VA awards $4.16M firm-fixed-price contract for chilled water tank repair to DN Tanks, LLC

Contract Overview

Contract Amount: $4,161,015 ($4.2M)

Contractor: DN Tanks, LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2023-10-04

End Date: 2026-06-30

Contract Duration: 1,000 days

Daily Burn Rate: $4.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: REPAIR CHILLED WATER STORAGE TANK

Place of Performance

Location: DALLAS, DALLAS County, TEXAS, 75201

State: Texas Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $4.2 million to DN TANKS, LLC for work described as: REPAIR CHILLED WATER STORAGE TANK Key points: 1. Contract awarded on a sole-source basis, raising questions about price competition. 2. The contract duration of approximately 2.7 years suggests a significant repair or replacement project. 3. The North American Industry Classification System (NAICS) code 238220 indicates a focus on specialized plumbing and HVAC services. 4. The contract is a definitive contract, suggesting a clear scope of work. 5. The firm-fixed-price structure shifts risk to the contractor, which can be beneficial for the government if well-managed. 6. The award is for a single repair task, not a broad service agreement.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without more specific details on the scope of the chilled water storage tank repair. However, the raw dollar amount of $4.16 million for a single repair task appears substantial. Comparing it to similar, large-scale infrastructure repairs for federal facilities would be necessary to determine if the pricing is competitive. The firm-fixed-price nature suggests the government has a defined budget, but the lack of competition could lead to a less favorable price than if multiple bids were solicited.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor can provide the required goods or services, or in cases of urgent need. The lack of competition means that the Department of Veterans Affairs did not benefit from a bidding process that could have driven down prices through market forces. It is unclear from the provided data why a sole-source award was deemed necessary for this repair.

Taxpayer Impact: Sole-source awards limit the government's ability to secure the best possible price through competition, potentially leading to higher costs for taxpayers. Without a competitive bidding process, there is less assurance that the awarded price reflects fair market value.

Public Impact

The primary beneficiary of this contract is the Department of Veterans Affairs, ensuring the operational integrity of its facilities. The services delivered will involve the repair of a chilled water storage tank, crucial for HVAC systems. The geographic impact is localized to the facility where the tank is located in Texas. The contract supports specialized labor within the plumbing, heating, and air-conditioning contracting sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing opportunities.
Lack of detailed scope of work makes value assessment difficult.
Potential for cost overruns if unforeseen issues arise in the repair process.

Positive Signals

Firm-fixed-price contract shifts risk to the contractor.
Contract is for a specific repair, indicating a defined need.
Awarded to a company specializing in tank repair (DN Tanks, LLC).

Sector Analysis

The contract falls within the construction and maintenance sector, specifically focusing on specialized mechanical systems. The market for large-scale tank repair and maintenance can be specialized, with a limited number of qualified contractors. The $4.16 million award is significant for a single repair task, suggesting the tank is a critical piece of infrastructure. Comparable spending benchmarks would typically involve analyzing other federal or large commercial contracts for similar infrastructure repairs to assess cost-effectiveness.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb: false'. Furthermore, there is no information provided regarding subcontracting plans that would specifically benefit small businesses. The award to DN Tanks, LLC, a company likely of significant size given the contract value, suggests that subcontracting opportunities for small businesses are not a primary focus of this particular award.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Veterans Affairs' contracting and facilities management departments. As a definitive contract with a firm-fixed-price structure, the VA would monitor progress against the defined scope and schedule. Transparency is limited by the sole-source nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected in the procurement or execution of the contract.

Related Government Programs

Federal Building Maintenance Contracts
HVAC System Repair and Maintenance
Department of Veterans Affairs Capital Asset Management
Infrastructure Repair and Modernization

Risk Flags

Sole-source award lacks competitive justification.
Extended contract duration may indicate potential inefficiencies or scope creep.
Limited public information on specific repair details and contractor performance.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $4.2 million to DN TANKS, LLC. REPAIR CHILLED WATER STORAGE TANK

Who is the contractor on this award?

The obligated recipient is DN TANKS, 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 $4.2 million.

What is the period of performance?

Start: 2023-10-04. End: 2026-06-30.

What is the specific nature of the chilled water storage tank repair required, and what factors contributed to the sole-source award?

The provided data indicates the contract is for the 'REPAIR CHILLED WATER STORAGE TANK' with a value of $4,161,015.35, awarded to DN Tanks, LLC. The contract was designated as 'NOT COMPETED,' signifying a sole-source award. Without further documentation or justification from the awarding agency (Department of Veterans Affairs), the precise reasons for this sole-source determination remain unclear. Typically, sole-source awards are justified by factors such as unique capabilities of the contractor, urgent and compelling needs that preclude competition, or when only one responsible source is available. For a tank repair, potential justifications could include specialized patented repair techniques, critical system interdependencies requiring the original installer, or an emergency situation where only one qualified vendor could respond in time. Further investigation into the VA's justification documentation would be required to ascertain the specific rationale.

How does the $4.16 million cost compare to typical costs for similar chilled water storage tank repairs in the federal sector?

Benchmarking the $4.16 million cost for a chilled water storage tank repair against federal sector averages is challenging without detailed specifications of the repair scope and the tank's condition. However, this figure represents a substantial investment for a single repair task. Typical repairs can range from minor seal replacements to major structural rehabilitation or even partial replacement. Large-scale repairs or replacements for critical infrastructure components in federal facilities can indeed reach millions of dollars, especially considering specialized labor, materials, and compliance with stringent federal standards. To provide a more accurate comparison, one would need to analyze contracts for similar-sized tanks, the extent of the required work (e.g., lining, structural reinforcement, component replacement), and the geographic location, as regional labor and material costs vary. The lack of competition for this award also complicates a direct value-for-money assessment against potentially lower bids from a competitive process.

What are the potential risks associated with a sole-source award for this type of infrastructure repair?

The primary risk associated with a sole-source award for infrastructure repair is the potential for inflated pricing due to the absence of competitive pressure. Without multiple bids, the government may not secure the most cost-effective solution. Another risk is a potential lack of innovation, as the sole provider may not be incentivized to offer novel or more efficient repair methods. Furthermore, if the sole-source justification is weak or based on outdated information, the government might miss opportunities to engage with other qualified contractors who could offer better value or specialized expertise. There's also a reputational risk if the award appears to lack transparency or fairness. Finally, reliance on a single vendor can create dependency, potentially leading to future challenges if that vendor's capacity or pricing changes unfavorably.

What is the track record of DN Tanks, LLC in performing similar repair services for federal agencies?

DN Tanks, LLC is a known entity in the tank construction and repair industry. While the provided data does not detail their specific track record with federal agencies, the company website and industry presence suggest they specialize in concrete tank solutions, including repair and rehabilitation. Federal agencies often contract with established private sector companies for specialized infrastructure work. To assess their track record thoroughly, one would need to examine past federal contract awards to DN Tanks, LLC, focusing on the types of projects completed, their performance ratings (if available through sources like the Contractor Performance Assessment Reporting System - CPARS), and any history of disputes or contract modifications. Their specialization in tanks suggests they possess the necessary technical expertise for this type of repair.

What are the implications of the firm-fixed-price (FFP) contract type for this repair project?

A firm-fixed-price (FFP) contract type means that the contractor, DN Tanks, LLC, is obligated to perform the work for a stated price, regardless of the actual costs incurred. This structure is generally advantageous for the government when the scope of work is well-defined and the risks of cost overruns are manageable. For this chilled water storage tank repair, the FFP structure shifts the primary financial risk to DN Tanks, LLC. If the repair costs more than anticipated due to unforeseen issues or inefficiencies, the contractor absorbs the loss. Conversely, if the contractor can complete the work under budget, they retain the profit. This contract type provides cost certainty for the Department of Veterans Affairs, as the total price is fixed, assuming no contract modifications are necessary. It incentivizes the contractor to manage costs efficiently and complete the work within the agreed-upon budget.

How does the contract duration of approximately 1000 days (around 2.7 years) align with typical timelines for such repairs?

A contract duration of approximately 1000 days (around 2.7 years) for the repair of a single chilled water storage tank suggests a project of considerable scope and complexity, or potentially a phased approach to the repair work. Standard repairs might be completed within weeks or a few months. A longer duration could indicate that the repair involves extensive structural work, requires significant curing times for materials, needs to be performed in phases to maintain partial facility operation, or includes associated upgrades or system integration. It's also possible that the duration includes planning, mobilization, demobilization, and contingency time. Without specific details on the tank's condition and the nature of the repairs, it's difficult to definitively assess if this timeline is excessive. However, such an extended period warrants scrutiny to ensure efficient project management and timely completion to minimize disruption.

Industry Classification

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

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: 36C25723R0039

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 11 TEAL RD, WAKEFIELD, MA, 01880

Business Categories: Category Business, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $4,511,015

Exercised Options: $4,511,015

Current Obligation: $4,161,015

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline