside. There is no indication of subcontracting requirements for small businesses. The award to Hilo Air A/C Refrigeration LLC, while potentially a small business itself, does not reflect a strategic effort to utilize small businesses through set-asides for this specific contract.

Oversight & Accountability

Oversight for this contract would primarily fall under the Smithsonian Institution's internal procurement and financial management systems. As a federal agency, it is subject to oversight from the Government Accountability Office (GAO) and potentially the Smithsonian's Office of Inspector General. Transparency could be enhanced by making the justification for limited competition publicly available.

Related Government Programs

Smithsonian Institution Facilities Maintenance
Federal HVAC Services Contracts
Government Purchase Orders
Plumbing, Heating, and Air-Conditioning Contractors

Risk Flags

Limited Competition
High Contract Value for Duration
Lack of Publicly Available Justification for Sole Source

Frequently Asked Questions

What is this federal contract paying for?

Smithsonian Institution awarded $32,877.5 to HILO AIR A/C REFRIGERATION LLC. .

Who is the contractor on this award?

The obligated recipient is HILO AIR A/C REFRIGERATION LLC.

Which agency awarded this contract?

Awarding agency: Smithsonian Institution (Smithsonian Institution).

What is the total obligated amount?

The obligated amount is $32,877.5.

What is the period of performance?

Start: 2025-12-05. End: 2026-04-29.

What is the specific scope of work covered by this $32.8 million contract, and how does it justify the cost over the 145-day period?

The provided data indicates the contract is for 'Plumbing, Heating, and Air-Conditioning Contractors' (NAICS 238220) awarded to HILO AIR A/C REFRIGERATION LLC by the Smithsonian Institution. The contract value is $32.8 million with an estimated completion date of April 29, 2026, and a start date of December 5, 2025, resulting in a performance period of approximately 145 days. Given the significant dollar amount for this duration, the scope of work likely involves extensive repairs, upgrades, or installation of complex HVAC systems across multiple Smithsonian facilities in Hawaii. Without a detailed statement of work, it is impossible to definitively justify the cost. However, such high values can be associated with large-scale infrastructure projects, emergency repairs to critical systems, or the replacement of aging, energy-inefficient equipment across a significant portfolio of buildings. Further details on the specific assets being serviced and the nature of the work (e.g., new installations vs. routine maintenance) are needed for a comprehensive cost-benefit analysis.

How does the pricing of this contract compare to similar HVAC services procured by the federal government?

Benchmarking this $32.8 million contract for HVAC services is challenging without detailed information on the specific scope of work, location, and duration. However, the contract's value, especially considering its 145-day performance period, appears substantial. Federal procurement data often shows a wide range for HVAC services, from small maintenance contracts in the thousands to large-scale system replacements in the millions. The fact that this contract was 'NOT COMPETED UNDER SAP' suggests limited competition, which can often lead to prices above market rates. To perform a true comparison, one would need to identify contracts with similar service requirements (e.g., large facility maintenance, system upgrades) awarded to similarly sized contractors in comparable geographic regions. Without such granular data, it's difficult to definitively state if this contract represents good or poor value from a pricing perspective, but the limited competition is a red flag.

What are the potential risks associated with awarding a contract of this magnitude with limited competition?

Awarding a contract of $32.8 million with limited competition, as indicated by 'NOT COMPETED UNDER SAP,' presents several risks. Primarily, there is a heightened risk of the government not achieving the best possible value for taxpayer money. Limited competition can reduce the incentive for contractors to offer competitive pricing, potentially leading to inflated costs. Furthermore, it raises concerns about whether the government adequately explored all available sources or if there were justifications for restricting competition that were not fully documented or transparent. This can also limit the government's ability to leverage innovation from a wider pool of potential contractors. From a performance perspective, while the chosen contractor may be capable, the lack of competition means there's less market validation of their ability to deliver at this scale and price point. This situation warrants careful monitoring of contract performance and costs.

What is the track record of HILO AIR A/C REFRIGERATION LLC in performing federal contracts, particularly those of similar size and scope?

The provided data indicates that HILO AIR A/C REFRIGERATION LLC is the contractor for this $32.8 million Smithsonian Institution contract. To assess their track record, a review of their past federal contract performance would be necessary. This would involve searching federal procurement databases (like SAM.gov or FPDS) for previous awards to this entity. Key aspects to examine would include the types of services previously rendered, the contract values, the agencies they have served, and their performance ratings, if available. Understanding their history with firm-fixed-price contracts, large-scale HVAC projects, and performance in government settings is crucial. Without this historical data, it's difficult to gauge their experience and reliability for a contract of this magnitude and nature. A lack of significant federal contracting history could increase the risk associated with this award.

How does this contract align with the Smithsonian Institution's historical spending patterns for facilities maintenance and HVAC services?

Analyzing this $32.8 million contract requires understanding the Smithsonian Institution's typical spending on facilities maintenance and HVAC services. Historical spending data would reveal whether this award is an outlier or consistent with previous investments. Factors to consider include the average contract size for HVAC services, the frequency of large-scale procurements, and the overall budget allocated to facilities management. If the Smithsonian typically awards numerous smaller contracts for HVAC, this single large award might indicate a shift in procurement strategy or a specific, large-scale project. Conversely, if they frequently engage in multi-million dollar contracts for infrastructure, this award might be within the expected range. Examining trends over the past 5-10 years would provide valuable context for assessing the significance and potential implications of this particular contract award.

Industry Classification

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

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

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

Address: 1204 HONU ST, HILO, HI, 96720

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $32,878

Exercised Options: $32,878

Current Obligation: $32,878

Contract Characteristics

Commercial Item: PRODUCTS OR SERVICES PURSUANT TO FAR 12.102(F)

Timeline