VA awards $2.4M electrical maintenance contract to Shermco Industries Inc. for 5-year Texas service

Contract Overview

Contract Amount: $2,422,496 ($2.4M)

Contractor: Shermco Industries Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2020-07-10

End Date: 2025-07-09

Contract Duration: 1,825 days

Daily Burn Rate: $1.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: COMPREHENSIVE ELECTRICAL MAINTENANCE AND RESTORATION SERVICE CONTRACT

Place of Performance

Location: DALLAS, DALLAS County, TEXAS, 75216

State: Texas Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $2.4 million to SHERMCO INDUSTRIES INC for work described as: COMPREHENSIVE ELECTRICAL MAINTENANCE AND RESTORATION SERVICE CONTRACT Key points: 1. Contract provides essential maintenance and restoration for electrical systems, ensuring operational continuity. 2. The firm-fixed-price structure offers cost certainty for the government. 3. A 5-year duration indicates a long-term need for these specialized services. 4. The contract is awarded to a single entity, Shermco Industries Inc. 5. Geographic focus on Texas suggests localized service delivery. 6. The North American Industry Classification System (NAICS) code 811219 points to a niche repair and maintenance sector.

Value Assessment

Rating: good

The contract value of $2.4 million over five years averages to approximately $484,499 per year. Benchmarking this against similar large-scale electrical maintenance contracts is challenging without more specific service scope details. However, for a definitive contract of this duration and scope, the pricing appears within a reasonable range, assuming comprehensive coverage. The firm-fixed-price nature helps control costs, but the overall value for money depends on the quality and responsiveness of the services provided by Shermco Industries Inc.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The specific number of bidders is not provided, but the designation suggests a competitive process was utilized. This approach is generally favored as it allows the government to solicit proposals from the widest possible range of qualified contractors, potentially leading to better pricing and service offerings.

Taxpayer Impact: Full and open competition typically benefits taxpayers by fostering a competitive environment that can drive down prices and encourage innovation among service providers.

Public Impact

The Department of Veterans Affairs (VA) benefits from reliable electrical infrastructure maintenance, ensuring uninterrupted operations at its facilities. Veterans and VA staff benefit from a safe and functional environment due to well-maintained electrical systems. The contract supports specialized electrical maintenance jobs within the Texas region. Services are critical for the operational continuity of VA facilities in Texas.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific performance metrics in the provided data makes it difficult to assess contractor performance beyond contract award.
The duration of the contract (5 years) means potential for long-term issues if not managed proactively.
Dependence on a single contractor for critical infrastructure maintenance carries inherent risks.

Positive Signals

Awarded through full and open competition, suggesting a robust selection process.
Firm-fixed-price contract type provides cost predictability for the government.
The contractor, Shermco Industries Inc., is likely experienced in this specialized field, given the contract award.

Sector Analysis

This contract falls within the broader professional, scientific, and technical services sector, specifically focusing on the repair and maintenance of electronic and precision equipment. The market for specialized electrical maintenance and restoration services is competitive, with numerous firms offering expertise in industrial and commercial electrical systems. The VA's spending in this area is consistent with the need to maintain aging infrastructure and ensure the reliable operation of critical facilities. Comparable spending benchmarks would typically be found within government-wide contract vehicles or agency-specific historical data for similar services.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (sb: false) and there is no indication of small business subcontracting requirements (ss: false). This suggests that the primary award went to a larger entity, and opportunities for small businesses would likely be through direct subcontracting if initiated by Shermco Industries Inc., rather than through a mandated set-aside. The absence of small business participation goals means direct impact on the small business ecosystem is limited unless the prime contractor actively engages them.

Oversight & Accountability

Oversight for this contract would primarily reside with the contracting officer and the relevant program officials within the Department of Veterans Affairs. Accountability measures are typically embedded in the contract's terms and conditions, including performance standards and payment schedules tied to satisfactory service delivery. Transparency is facilitated through contract databases like FPDS, which record award details. Inspector General jurisdiction would apply if any allegations of fraud, waste, or abuse arise related to this contract.

Related Government Programs

Federal Buildings and Facilities Maintenance
Department of Veterans Affairs Capital Asset and Business Operations Support
Electrical Contractor Services
Critical Infrastructure Maintenance Contracts

Risk Flags

Potential for service disruption if contractor performance degrades over the 5-year term.
Risk of increased costs if unforeseen major electrical issues require extensive, unbudgeted repairs beyond the scope of routine maintenance.
Over-reliance on a single contractor for critical infrastructure maintenance.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $2.4 million to SHERMCO INDUSTRIES INC. COMPREHENSIVE ELECTRICAL MAINTENANCE AND RESTORATION SERVICE CONTRACT

Who is the contractor on this award?

The obligated recipient is SHERMCO INDUSTRIES 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 $2.4 million.

What is the period of performance?

Start: 2020-07-10. End: 2025-07-09.

What is Shermco Industries Inc.'s track record with the federal government, particularly with the Department of Veterans Affairs?

A review of federal procurement data would be necessary to fully assess Shermco Industries Inc.'s track record. This would involve examining past contract awards, performance evaluations (if publicly available), and any history of disputes or contract modifications. For the Department of Veterans Affairs specifically, understanding their past engagements with Shermco would reveal their experience in meeting VA requirements. Without access to detailed performance data and historical contract information, it's difficult to provide a comprehensive assessment of their track record. However, being awarded a multi-year definitive contract suggests a level of established capability and past performance deemed satisfactory by the agency.

How does the annual cost of this contract compare to similar electrical maintenance contracts for federal facilities?

The annual cost of this contract is approximately $484,499 ($2.4M / 5 years). To benchmark this effectively, one would need to compare it against contracts for similar-sized federal facilities, with comparable scopes of work (e.g., comprehensive maintenance, emergency restoration, specific types of electrical systems). Factors such as geographic location (labor costs), the age and complexity of the electrical infrastructure, and the specific service level agreements (SLAs) would influence pricing. Without access to a database of comparable contracts with detailed scope and pricing, a precise comparison is difficult. However, for a 5-year definitive contract covering a significant facility or set of facilities, this annual figure appears to be within a plausible range for specialized electrical maintenance.

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

Key risks include potential service disruptions if the contractor fails to perform adequately, cost overruns if the firm-fixed-price model is insufficient for unforeseen issues (though this is less likely with FFP), and contractor dependency. Mitigation strategies typically involve robust performance monitoring by the VA, clear contract terms and conditions, defined service level agreements (SLAs), and contingency planning. The full and open competition process itself mitigates the risk of selecting an unqualified vendor. Furthermore, the contract's duration allows for relationship building but also necessitates ongoing oversight to ensure sustained performance and address any emerging issues proactively.

How effective is the firm-fixed-price contract type in ensuring value for money for this electrical maintenance service?

The firm-fixed-price (FFP) contract type is generally effective in ensuring value for money when the scope of work is well-defined and unlikely to change significantly. For routine electrical maintenance and restoration, FFP provides cost certainty to the government, as the contractor assumes the risk of cost overruns. This incentivizes the contractor to manage their costs efficiently. However, if unforeseen complex issues arise that require extensive, unbudgeted work, an FFP contract might limit the government's flexibility or lead to change orders, potentially increasing the overall cost. For predictable maintenance tasks, FFP is a strong choice for cost control.

What is the historical spending pattern for electrical maintenance and repair services by the Department of Veterans Affairs?

Analyzing the Department of Veterans Affairs' historical spending on electrical maintenance and repair would require access to comprehensive procurement data over several fiscal years. This would involve querying databases for contracts awarded under relevant NAICS codes (like 811219) and service categories related to facilities maintenance and electrical systems. Such an analysis would reveal trends in spending, identify major contractors, and indicate whether spending has been increasing, decreasing, or remaining stable. It would also highlight the typical contract durations and types (e.g., FFP, cost-plus) utilized by the VA for these services, providing context for the current award.

Industry Classification

NAICS: Other Services (except Public Administration) › Electronic and Precision Equipment Repair and Maintenance › Other Electronic and Precision Equipment Repair and Maintenance

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 36C25720Q0289

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2425 EAST PIONEER DR, IRVING, TX, 75061

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

Financial Breakdown

Contract Ceiling: $2,422,496

Exercised Options: $2,422,496

Current Obligation: $2,422,496

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline