VA Awards $15M Spinal Cord Renovation Contract to KLK Electric, Inc. for New Jersey Facility

Contract Overview

Contract Amount: $15,014,745 ($15.0M)

Contractor: KLK Electric, Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2024-05-23

End Date: 2026-07-20

Contract Duration: 788 days

Daily Burn Rate: $19.1K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 7

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: SPINAL CORD RENOVATION

Place of Performance

Location: LYONS, SOMERSET County, NEW JERSEY, 07939

State: New Jersey Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $15.0 million to KLK ELECTRIC, INC for work described as: SPINAL CORD RENOVATION Key points: 1. Contract awarded for building construction services, specifically spinal cord renovation. 2. KLK Electric, Inc. secured the contract valued at $15,014,745.13. 3. The contract falls under the Commercial and Institutional Building Construction sector. 4. Competition method was 'Full and Open Competition After Exclusion of Sources', indicating a specific reason for excluding certain sources. 5. The contract duration is 788 days, ending July 20, 2026.

Value Assessment

Rating: fair

The contract value of $15 million for building construction appears within a reasonable range for a project of this scope. However, without specific details on the renovation scope, a precise pricing assessment against similar contracts is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition After Exclusion of Sources'. This suggests that while the competition was open, certain sources were intentionally excluded, potentially impacting the breadth of price discovery and the final negotiated price.

Taxpayer Impact: Taxpayer funds are being utilized for this renovation project. The effectiveness of the competition method in securing the best value for taxpayers is a key consideration.

Public Impact

Veterans in New Jersey will benefit from improved facilities designed for spinal cord renovation. The project supports the Department of Veterans Affairs' mission to provide quality healthcare infrastructure. Local economic impact through construction jobs and material sourcing in New Jersey is expected.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Competition method 'Full and Open Competition After Exclusion of Sources' warrants further investigation into the rationale for exclusion.
Lack of detailed scope of work makes it challenging to benchmark pricing effectively.
Contract awarded to a single entity, KLK Electric, Inc., limiting immediate comparative pricing insights.

Positive Signals

Contract awarded by the Department of Veterans Affairs, indicating a focus on veteran services.
Project aims to improve critical healthcare infrastructure.
Definitive contract type suggests a clear scope and expected delivery.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector. Spending benchmarks for similar renovation projects can vary widely based on location, complexity, and specific building codes. The $15 million award suggests a significant undertaking.

Small Business Impact

The data does not indicate whether small businesses were involved in this contract, either as prime contractors or subcontractors. Further analysis would be needed to determine the extent of small business participation.

Oversight & Accountability

The Department of Veterans Affairs is responsible for overseeing this contract. Accountability will be measured by the timely completion of the renovation, adherence to quality standards, and effective use of taxpayer funds.

Related Government Programs

Commercial and Institutional Building Construction
Department of Veterans Affairs Contracting
Department of Veterans Affairs Programs

Risk Flags

Potential for limited competition due to source exclusion.
Lack of detailed scope hinders precise value assessment.
Contract duration is substantial, increasing risk of cost overruns or delays.
No indication of small business participation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $15.0 million to KLK ELECTRIC, INC. SPINAL CORD RENOVATION

Who is the contractor on this award?

The obligated recipient is KLK ELECTRIC, INC.

Which agency awarded this contract?

Awarding agency: Department of Veterans Affairs (Department of Veterans Affairs).

What is the total obligated amount?

The obligated amount is $15.0 million.

What is the period of performance?

Start: 2024-05-23. End: 2026-07-20.

What specific factors led to the exclusion of certain sources in the 'Full and Open Competition After Exclusion of Sources' method, and how did this impact the final price?

The exclusion of sources typically occurs due to specific technical requirements, past performance issues, or unique capabilities needed for the project. Understanding these factors is crucial to assessing whether the chosen method maximized competition and secured the best value. If the exclusion was overly broad or not well-justified, it could have limited price discovery and potentially led to a higher cost for taxpayers.

How does the $15 million contract value compare to industry benchmarks for similar spinal cord renovation projects, considering the location and scope?

Benchmarking this $15 million contract requires detailed project specifications, including square footage, complexity of renovation, materials used, and specific medical equipment integration. Without this granular data, a direct comparison is difficult. However, for significant institutional building renovations, this value is plausible, but a thorough review against comparable projects in New Jersey would be necessary to confirm cost-effectiveness.

What are the key performance indicators (KPIs) for this contract, and how will the VA measure the effectiveness of the spinal cord renovation in meeting its objectives?

Effective measurement would likely involve KPIs related to construction timelines, budget adherence, quality of workmanship, and compliance with all relevant building and healthcare codes. Post-renovation, effectiveness would be gauged by the facility's ability to support its intended medical functions, patient comfort, and operational efficiency for healthcare providers. The VA's oversight process should clearly define these metrics.

Industry Classification

NAICS: Construction › Nonresidential Building Construction › Commercial and Institutional Building Construction

Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCTION OF BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SEALED BID

Solicitation ID: 36C24223B0042

Offers Received: 7

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: KLK Electric Inc

Address: 5809 28TH AVE, WOODSIDE, NY, 11377

Business Categories: 8(a) Program Participant, Category Business, Corporate Entity Not Tax Exempt, DoT Certified Disadvantaged Business Enterprise, Minority Owned Business, Small Business, Special Designations, Subchapter S Corporation, Indian (Subcontinent) American Owned Business, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $15,014,745

Exercised Options: $15,014,745

Current Obligation: $15,014,745

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline