VA awards $122M generator maintenance contract to Southern Power Systems Services Inc. for 5 years

Contract Overview

Contract Amount: $122,455 ($122.5K)

Contractor: Southern Power Systems Services Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2022-05-01

End Date: 2027-04-30

Contract Duration: 1,825 days

Daily Burn Rate: $67/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: GENERATOR MAINTENANCE

Place of Performance

Location: DECATUR, DEKALB County, GEORGIA, 30033

State: Georgia Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $122,455 to SOUTHERN POWER SYSTEMS SERVICES INC for work described as: GENERATOR MAINTENANCE Key points: 1. Contract value of $122.46 million over five years suggests a significant investment in critical infrastructure. 2. The contract was awarded under full and open competition, indicating a potentially competitive bidding process. 3. The firm-fixed-price structure aims to control costs and provide predictability for the agency. 4. The duration of 1825 days (5 years) allows for long-term planning and consistent service delivery. 5. The contract is for generator maintenance, a crucial service for ensuring operational continuity in VA facilities. 6. The award to a single contractor, Southern Power Systems Services Inc., warrants scrutiny for potential performance and pricing. 7. The absence of small business set-aside flags suggests the primary contractor is not a small business, and subcontracting opportunities may be limited.

Value Assessment

Rating: fair

The contract value of $122.46 million over five years for generator maintenance appears substantial. Without specific benchmarks for similar VA facilities or national averages for generator maintenance services, a precise value-for-money assessment is challenging. However, the firm-fixed-price contract type suggests an effort to cap costs. Further analysis would require comparing the per-hour or per-unit maintenance costs to industry standards and the scope of services provided.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'FULL AND OPEN COMPETITION,' indicating that all responsible sources were permitted to submit a bid. The data shows 2 offers were received. A higher number of bidders typically suggests more robust competition, which can lead to better pricing and service options for the government. The fact that only two offers were submitted warrants further investigation into potential barriers to entry or market concentration.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it encourages a wider range of providers to compete, potentially driving down prices and improving service quality. However, with only two offers, the competitive pressure might have been less intense than in a scenario with numerous bidders.

Public Impact

Veterans and VA staff benefit from reliable power supply, ensuring continuity of care and operations at VA facilities. Essential services such as healthcare delivery are supported by the guaranteed functionality of backup power systems. The contract impacts the state of Georgia (GA), where the services are likely to be performed. The contract supports the operational readiness of VA medical centers and other facilities within its jurisdiction.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition with only two offers received could indicate potential market limitations or barriers to entry.
The substantial contract value over five years necessitates close monitoring of performance and cost-effectiveness.
Lack of specific details on the scope of maintenance services makes it difficult to benchmark against industry standards.
The absence of small business participation requirements may limit opportunities for smaller firms in this sector.

Positive Signals

The firm-fixed-price contract type provides cost certainty for the Department of Veterans Affairs.
Awarding under full and open competition theoretically allows for the best value to be selected from a broad pool of potential contractors.
The five-year duration allows for consistent and predictable maintenance, crucial for critical infrastructure.
The contract addresses a vital need for generator maintenance, ensuring operational resilience.

Sector Analysis

The generator maintenance sector is critical for ensuring the operational continuity of essential services, particularly in government facilities. This contract falls within the broader facilities maintenance and support services industry. The market for such services is often characterized by a mix of large, established players and smaller, specialized firms. Benchmarking this contract's value would require comparing it to similar long-term maintenance agreements for critical power systems in other federal agencies or large private sector organizations.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This suggests that the primary award went to a non-small business entity. Consequently, there may be limited direct subcontracting opportunities for small businesses unless the prime contractor voluntarily includes them in their supply chain. The impact on the small business ecosystem is likely minimal unless specific subcontracting goals are mandated and met.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Veterans Affairs' contracting and program management offices. Accountability measures are typically embedded within the contract's performance standards and reporting requirements. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse related to the contract is suspected.

Related Government Programs

VA Facilities Maintenance Contracts
Federal Generator Maintenance Services
Critical Infrastructure Support Contracts
Department of Veterans Affairs Operations

Risk Flags

Limited competition (2 offers)
Potential for contractor complacency over a 5-year term
Need for robust performance monitoring
Lack of explicit small business subcontracting requirements

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $122,455 to SOUTHERN POWER SYSTEMS SERVICES INC. GENERATOR MAINTENANCE

Who is the contractor on this award?

The obligated recipient is SOUTHERN POWER SYSTEMS SERVICES 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 $122,455.

What is the period of performance?

Start: 2022-05-01. End: 2027-04-30.

What is the track record of Southern Power Systems Services Inc. in performing similar generator maintenance contracts for the federal government?

A review of federal procurement data would be necessary to assess Southern Power Systems Services Inc.'s track record. Key metrics to examine would include past performance evaluations on similar contracts, any history of contract disputes or terminations, and the value and duration of previous generator maintenance awards. Understanding their experience with VA facilities specifically, or with generators of comparable size and complexity, would provide crucial context for evaluating their capability to fulfill this new $122 million contract effectively over the next five years.

How does the awarded price compare to market rates for similar generator maintenance services?

To benchmark the value, we would need to compare the contract's estimated annual cost or per-unit maintenance costs against industry data for similar generator maintenance services. This would involve researching average hourly rates, preventative maintenance package costs, and emergency service fees charged by other providers in the Georgia region and nationally. Factors such as the type, age, and capacity of the generators, as well as the scope of services (e.g., routine checks, emergency repairs, parts replacement), would need to be standardized for a fair comparison. Without this granular data, it's difficult to definitively state if the $122 million award represents excellent or questionable value.

What are the specific performance metrics and service level agreements (SLAs) included in this contract?

The contract likely includes specific performance metrics and Service Level Agreements (SLAs) designed to ensure the reliability and responsiveness of Southern Power Systems Services Inc. These would typically cover aspects such as response times for emergency service calls, uptime guarantees for the generators, completion rates for scheduled preventative maintenance, and quality standards for repairs. The effectiveness of the VA's oversight will depend on how rigorously these metrics are monitored and enforced, and what penalties or incentives are tied to performance outcomes.

What is the historical spending pattern for generator maintenance at this specific VA facility or within the VA system?

Analyzing historical spending on generator maintenance for the relevant VA facility or the VA system overall would provide context for the $122 million award. This involves examining past contract values, durations, and the number of competitors over several fiscal years. Significant increases or decreases in spending, or a shift towards longer-term contracts like this one, could indicate changes in agency strategy, infrastructure needs, or market dynamics. Understanding this history helps assess whether the current award is consistent with past practices or represents a new approach.

What are the potential risks associated with a single contractor performing generator maintenance for five years?

The primary risks associated with a single contractor holding a five-year generator maintenance contract include potential complacency leading to decreased service quality, price escalation in future modifications, and a lack of flexibility if the VA's needs change significantly. Over-reliance on one provider can also reduce the agency's leverage in negotiations. Mitigating these risks requires robust contract management, regular performance reviews, and clear mechanisms for addressing issues or disputes that may arise during the contract term.

How does the 'firm fixed price' contract type influence risk and cost control for this generator maintenance service?

A Firm Fixed Price (FFP) contract type is generally preferred by the government for services where the scope of work is well-defined, as it shifts the risk of cost overruns to the contractor. For generator maintenance, this means Southern Power Systems Services Inc. is obligated to perform the agreed-upon services for the stated price, regardless of their actual costs. This provides cost certainty for the VA and incentivizes the contractor to manage their expenses efficiently. However, if unforeseen issues arise that significantly increase the contractor's costs, they bear the burden, which could potentially impact their willingness or ability to perform optimally if not managed carefully.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Employment Services › Temporary Help Services

Product/Service Code: QUALITY CONTROL, TEST, INSPECTION › QUALITY CONTROL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 34 HILLWOOD CIR, NEWNAN, GA, 30263

Business Categories: Category Business, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $148,055

Exercised Options: $122,455

Current Obligation: $122,455

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: GS07F9266S

IDV Type: FSS

Timeline