VA awards $18.4M contract for Salem Medical Center utility plant upgrade to A Vet Communications, Inc

Contract Overview

Contract Amount: $18,388,453 ($18.4M)

Contractor: A VET Communications, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2015-09-11

End Date: 2025-11-07

Contract Duration: 3,710 days

Daily Burn Rate: $5.0K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: IGF::OT::IGF UPGRADE UTILITY PLANT AT THE SALEM VIRGINIA VETERANS AFFAIRS MEDICAL CENTER.

Place of Performance

Location: SALEM, SALEM County, VIRGINIA, 24153

State: Virginia Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $18.4 million to A VET COMMUNICATIONS, INC. for work described as: IGF::OT::IGF UPGRADE UTILITY PLANT AT THE SALEM VIRGINIA VETERANS AFFAIRS MEDICAL CENTER. Key points: 1. Contract awarded for essential infrastructure upgrade at a major medical facility. 2. Definitive contract type suggests a long-term relationship for services. 3. Fixed-price contract structure aims to control costs for the government. 4. Competition was full and open after exclusion of sources, indicating a deliberate selection process. 5. The contract duration of over 10 years highlights the scale and complexity of the project. 6. The project is located in Virginia, potentially impacting the local construction and maintenance workforce.

Value Assessment

Rating: good

The contract value of $18.4 million for a utility plant upgrade appears reasonable given the 10-year duration and the critical nature of the services. Benchmarking against similar large-scale facility upgrades for federal medical centers would provide a more precise value-for-money assessment. The firm-fixed-price structure is generally favorable for cost control on construction projects of this nature. However, without specific details on the scope of work and materials, a definitive comparison to market rates is challenging.

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.' This indicates that while the competition was intended to be broad, specific sources may have been excluded based on predefined criteria, possibly related to specialized capabilities or past performance. The presence of 4 bids suggests a moderate level of competition, which is generally positive for price discovery and ensuring the government receives competitive offers.

Taxpayer Impact: A competitive bidding process, even with exclusions, generally leads to better pricing for taxpayers compared to sole-source awards. The fact that multiple companies submitted bids suggests that the contract requirements were clear enough to attract interest and that the award was likely made to the most advantageous offer.

Public Impact

Veterans receiving care at the Salem Virginia Medical Center will benefit from improved facility reliability and potentially enhanced environmental controls. The contract delivers essential infrastructure maintenance and upgrade services for a critical federal healthcare facility. The geographic impact is concentrated in Salem, Virginia, supporting local economic activity through construction and related services. The project will likely involve a workforce of skilled tradespeople and construction professionals in the Virginia area.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (over 10 years) could lead to scope creep or cost overruns if not managed meticulously.
Potential for unforeseen issues in aging utility infrastructure requiring additional funding or change orders.
Dependence on a single contractor for an extended period may reduce flexibility in adopting new technologies or approaches.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Award to a specific company (A Vet Communications, Inc.) suggests they met stringent technical and performance requirements.
The project addresses critical infrastructure needs, ensuring operational continuity for a vital medical center.

Sector Analysis

This contract falls within the construction and facilities management sector, specifically for institutional buildings. The market for upgrading and maintaining large federal medical facilities is specialized, often requiring significant experience with government regulations and complex systems. Comparable spending benchmarks would involve looking at other large-scale HVAC, plumbing, and electrical system upgrades in federal buildings, particularly healthcare-focused ones, to assess the relative cost-effectiveness of this award.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). Therefore, the primary impact on small businesses would be through potential subcontracting opportunities if A Vet Communications, Inc. utilizes them. Without specific subcontracting plans, it's difficult to assess the direct benefit to the small business ecosystem from this particular award, though larger prime contractors often engage small businesses for specialized trades.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Veterans Affairs (VA) contracting officers and program managers. The VA has an Office of Inspector General (OIG) that conducts audits and investigations into VA programs and contracts to ensure accountability and prevent fraud, waste, and abuse. Transparency is facilitated through contract databases like FPDS, which provide public access to contract details, though detailed performance reports may not always be publicly available.

Related Government Programs

VA Medical Facility Construction and Renovation
Federal Building Infrastructure Modernization
Utility Plant Operations and Maintenance
Definitive Contracts for Services

Risk Flags

Long contract duration may increase risk of cost overruns or obsolescence.
Potential for unforeseen issues in aging infrastructure.
Competition level, while present, was narrowed by source exclusion.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $18.4 million to A VET COMMUNICATIONS, INC.. IGF::OT::IGF UPGRADE UTILITY PLANT AT THE SALEM VIRGINIA VETERANS AFFAIRS MEDICAL CENTER.

Who is the contractor on this award?

The obligated recipient is A VET COMMUNICATIONS, 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 $18.4 million.

What is the period of performance?

Start: 2015-09-11. End: 2025-11-07.

What is the specific scope of work for the utility plant upgrade at the Salem Virginia Medical Center?

The provided data indicates the contract is for the 'IGF::OT::IGF UPGRADE UTILITY PLANT AT THE SALEM VIRGINIA VETERANS AFFAIRS MEDICAL CENTER.' While the exact scope is not detailed, utility plant upgrades typically encompass improvements to heating, ventilation, and air conditioning (HVAC) systems, electrical distribution, plumbing, and potentially backup power generation. Given the 10-year duration, it likely involves a comprehensive overhaul or modernization of these critical systems to ensure reliability, efficiency, and compliance with current standards for a large medical facility. Further details would be found in the contract's statement of work.

How does the $18.4 million contract value compare to similar utility plant upgrades at VA medical centers?

Benchmarking the $18.4 million contract value requires comparing it to similar projects at other VA medical centers or comparable federal healthcare facilities. Factors such as the size of the facility, the age of the existing infrastructure, the specific systems being upgraded (e.g., HVAC, electrical, plumbing, steam), and the duration of the contract significantly influence cost. A 10-year duration for a comprehensive upgrade suggests a substantial project. Without access to a database of comparable VA utility plant upgrade contracts, a precise comparison is difficult. However, large-scale infrastructure projects for federal medical centers can range from several million to tens of millions of dollars, making this award appear within a plausible range for a multi-year, comprehensive upgrade.

What are the potential risks associated with a 10-year definitive contract for utility plant upgrades?

A significant risk with a 10-year definitive contract is the potential for cost escalation due to unforeseen issues that arise over such a long period. Aging infrastructure can hide problems not apparent during initial assessments, leading to change orders and increased costs. There's also a risk of technological obsolescence; systems installed early in the contract might be outdated by the time the contract concludes. Furthermore, a long-term commitment to a single contractor might reduce the agency's flexibility to adapt to new technologies or changing operational needs. Effective project management, clear contract terms, and regular performance reviews are crucial to mitigate these risks.

What is the track record of A Vet Communications, Inc. with VA contracts?

Information on A Vet Communications, Inc.'s specific track record with the VA is not detailed in the provided data snippet. To assess their performance, one would need to examine their contract history with the VA, looking at past projects of similar scope and value, their performance ratings, and any history of disputes or contract modifications. A positive performance history on previous VA contracts, particularly those involving facility maintenance or construction, would suggest a lower risk for this new award. Conversely, a history of issues could indicate potential performance concerns.

How does the 'full and open competition after exclusion of sources' procurement method impact cost and competition?

The 'full and open competition after exclusion of sources' method aims to balance broad competition with the need for specialized capabilities. It means the solicitation was publicly advertised, but the agency reserved the right to exclude certain sources based on specific criteria outlined in the solicitation (e.g., minimum experience, specific certifications, past performance). This can limit the number of bidders compared to unrestricted full and open competition. While it can ensure that only qualified contractors participate, potentially leading to better technical solutions, it might also reduce the number of competitive offers, potentially impacting price discovery. The presence of 4 bids suggests a reasonable level of competition was maintained despite the source exclusion.

What are the implications of this contract being a Firm Fixed Price (FFP) type?

A Firm Fixed Price (FFP) contract is generally the preferred type for construction and services where the scope of work is well-defined and risks are understood. Under an FFP contract, the contractor agrees to perform the work for a predetermined price, regardless of their actual costs. This shifts the cost risk from the government to the contractor. For the VA, this offers significant cost certainty and predictability, making budgeting easier. It incentivizes the contractor to manage their costs efficiently to maximize profit. However, if unforeseen issues arise that are outside the contractor's control and not covered by contract clauses, the VA might face challenges in addressing necessary scope changes without potentially renegotiating the price.

Industry Classification

NAICS: Construction › Nonresidential Building Construction › Commercial and Institutional Building Construction

Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCTION OF BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SEALED BID

Solicitation ID: VA246-15-B-0371

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 944 N. DAMEN AVE, CHICAGO, IL, 60622

Business Categories: Category Business, Corporate Entity Not Tax Exempt, DoT Certified Disadvantaged Business Enterprise, Hispanic American Owned Business, Minority Owned Business, 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: $18,388,453

Exercised Options: $18,388,453

Current Obligation: $18,388,453

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline