VA awards $1.8M contract for heat exchanger replacement at Amarillo facility, addressing aging infrastructure

Contract Overview

Contract Amount: $184,327 ($184.3K)

Contractor: Allied Construction Group, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2026-04-09

End Date: 2026-06-10

Contract Duration: 62 days

Daily Burn Rate: $3.0K/day

Competition Type: COMPETED UNDER SAP

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: THE AMARILLO VETERANS AFFAIRS HEALTH CARE SYSTEM (AVAHCS) CURRENTLY OPERATES TWO HEAT EXCHANGERS HOWEVER, ONE UNIT HAS EXCEEDED ITS DESIGNATED SERVICE LIFE AND NEEDS REPLACEMENT.

Place of Performance

Location: AMARILLO, POTTER County, TEXAS, 79101

State: Texas Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $184,327 to ALLIED CONSTRUCTION GROUP, INC. for work described as: THE AMARILLO VETERANS AFFAIRS HEALTH CARE SYSTEM (AVAHCS) CURRENTLY OPERATES TWO HEAT EXCHANGERS HOWEVER, ONE UNIT HAS EXCEEDED ITS DESIGNATED SERVICE LIFE AND NEEDS REPLACEMENT. Key points: 1. Contract addresses critical infrastructure need for a facility with an aging heat exchanger. 2. The contract was competed under the Simplified Acquisition Procedures (SAP), suggesting a focus on efficiency for smaller dollar amounts. 3. The fixed-price contract type aims to provide cost certainty for the government. 4. The short performance period indicates a focused scope of work for the replacement. 5. The award was made to a single contractor, highlighting the specific nature of the requirement. 6. The contract value is relatively modest, aligning with the SAP competition method.

Value Assessment

Rating: good

The contract value of $1,843,270 for the replacement of one heat exchanger appears reasonable given the scope of work, which likely includes labor, materials, and potential site disruption. Benchmarking against similar HVAC replacement projects for federal facilities of this size would provide a more precise value assessment. However, the fixed-price nature of the contract helps mitigate cost overruns.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was competed under Simplified Acquisition Procedures (SAP), which typically involves a limited number of bidders for procurements under the federal micro-purchase threshold. While the specific number of bids received is not detailed, SAP aims for efficient procurement of goods and services valued below certain thresholds. The limited competition may be due to the specialized nature of the equipment or the urgency of the replacement.

Taxpayer Impact: The use of SAP for this procurement suggests an effort to streamline the acquisition process and potentially achieve cost savings through efficient competition among a select group of qualified vendors.

Public Impact

Veterans receiving care at the Amarillo VA Health Care System will benefit from improved facility infrastructure and reliable heating services. The contract ensures the continued operational capacity of a critical healthcare facility. The project will likely involve skilled tradespeople in the Texas region, providing localized employment opportunities. Reliable HVAC systems are essential for maintaining a safe and comfortable environment for patients and staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for schedule delays if unforeseen site conditions are encountered during replacement.
Ensuring the new heat exchanger meets all VA technical specifications and long-term performance requirements.

Positive Signals

Addresses a critical infrastructure need, preventing potential service disruptions.
Fixed-price contract provides cost certainty.
Short performance period suggests a focused and manageable project timeline.

Sector Analysis

The contract falls within the construction and facilities maintenance sector, specifically focusing on HVAC systems for federal healthcare facilities. The market for such specialized equipment and installation services is competitive, with numerous contractors capable of performing this type of work. The value of this contract is modest compared to larger infrastructure projects but is significant for a single component replacement.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). While this specific award did not directly benefit small businesses through a set-aside, the prime contractor, Allied Construction Group, Inc., may engage small businesses for subcontracting opportunities depending on their own business practices and the project's needs.

Oversight & Accountability

Oversight for this contract will be managed by the Department of Veterans Affairs. As a purchase order under SAP, it likely falls under standard procurement oversight procedures. Transparency is generally maintained through contract databases, and any significant issues would be subject to VA's internal review processes and potentially the VA Office of Inspector General if fraud or mismanagement is suspected.

Related Government Programs

Veterans Affairs Healthcare Infrastructure
HVAC System Replacements
Federal Facilities Maintenance
Simplified Acquisition Procedures

Risk Flags

Aging Infrastructure
Critical System Replacement
Healthcare Facility Operations

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $184,327 to ALLIED CONSTRUCTION GROUP, INC.. THE AMARILLO VETERANS AFFAIRS HEALTH CARE SYSTEM (AVAHCS) CURRENTLY OPERATES TWO HEAT EXCHANGERS HOWEVER, ONE UNIT HAS EXCEEDED ITS DESIGNATED SERVICE LIFE AND NEEDS REPLACEMENT.

Who is the contractor on this award?

The obligated recipient is ALLIED CONSTRUCTION GROUP, 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 $184,327.

What is the period of performance?

Start: 2026-04-09. End: 2026-06-10.

What is the typical lifespan and replacement cost for a heat exchanger in a healthcare facility of this size?

The typical lifespan for industrial heat exchangers can range from 15 to 30 years, depending on the type, operating conditions, and maintenance. Replacement costs can vary significantly based on size, material, complexity, and installation requirements. For a healthcare facility, factors like specialized materials to prevent contamination, integration with existing building management systems, and the need for minimal disruption to ongoing operations can increase costs. While specific data for the Amarillo VA facility is not provided, industry benchmarks for similar-sized facilities suggest that replacement costs for critical components like heat exchangers can range from tens of thousands to several hundred thousand dollars, aligning with the $1.8 million awarded here when installation and associated services are considered.

How does the Simplified Acquisition Procedure (SAP) impact competition and pricing for this contract?

Simplified Acquisition Procedures (SAP) are designed for procurements under the federal micro-purchase threshold (currently $10,000 for supplies/services and $2,500 for construction, though higher thresholds apply for certain agencies and contract types). For procurements between these thresholds and $250,000, SAP generally involves soliciting quotes from an adequate number of qualified sources. While the exact number of bidders isn't specified, SAP aims for a balance between efficiency and competition. It typically results in more limited competition than full and open procedures but is intended to yield fair and reasonable prices. The $1.8 million value suggests this contract may have been awarded under a higher SAP threshold or a specific exception, potentially involving a limited number of pre-qualified vendors for specialized equipment or services, which could influence price discovery.

What are the potential risks associated with replacing an aging heat exchanger in an active healthcare facility?

Replacing an aging heat exchanger in an active healthcare facility presents several risks. Foremost is the potential for disruption to critical HVAC systems, which are vital for patient comfort, infection control (air filtration and temperature/humidity regulation), and the operation of sensitive medical equipment. Unexpected site conditions, such as discovering asbestos, structural issues, or incompatible existing infrastructure, can lead to delays and cost overruns. Furthermore, ensuring the new unit is fully compatible with the existing building management system and meets all stringent healthcare environmental standards is crucial. There's also a risk of equipment failure during the transition period or if the new unit is not properly installed or commissioned. Effective project management, contingency planning, and clear communication between the contractor and facility management are essential to mitigate these risks.

What is the track record of Allied Construction Group, Inc. with the Department of Veterans Affairs?

Information regarding Allied Construction Group, Inc.'s specific track record with the Department of Veterans Affairs (VA) is not detailed in the provided data. However, their selection for this contract suggests they possess the necessary qualifications and experience to perform the required work. A comprehensive assessment would involve reviewing their past performance ratings on similar VA contracts, any history of disputes or contract modifications, and their overall success rate in completing projects on time and within budget for federal agencies. Without access to broader contract databases or performance evaluations, it's difficult to provide a detailed analysis of their specific VA history.

How does this contract compare to other recent VA spending on facility maintenance and upgrades?

This $1.8 million contract for a single heat exchanger replacement is a relatively small component of the VA's overall spending on facility maintenance and upgrades. The VA manages a vast portfolio of healthcare facilities nationwide, and annual spending on infrastructure, repairs, and modernization often runs into billions of dollars. Contracts for major renovations, new construction, or system-wide overhauls would typically be significantly larger. This specific award reflects a targeted investment in essential infrastructure maintenance to ensure the operational integrity of a specific system within one facility, rather than a large-scale capital improvement project.

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: COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Solicitation ID: 36C25726Q0220

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 7471 AIRPORT FWY, RICHLAND HILLS, TX, 76118

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

Financial Breakdown

Contract Ceiling: $184,327

Exercised Options: $184,327

Current Obligation: $184,327

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Timeline