VA awards $205,810 for emergency chiller repair, highlighting critical infrastructure needs

Contract Overview

Contract Amount: $20,581 ($20.6K)

Contractor: Daikin Applied Americas Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2025-07-28

End Date: 2025-09-26

Contract Duration: 60 days

Daily Burn Rate: $343/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: EMERGENCY CRITICAL CHILLER 2 COMPRESSOR REPAIR

Place of Performance

Location: MINNEAPOLIS, HENNEPIN County, MINNESOTA, 55441

State: Minnesota Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $20,581 to DAIKIN APPLIED AMERICAS INC for work described as: EMERGENCY CRITICAL CHILLER 2 COMPRESSOR REPAIR Key points: 1. Contract addresses an urgent need for critical infrastructure repair, indicating potential vulnerabilities in existing systems. 2. The fixed-price nature of the contract provides cost certainty for this emergency repair. 3. Competition was full and open, suggesting a potentially competitive bidding process for this specialized service. 4. The award is a delivery order against an existing contract, implying a pre-established relationship or framework. 5. The short duration of the repair period suggests a focused and time-sensitive scope of work.

Value Assessment

Rating: good

The contract value of $205,810 for a critical chiller compressor repair appears reasonable given the emergency nature and specialized equipment involved. Benchmarking against similar emergency repair contracts for large-scale HVAC systems in federal facilities would provide a more precise value assessment. The firm fixed-price structure helps manage cost overruns for this specific repair task.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. This approach is generally expected to yield competitive pricing and a wider selection of qualified contractors. The specific number of bidders is not provided, but the method suggests a robust process.

Taxpayer Impact: Full and open competition is favorable for taxpayers as it typically drives down prices through market forces and ensures the government receives the best value from a broad pool of potential suppliers.

Public Impact

Benefits the Department of Veterans Affairs by ensuring the operational continuity of critical facilities. Services delivered include the repair of a specific chiller compressor, essential for maintaining environmental controls. Geographic impact is localized to the facility in Minnesota where the chiller is located. Workforce implications are minimal, likely involving a small, specialized repair team.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for future emergency repair needs if existing infrastructure is aging.
Reliance on specific original equipment manufacturers for critical parts can lead to higher costs and longer lead times.

Positive Signals

Proactive repair of critical equipment prevents larger, more costly failures.
Use of a delivery order against an existing contract may indicate efficient procurement processes.
Firm fixed-price contract provides budget predictability for this specific repair.

Sector Analysis

This contract falls within the manufacturing sector, specifically related to automatic environmental control systems. The market for specialized HVAC repair services, particularly for large-scale industrial or institutional facilities like those operated by the VA, is often dominated by a few key manufacturers and their authorized service providers. Spending on facility maintenance and repair is a consistent requirement across federal agencies to ensure operational readiness and occupant comfort.

Small Business Impact

The contract data does not indicate any specific small business set-aside or subcontracting requirements. Given the specialized nature of critical chiller repair, it is likely that larger, established firms with specific OEM certifications would be the primary bidders, potentially limiting direct opportunities for small businesses unless they are part of a larger firm's supply chain.

Oversight & Accountability

As a delivery order under an existing contract, oversight would likely be managed by the contracting officer and the agency's facility management personnel responsible for the Minnesota facility. Transparency is provided through federal procurement databases. Specific Inspector General jurisdiction would depend on whether the underlying contract falls under their purview.

Related Government Programs

Federal Building Maintenance Contracts
HVAC System Repair and Maintenance
Emergency Repair Services
Department of Veterans Affairs Facilities Management

Risk Flags

Critical Infrastructure Dependency
Potential for Sole-Source Parts/Service
Emergency Repair Premium

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $20,581 to DAIKIN APPLIED AMERICAS INC. EMERGENCY CRITICAL CHILLER 2 COMPRESSOR REPAIR

Who is the contractor on this award?

The obligated recipient is DAIKIN APPLIED AMERICAS 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 $20,581.

What is the period of performance?

Start: 2025-07-28. End: 2025-09-26.

What is the track record of Daikin Applied Americas Inc. with the Department of Veterans Affairs?

Daikin Applied Americas Inc. has a history of receiving contracts from the Department of Veterans Affairs, as indicated by this delivery order. To fully assess their track record, a review of past awards, performance evaluations, and any reported issues or disputes would be necessary. Analyzing the volume and type of previous contracts can reveal the extent of their engagement with the VA and their demonstrated capability in providing HVAC-related services. Without specific historical data on past performance reviews or contract modifications, it's difficult to definitively gauge their reliability and past success rates specifically with the VA beyond the fact that they are an awarded vendor.

How does the cost of this chiller repair compare to similar emergency repairs at other federal facilities?

Benchmarking the $205,810 cost for this emergency chiller compressor repair against similar contracts at other federal facilities is challenging without access to a comprehensive database of comparable emergency repair awards. Factors such as the specific make and model of the chiller, the complexity of the repair, the geographic location (which affects labor rates and travel costs), and the urgency of the situation can significantly influence pricing. Generally, emergency repairs command a premium. A detailed analysis would require identifying contracts with similar scope, equipment, and urgency, and then comparing the price per component or per hour of specialized labor, adjusted for regional economic differences.

What are the potential risks associated with relying on a single manufacturer for critical equipment repair?

Relying on a single manufacturer, such as Daikin Applied Americas Inc. for this specific chiller, for critical equipment repair presents several risks. Firstly, it can lead to higher costs due to limited competition; the manufacturer may have a monopoly on proprietary parts and specialized labor, allowing them to charge premium prices. Secondly, it can result in longer lead times for parts and service, especially if the manufacturer's supply chain is strained or if the required components are not readily available. This extended downtime can be particularly detrimental for critical facilities like VA hospitals. Lastly, it creates a dependency that could be exploited if the manufacturer faces financial difficulties or decides to discontinue support for older models.

What is the typical lifespan and maintenance schedule for critical chiller systems in federal facilities?

The typical lifespan for critical chiller systems in federal facilities can range from 15 to 25 years, depending on the quality of the equipment, the intensity of its use, and the rigor of its maintenance schedule. Regular, preventative maintenance is crucial for extending this lifespan and ensuring reliable operation. This includes routine inspections, cleaning of coils and filters, lubrication of moving parts, and performance testing. Emergency repairs, like the one awarded here, often indicate that a component has failed prematurely or that the system has reached a point where standard maintenance is no longer sufficient to prevent breakdowns. Adherence to manufacturer-recommended maintenance schedules and proactive replacement of aging components are key to avoiding costly emergency interventions.

How has federal spending on HVAC maintenance and repair evolved over the past five years?

Federal spending on HVAC maintenance and repair has generally remained a significant and consistent expenditure category across agencies, driven by the need to maintain aging infrastructure and ensure operational continuity in federal buildings. While specific aggregate data for HVAC repair alone can be difficult to isolate, overall spending on facility maintenance and repair has seen fluctuations influenced by infrastructure initiatives, budget appropriations, and the condition of the federal building stock. There's a continuous trend towards modernization and energy efficiency, which can sometimes involve upgrades that reduce the need for certain types of repairs but increase spending on new technologies. Emergency repairs, like this chiller service, represent a reactive component of this spending, often increasing when preventative maintenance is insufficient or when unforeseen equipment failures occur.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Automatic Environmental Control Manufacturing for Residential, Commercial, and Appliance Use

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Daikin Industries, Ltd.

Address: 13600 INDUSTRIAL PARK BLVD, MINNEAPOLIS, MN, 55441

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

Financial Breakdown

Contract Ceiling: $20,581

Exercised Options: $20,581

Current Obligation: $20,581

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: GS07F0377V

IDV Type: FSS

Timeline