VA awards $8.98M contract for HVAC upgrades, facing limited competition

Contract Overview

Contract Amount: $8,979,330 ($9.0M)

Contractor: Innovative Support Solutions, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2020-08-24

End Date: 2025-08-20

Contract Duration: 1,822 days

Daily Burn Rate: $4.9K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: REPLACE AIR HANDLING UNIT AC17 AND AC18

Place of Performance

Location: CLEVELAND, CUYAHOGA County, OHIO, 44106

State: Ohio Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $9.0 million to INNOVATIVE SUPPORT SOLUTIONS, INC. for work described as: REPLACE AIR HANDLING UNIT AC17 AND AC18 Key points: 1. Contract value of $8.98M for critical HVAC system replacement. 2. Limited competition raises questions about price discovery and value. 3. Potential risk associated with aging infrastructure and extended contract duration. 4. Sector: Facilities maintenance and upgrades within the healthcare infrastructure.

Value Assessment

Rating: fair

The contract value of $8.98M for replacing two air handling units appears high compared to typical HVAC unit replacement costs. Benchmarking against similar VA or federal contracts for comparable units and scope is needed to confirm value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicating a limited competition. This method may have restricted the pool of potential bidders, potentially impacting price discovery and leading to a less competitive outcome.

Taxpayer Impact: The limited competition raises concerns about whether taxpayers received the best possible price for these essential HVAC upgrades.

Public Impact

Ensures continued operation of critical medical facilities by maintaining essential climate control. Potential for improved energy efficiency and reduced maintenance costs with new units. Impacts patient comfort and safety by ensuring reliable air quality and temperature.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition
High per-unit cost potential
Long contract duration

Positive Signals

Addresses critical infrastructure need
Firm fixed price contract type

Sector Analysis

This contract falls within the facilities maintenance and construction sector, specifically focusing on HVAC systems crucial for government buildings, particularly healthcare facilities like those operated by the VA. Spending benchmarks for similar HVAC replacement projects vary widely based on unit size, complexity, and location.

Small Business Impact

The contract was not awarded to a small business, as indicated by 'sb': false. There is no information provided on subcontracting opportunities for small businesses within this award.

Oversight & Accountability

The contract was awarded by the Department of Veterans Affairs. Oversight should focus on ensuring the contractor meets performance standards and that the limited competition process was justified and documented appropriately.

Related Government Programs

Plumbing, Heating, and Air-Conditioning Contractors
Department of Veterans Affairs Contracting
Department of Veterans Affairs Programs

Risk Flags

Limited competition may result in higher costs.
Lack of small business participation.
Potential for cost overruns if scope expands.
Aging infrastructure requires careful management during transition.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $9.0 million to INNOVATIVE SUPPORT SOLUTIONS, INC.. REPLACE AIR HANDLING UNIT AC17 AND AC18

Who is the contractor on this award?

The obligated recipient is INNOVATIVE SUPPORT SOLUTIONS, 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 $9.0 million.

What is the period of performance?

Start: 2020-08-24. End: 2025-08-20.

What is the specific justification for excluding other sources in this 'full and open competition after exclusion of sources' award, and how does it ensure best value?

The justification for excluding other sources is critical. Typically, this requires demonstrating that only specific sources can meet the requirement due to unique capabilities, proprietary technology, or urgent needs. Without this justification, the limited competition raises concerns about whether the VA truly explored all viable options to secure the best possible price and technical solution for taxpayers.

How does the $8.98M cost compare to industry benchmarks for replacing two specific air handling units (AC17 and AC18) of the described capacity and complexity?

Benchmarking the $8.98M cost against industry standards for replacing two specific air handling units is essential. Factors like unit capacity (tons/BTU), efficiency ratings, required modifications to ductwork, electrical, and control systems, and installation complexity in an active medical facility all influence cost. A detailed comparison is needed to determine if this price represents fair market value or if it is inflated due to limited competition.

What are the potential risks associated with the 5-year contract duration (2020-2025) for replacing aging air handling units, and are there performance metrics to mitigate these?

A 5-year duration for replacing aging units presents risks including potential for unforeseen equipment failures during the transition, contractor performance variability over time, and the possibility of technology becoming outdated. Robust performance metrics, clear acceptance criteria, and phased payment schedules tied to successful installation and commissioning are vital to mitigate these risks and ensure the VA receives a functional and reliable system.

Industry Classification

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

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: 36C25019B0060

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 259 E 3RD ST, ELMHURST, IL, 60126

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

Financial Breakdown

Contract Ceiling: $8,979,330

Exercised Options: $8,979,330

Current Obligation: $8,979,330

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline