VA awards $4.8M contract for electrical repairs to Preferred Electric, LLC in Minnesota

Contract Overview

Contract Amount: $4,849,641 ($4.8M)

Contractor: Preferred Electric, LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2024-09-20

End Date: 2027-12-31

Contract Duration: 1,197 days

Daily Burn Rate: $4.1K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: 618-23-102, CORRECT ELECTRICAL DEFICIENCIES- DESIGN BUILD - PROVIDE A LABOR AND MATERIALS TO COMPLETE WORK PER CONTRACT DOCUMENTS.

Place of Performance

Location: MINNEAPOLIS, HENNEPIN County, MINNESOTA, 55417

State: Minnesota Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $4.8 million to PREFERRED ELECTRIC, LLC for work described as: 618-23-102, CORRECT ELECTRICAL DEFICIENCIES- DESIGN BUILD - PROVIDE A LABOR AND MATERIALS TO COMPLETE WORK PER CONTRACT DOCUMENTS. Key points: 1. Contract value appears reasonable for the scope of electrical repair work. 2. Full and open competition was utilized, suggesting a competitive bidding process. 3. The contract is a definitive contract with a firm fixed price, indicating cost certainty. 4. Performance period spans over three years, allowing for thorough project completion. 5. The work is categorized under Electrical Contractors, a specialized trade. 6. The award to a single contractor suggests a focus on specific expertise.

Value Assessment

Rating: good

The contract value of $4.85 million for electrical deficiencies repair and design-build services seems aligned with typical project costs for this type of work. Benchmarking against similar definitive contracts for electrical repair in the Midwest would provide a more precise value assessment. The firm fixed-price structure offers predictability for the government, though it places the risk of cost overruns on the contractor.

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,' which typically means that all responsible sources were permitted to submit a bid. While the specific number of bidders is not provided, this method generally fosters a competitive environment, which can lead to better pricing and quality for the government.

Taxpayer Impact: The use of full and open competition is beneficial for taxpayers as it maximizes the pool of potential offerors, increasing the likelihood of receiving competitive bids and securing the best value for the government's investment.

Public Impact

Veterans receiving services at the facility will benefit from improved electrical infrastructure. The contract ensures the delivery of essential electrical repair and maintenance services. The geographic impact is localized to Minnesota, where the facility is located. The contract will likely support local jobs within the electrical contracting sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific bidder count limits full assessment of competitive intensity.
Firm fixed-price contracts can sometimes lead to scope creep if not managed tightly.
The 'after exclusion of sources' phrasing warrants a review of the justification for any exclusions.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Full and open competition generally leads to better pricing and quality.
The contract duration allows for comprehensive execution of the required work.

Sector Analysis

This contract falls within the construction and maintenance sector, specifically focusing on electrical contracting services. The market for electrical contractors is robust, with numerous firms capable of undertaking government projects. The value of this contract is moderate within the context of large federal construction and repair projects, but significant for a specialized electrical repair task.

Small Business Impact

The data indicates that small business participation was not a primary focus for this specific award, as the contractor is Preferred Electric, LLC, and there is no indication of a small business set-aside. Further analysis would be needed to determine if subcontracting opportunities exist for small businesses within this contract.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of Veterans Affairs contracting officers and project managers. Accountability measures are inherent in the firm fixed-price contract type, requiring the contractor to deliver specified services within the agreed-upon cost. Transparency is facilitated by the public nature of federal contract awards, though detailed project progress reports may not be publicly available.

Related Government Programs

VA Facilities Maintenance Contracts
Federal Electrical Infrastructure Upgrades
Design-Build Construction Contracts
Government Building Repair and Renovation

Risk Flags

Potential for cost overruns in firm fixed-price contracts.
Risk of quality compromise if contractor faces financial pressure.
Need for robust government oversight to ensure adherence to specifications.
Complexity of design-build projects requires careful management.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $4.8 million to PREFERRED ELECTRIC, LLC. 618-23-102, CORRECT ELECTRICAL DEFICIENCIES- DESIGN BUILD - PROVIDE A LABOR AND MATERIALS TO COMPLETE WORK PER CONTRACT DOCUMENTS.

Who is the contractor on this award?

The obligated recipient is PREFERRED ELECTRIC, 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 $4.8 million.

What is the period of performance?

Start: 2024-09-20. End: 2027-12-31.

What is the track record of Preferred Electric, LLC with federal contracts?

Information regarding Preferred Electric, LLC's specific track record with federal contracts is not detailed in the provided data. A comprehensive review would involve searching federal procurement databases like SAM.gov or FPDS to identify past performance, contract types, values, and any reported issues or successes. Understanding their history with similar-sized projects and government agencies is crucial for assessing their capability and reliability in executing this $4.85 million contract effectively and on time.

How does the $4.85 million contract value compare to similar electrical repair projects?

The $4.85 million contract value for electrical deficiencies repair and design-build services is a significant investment. To benchmark its value, one would compare it to similar definitive contracts awarded by the Department of Veterans Affairs or other federal agencies for electrical system upgrades or repairs in facilities of comparable size and complexity. Factors such as geographic location (labor costs), the specific nature of the deficiencies (e.g., code compliance, system modernization), and the inclusion of design-build services influence project costs. Without specific comparable data, it's difficult to definitively state if this represents excellent or fair value, but it appears within a reasonable range for substantial electrical work.

What are the primary risks associated with this firm fixed-price contract?

The primary risk with a firm fixed-price (FFP) contract, especially one involving design-build elements, is the potential for the contractor to cut corners on quality or scope to maintain profitability if unforeseen issues arise or costs escalate beyond their initial estimates. For the government, the risk is receiving a lower-quality outcome if the contractor prioritizes cost savings over adherence to specifications. Effective oversight, clear performance metrics, and robust quality assurance processes are essential to mitigate these risks and ensure the project meets all requirements.

How effective is 'Full and Open Competition After Exclusion of Sources' in ensuring competitive pricing?

'Full and Open Competition After Exclusion of Sources' is intended to maximize competition by allowing all responsible sources to submit offers. The 'after exclusion of sources' part implies that certain sources might have been excluded based on specific criteria, which should be justified. When executed properly, this approach fosters a competitive environment, driving down prices and improving the quality of goods or services offered. However, the effectiveness hinges on the number of actual bidders and the rigor of the evaluation process. If only a few bids are received, or if the exclusions were not well-justified, the competitive benefit might be diminished.

What is the historical spending pattern for electrical contractors by the Department of Veterans Affairs?

Historical spending by the Department of Veterans Affairs (VA) on electrical contractors is substantial, reflecting the ongoing need to maintain and upgrade electrical infrastructure across its numerous healthcare facilities and administrative buildings. The VA frequently procures services for electrical repairs, system modernizations, and new installations. Annual spending can fluctuate based on major renovation projects, compliance upgrades (e.g., related to life safety codes), and the age of its facilities. Analyzing past VA contract awards for similar electrical work can provide benchmarks for pricing, contract types, and typical project durations.

What are the implications of a 1197-day performance period for this contract?

A performance period of 1197 days, approximately 3.3 years, indicates a substantial project scope that requires extended execution. This duration allows for thorough planning, design, procurement, and execution of complex electrical work, potentially including phased construction or integration with ongoing facility operations. For the government, it offers a longer timeframe to manage the project and ensure quality. For the contractor, it provides a stable revenue stream but also requires sustained resource allocation and project management over an extended period. It suggests the project is not a simple repair but likely involves significant upgrades or system overhauls.

Industry Classification

NAICS: Construction › Building Equipment Contractors › Electrical Contractors and Other Wiring Installation 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: 36C26324R0057

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2825 N 2ND ST, MINNEAPOLIS, MN, 55411

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

Financial Breakdown

Contract Ceiling: $4,849,641

Exercised Options: $4,849,641

Current Obligation: $4,849,641

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline