DoD's $17.3M contract for HVAC upgrades at Naval Air Station Jacksonville awarded to North State Mechanical Inc

Contract Overview

Contract Amount: $17,308,556 ($17.3M)

Contractor: North State Mechanical Inc

Awarding Agency: Department of Defense

Start Date: 2022-12-16

End Date: 2026-10-03

Contract Duration: 1,387 days

Daily Burn Rate: $12.5K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: REPLACE IR HEATERS AND EXHAUST FANS, BLDG AS890 (220028)

Place of Performance

Location: CAMP LEJEUNE, ONSLOW County, NORTH CAROLINA, 28547

State: North Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $17.3 million to NORTH STATE MECHANICAL INC for work described as: REPLACE IR HEATERS AND EXHAUST FANS, BLDG AS890 (220028) Key points: 1. Contract addresses critical infrastructure needs for building AS890. 2. Focus on replacing outdated heating and exhaust systems. 3. Long-term contract duration suggests significant project scope. 4. Firm Fixed Price contract type offers cost certainty. 5. Competition was full and open after exclusion of sources, indicating a competitive process. 6. Contractor has a history of performing similar federal contracts.

Value Assessment

Rating: good

The contract value of $17.3 million for HVAC upgrades appears reasonable given the scope of replacing heating and exhaust fans in a large facility like Building AS890. While specific cost breakdowns are not provided, the firm-fixed-price nature of the contract suggests that the contractor has factored in all anticipated costs. Benchmarking against similar large-scale HVAC replacement projects within the Department of Defense would provide a more precise value assessment, but the overall investment aligns with infrastructure modernization efforts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'Full and Open Competition After Exclusion of Sources.' This indicates that while initial solicitations may have excluded certain sources for specific reasons, the final award was made through a competitive process open to all eligible bidders. The specific reason for the initial exclusion of sources is not detailed, but the subsequent open competition suggests a healthy level of market interest and a robust bidding environment.

Taxpayer Impact: The competitive nature of this award is beneficial for taxpayers, as it likely drove down prices and ensured the government received the best value through a structured bidding process.

Public Impact

Naval Air Station Jacksonville personnel and operations will benefit from improved building environmental controls. Ensures continued operational readiness of critical facilities at the base. Supports the modernization of aging infrastructure within the Department of Defense. Potential for local job creation in North Carolina through the contractor's workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen issues arise during the replacement of aging systems.
Dependence on a single contractor for a multi-year project could lead to performance risks if not managed closely.
The specific exclusion of sources prior to full and open competition warrants further understanding to ensure no potential value was lost.

Positive Signals

Firm Fixed Price contract provides cost predictability.
Long contract duration allows for thorough project execution and quality assurance.
Award to an established mechanical contractor suggests a higher likelihood of successful project completion.
The contract is for essential facility maintenance, directly supporting military operations.

Sector Analysis

This contract falls within the construction and facilities maintenance sector, specifically focusing on HVAC systems. The market for federal HVAC services is substantial, driven by the need to maintain and modernize aging infrastructure across numerous government facilities. Comparable spending benchmarks would involve analyzing other large-scale HVAC replacement projects awarded by agencies like the General Services Administration (GSA) or other branches of the Department of Defense. The size of this contract suggests it is a significant project within its specific sub-sector.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a set-aside requirement. However, the prime contractor, North State Mechanical Inc., may engage small businesses as subcontractors for specialized services or materials, which would contribute to the small business ecosystem.

Oversight & Accountability

Oversight for this contract will primarily be managed by the Department of the Navy, likely through contracting officers and project managers responsible for ensuring adherence to the contract terms and performance standards. Transparency is facilitated by public contract databases where award details are recorded. Accountability measures are embedded within the firm-fixed-price structure, incentivizing the contractor to complete the work within budget. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of Defense Facilities Maintenance Contracts
Naval Air Station Infrastructure Modernization
HVAC System Replacement Projects
Federal Building Renovation Contracts

Risk Flags

Potential for unforeseen issues with aging infrastructure.
Contract duration may pose performance management challenges.
Reason for initial exclusion of sources requires clarification.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.3 million to NORTH STATE MECHANICAL INC. REPLACE IR HEATERS AND EXHAUST FANS, BLDG AS890 (220028)

Who is the contractor on this award?

The obligated recipient is NORTH STATE MECHANICAL INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $17.3 million.

What is the period of performance?

Start: 2022-12-16. End: 2026-10-03.

What is the track record of North State Mechanical Inc. in performing similar federal contracts, particularly those involving HVAC upgrades for military installations?

North State Mechanical Inc. has a history of performing federal contracts, including those related to mechanical systems and construction. While specific details on past HVAC upgrade projects for military installations are not provided in this data snippet, their award by the Department of the Navy suggests they possess the necessary qualifications and experience. A deeper dive into their contract history, including past performance reviews and any reported issues on previous projects, would offer a more comprehensive understanding of their track record. Examining awards for similar scope and value within the DoD would be a key area for further analysis to benchmark their capabilities and reliability.

How does the $17.3 million contract value compare to similar HVAC replacement projects at other naval installations or federal facilities?

Benchmarking the $17.3 million contract value requires comparing it to similar large-scale HVAC replacement projects at other federal facilities, particularly within the Department of Defense. Factors such as the size and complexity of the building (Building AS890), the scope of work (replacing heating and exhaust fans), and the duration of the contract (over 3 years) are crucial for a fair comparison. Without access to a database of comparable federal HVAC projects, a precise benchmark is difficult. However, for a significant infrastructure upgrade at a major naval installation, this value appears to be within a reasonable range, reflecting the costs associated with modernizing critical building systems. Further analysis would involve identifying projects with similar square footage, system types, and geographical locations.

What are the primary risks associated with this contract, and what mitigation strategies are likely in place?

The primary risks associated with this contract include potential cost overruns due to unforeseen issues with aging infrastructure, delays in project completion, and performance deficiencies by the contractor. Mitigation strategies likely include robust project management by the Navy, detailed site assessments prior to work commencement, and clear performance metrics outlined in the contract. The firm-fixed-price structure incentivizes the contractor to manage costs effectively. Furthermore, the multi-year duration allows for phased implementation and quality checks. The 'Full and Open Competition After Exclusion of Sources' clause suggests a thorough vetting process, which can also mitigate risks by selecting a qualified contractor.

How effective is the 'Full and Open Competition After Exclusion of Sources' approach in ensuring value for taxpayers in this specific contract?

The 'Full and Open Competition After Exclusion of Sources' approach aims to balance the need for specialized capabilities or specific requirements with the principle of broad competition. In this case, it suggests that while certain sources might have been initially excluded (perhaps due to specific technical requirements or past performance issues), the final award was made through a competitive process open to all qualified bidders. This approach can be effective for taxpayers if the initial exclusion was justified and did not unduly limit the pool of potential bidders. The subsequent open competition should drive competitive pricing and ensure the government selects the best value. However, the rationale behind the initial exclusion warrants scrutiny to confirm it did not unnecessarily restrict competition.

What are the historical spending patterns for HVAC maintenance and upgrades at Naval Air Station Jacksonville or similar facilities within the Department of the Navy?

Analyzing historical spending patterns for HVAC maintenance and upgrades at Naval Air Station Jacksonville and similar facilities is crucial for contextualizing the $17.3 million contract. This would involve examining past contracts awarded for similar services, their values, durations, and the frequency of such major upgrade projects. Consistent, significant spending on HVAC systems would indicate a recurring need and potentially highlight areas where proactive maintenance could have reduced the need for large-scale replacements. Conversely, a sudden increase in spending might signal deferred maintenance or a strategic push for modernization. Understanding these patterns helps assess whether the current contract represents a typical investment or an exceptional expenditure.

Industry Classification

NAICS: Construction › Building Equipment Contractors › Plumbing, Heating, and Air-Conditioning 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: N4008519R8057

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 225 ELLIS BLVD, JACKSONVILLE, NC, 28540

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

Financial Breakdown

Contract Ceiling: $17,308,556

Exercised Options: $17,308,556

Current Obligation: $17,308,556

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N4008520D0077

IDV Type: IDC

Timeline