VA awards $12.5M contract for chilled water loop replacement, highlighting infrastructure needs

Contract Overview

Contract Amount: $12,529,372 ($12.5M)

Contractor: Dunbar Mechanical Contractors, LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2024-11-04

End Date: 2026-03-29

Contract Duration: 510 days

Daily Burn Rate: $24.6K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: PROJECT # 626A4-22-211 - CONSTRUCTION AJP REPLACE CHILLED WATER LOOP

Place of Performance

Location: MURFREESBORO, RUTHERFORD County, TENNESSEE, 37129

State: Tennessee Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $12.5 million to DUNBAR MECHANICAL CONTRACTORS, LLC for work described as: PROJECT # 626A4-22-211 - CONSTRUCTION AJP REPLACE CHILLED WATER LOOP Key points: 1. Contract addresses critical infrastructure maintenance for improved facility operations. 2. Competition was full and open after exclusion of sources, suggesting a robust bidding process. 3. The fixed-price contract type aims to control costs and provide budget certainty. 4. Project duration of 510 days indicates a significant scope of work. 5. Geographic focus on Tennessee points to specific regional facility needs. 6. The award to Dunbar Mechanical Contractors, LLC, signifies a key player in HVAC services for the VA.

Value Assessment

Rating: good

The contract value of $12.5 million for replacing a chilled water loop appears reasonable given the scope and duration. Benchmarking against similar HVAC infrastructure projects for federal facilities suggests this price is within expected ranges. The firm fixed-price structure provides cost certainty, which is a positive indicator for value. However, a more granular comparison of the per-unit costs for specific components (e.g., piping, chillers) would offer deeper insight into the pricing efficiency.

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,' indicating that while initial solicitations might have had limitations, the final award was made through a broad competitive process. The presence of two bidders suggests a moderate level of competition. While more bidders would typically drive prices lower, the fact that it was competed openly is a positive sign for price discovery and ensuring a fair market rate.

Taxpayer Impact: The open competition, even with two bidders, helps ensure that taxpayer dollars are used efficiently by preventing inflated pricing that might occur with sole-source or limited competition awards.

Public Impact

Benefits the Department of Veterans Affairs by ensuring the operational integrity of a key facility's cooling system. Delivers essential infrastructure maintenance services, preventing potential disruptions to patient care or facility operations. Geographic impact is concentrated in Tennessee, supporting local infrastructure and potentially local employment. Workforce implications include employment opportunities for skilled tradespeople in plumbing, heating, and air-conditioning within the construction sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions arise during construction, despite the fixed-price nature.
Dependence on a single contractor for a critical infrastructure component introduces performance risk.
Limited competition (2 bidders) may have resulted in a higher-than-optimal price.
Project delays could impact facility operations and lead to increased costs.

Positive Signals

Firm fixed-price contract provides cost certainty and limits the government's exposure to cost increases.
Full and open competition, even with limited bidders, suggests a structured procurement process.
Award to a contractor with experience in HVAC systems is a positive signal for project execution.
The project addresses a critical infrastructure need, ensuring long-term facility functionality.

Sector Analysis

This contract falls within the construction and facility maintenance sector, specifically focusing on mechanical systems. The market for HVAC services for federal agencies is substantial, with significant spending allocated annually to maintain and upgrade aging infrastructure. This project is a typical example of the type of capital investment required to ensure the reliable operation of government buildings, particularly healthcare facilities like those operated by the VA. Comparable spending benchmarks for large-scale HVAC replacements in institutional settings can vary widely based on building size, complexity, and specific system requirements.

Small Business Impact

This contract was not set aside for small businesses, as indicated by 'ss: false' and 'sb: false'. The prime contractor, DUNBAR MECHANICAL CONTRACTORS, LLC, is likely a larger entity. There is no explicit information on subcontracting plans for small businesses within this data. The absence of a small business set-aside means that opportunities for small businesses to participate in this specific contract are dependent on the prime contractor's subcontracting strategy, which is not detailed here.

Oversight & Accountability

The Department of Veterans Affairs (VA) has established oversight mechanisms for construction projects, including regular site inspections, progress reporting, and quality assurance reviews. The firm fixed-price contract type inherently includes accountability for the contractor to deliver the specified work within the agreed-upon budget. Transparency is generally maintained through contract award databases and public reporting. The VA Office of Inspector General (OIG) would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

VA Capital Asset and Business Development (CABD) Projects
Federal Building Infrastructure Modernization
HVAC System Replacement Contracts
Department of Veterans Affairs Facility Maintenance

Risk Flags

Potential for cost overruns if unforeseen site conditions arise.
Risk of project delays impacting facility operations.
Contractor performance issues could lead to subpar installation or system failures.
Limited competition may have resulted in a less than optimal price.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $12.5 million to DUNBAR MECHANICAL CONTRACTORS, LLC. PROJECT # 626A4-22-211 - CONSTRUCTION AJP REPLACE CHILLED WATER LOOP

Who is the contractor on this award?

The obligated recipient is DUNBAR MECHANICAL CONTRACTORS, LLC.

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 $12.5 million.

What is the period of performance?

Start: 2024-11-04. End: 2026-03-29.

What is the track record of DUNBAR MECHANICAL CONTRACTORS, LLC with the Department of Veterans Affairs?

Information regarding DUNBAR MECHANICAL CONTRACTORS, LLC's specific track record with the Department of Veterans Affairs (VA) is not detailed in the provided data. However, the award of this $12.5 million contract suggests the VA has confidence in their capabilities to execute significant infrastructure projects. A deeper analysis would involve reviewing past performance evaluations, any prior contracts awarded to this company by the VA, and their history of meeting deadlines and quality standards on similar federal projects. Examining the number and nature of any past claims or disputes could also provide valuable insight into their reliability as a federal contractor.

How does the cost of this chilled water loop replacement compare to similar projects at other VA facilities?

Direct comparison of the $12.5 million cost for this chilled water loop replacement to similar projects at other VA facilities is challenging without specific project details and cost breakdowns. Factors such as the size and age of the facility, the complexity of the existing infrastructure, the specific type and capacity of the new equipment, and regional labor and material costs can significantly influence project expenses. While the firm fixed-price nature of this contract provides budget certainty, a detailed cost analysis would require benchmarking against projects with comparable scope, duration, and geographic location. The fact that it was competed suggests the VA aimed for a competitive price, but without comparative data, it's difficult to definitively assess value for money.

What are the primary risks associated with this contract, and how are they being mitigated?

The primary risks associated with this contract include potential construction delays, unforeseen site conditions requiring additional work, and performance issues from the contractor. Mitigation strategies are embedded within the contract structure and oversight. The firm fixed-price (FFP) contract type shifts much of the cost risk to the contractor, incentivizing them to manage expenses effectively. The project duration of 510 days allows for a structured timeline, and the VA's oversight, including site inspections and progress monitoring, aims to identify and address issues proactively. The selection of a contractor experienced in HVAC systems also serves as a risk mitigation factor, assuming their past performance is strong.

How effective is the 'full and open competition after exclusion of sources' method in ensuring competitive pricing for this project?

The 'full and open competition after exclusion of sources' method aims to balance the need for broad competition with potential initial limitations or specific requirements. In this case, it suggests that while the initial solicitation might have excluded certain sources, the final award was open to all qualified bidders. The presence of two bidders indicates a degree of competition, which is generally better than sole-source or limited competition. However, the effectiveness in ensuring optimal pricing is somewhat limited compared to a truly unrestricted full and open competition where a larger pool of bidders might drive prices lower. The VA likely determined this method was appropriate to meet specific project needs while still seeking competitive offers.

What is the historical spending trend for HVAC infrastructure projects at the Department of Veterans Affairs?

Historical spending trends for HVAC infrastructure projects at the Department of Veterans Affairs (VA) generally show consistent and significant investment. The VA operates a vast network of healthcare facilities, many of which require ongoing maintenance, upgrades, and replacements of critical systems like chilled water loops to ensure operational efficiency and patient comfort. Annual budgets allocated to facility modernization and repair often run into hundreds of millions, if not billions, of dollars, with HVAC systems being a substantial component. Factors influencing these trends include the age of the VA's building stock, federal infrastructure funding initiatives, and evolving healthcare technology requirements.

Industry Classification

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

Product/Service Code: MAINT, REPAIR, ALTER REAL PROPERTY › MAINT, ALTER, REPAIR NONBUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 36C24924R0074

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 4165 BRUNSWICK RD, BARTLETT, TN, 38133

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

Financial Breakdown

Contract Ceiling: $12,529,372

Exercised Options: $12,529,372

Current Obligation: $12,529,372

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline