VA awards $13.6M for energy services, but contract was not competed, raising value concerns

Contract Overview

Contract Amount: $13,565,819 ($13.6M)

Contractor: Honeywell Building Solutions SES Corp

Awarding Agency: Department of Veterans Affairs

Start Date: 2007-10-11

End Date: 2011-12-30

Contract Duration: 1,541 days

Daily Burn Rate: $8.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: ENERGY SERVICES

Place of Performance

Location: TAMPA, HILLSBOROUGH County, FLORIDA, 33601

State: Florida Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $13.6 million to HONEYWELL BUILDING SOLUTIONS SES CORP for work described as: ENERGY SERVICES Key points: 1. Contract awarded without competition limits price discovery and potentially increases costs. 2. Long contract duration of 1541 days suggests a need for ongoing services. 3. Firm Fixed Price contract type offers cost certainty but may not incentivize efficiency. 4. The contract's value is significant, warranting scrutiny of its necessity and cost-effectiveness. 5. Awarded to Honeywell Building Solutions SES Corp, a single vendor, limiting market options. 6. The lack of competition is a key risk indicator for potential overpayment.

Value Assessment

Rating: questionable

Benchmarking the value of this $13.6 million contract is challenging due to the lack of competitive bidding. Without comparable offers, it's difficult to ascertain if the pricing reflects fair market value. The firm fixed-price structure provides cost predictability, but the absence of competition means there's no direct market pressure to ensure optimal value for the taxpayer. Further analysis would require comparing the services rendered and their outcomes against industry standards or similar, competitively awarded contracts.

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. This approach bypasses the standard procurement process where multiple vendors submit bids. While sole-source awards can be justified in specific circumstances (e.g., unique capabilities, urgent needs), they inherently limit the government's ability to leverage competition to drive down prices and ensure the best possible value. The absence of bidders means the government did not benefit from a range of proposals and pricing strategies.

Taxpayer Impact: Sole-source awards mean taxpayers may not be getting the most cost-effective solution, as the potential for competitive pricing was not explored.

Public Impact

The Department of Veterans Affairs benefits from essential energy services to maintain its facilities. This contract supports the operational continuity of VA facilities in Florida. The services likely contribute to energy efficiency and cost savings for the agency. Workforce implications are tied to the contractor's personnel performing these specialized services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated prices.
Sole-source award raises questions about the necessity of this specific vendor.
Long contract duration without competition could indicate a missed opportunity for re-evaluation.
Firm fixed price may not incentivize contractor innovation or efficiency improvements.

Positive Signals

Contract provides essential energy services to a critical government agency.
Firm fixed price offers budget certainty for the VA.
Awarded to a known entity, potentially indicating established performance history.

Sector Analysis

The energy services sector encompasses a wide range of activities aimed at improving energy efficiency, managing energy consumption, and ensuring reliable energy supply for facilities. This contract falls within the broader category of facility management and operational support services. The market for energy services is competitive, with many firms offering specialized solutions. However, government procurement processes, especially sole-source awards, can limit the exposure of agencies to this full market potential.

Small Business Impact

There is no indication that this contract included small business set-asides or subcontracting requirements. The award was made to a single, presumably larger, entity. This means that opportunities for small businesses to participate in this specific contract are likely limited, unless they are subcontractors to the prime awardee. Further investigation would be needed to determine if any small business utilization plans were part of the award.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Veterans Affairs' contracting officers and program managers. The firm fixed-price nature provides some level of financial oversight by ensuring costs are capped. However, the lack of competition limits the effectiveness of oversight in ensuring the best possible price. Transparency is moderate, as contract awards are generally public, but the rationale for a sole-source award may not always be fully detailed publicly.

Related Government Programs

Department of Veterans Affairs Facility Management Contracts
Federal Energy Efficiency Programs
Government Building Operations and Maintenance

Risk Flags

Sole-source award
Lack of competition
Potential for overpayment
Limited market exploration

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $13.6 million to HONEYWELL BUILDING SOLUTIONS SES CORP. ENERGY SERVICES

Who is the contractor on this award?

The obligated recipient is HONEYWELL BUILDING SOLUTIONS SES CORP.

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 $13.6 million.

What is the period of performance?

Start: 2007-10-11. End: 2011-12-30.

What is the track record of Honeywell Building Solutions SES Corp with the Department of Veterans Affairs?

Honeywell Building Solutions SES Corp has a history of contracts with the Department of Veterans Affairs. While this specific $13.6 million contract was sole-sourced, the agency likely has awarded other contracts to this vendor in the past, potentially for similar services. Analyzing past performance, including any quality issues, delivery timeliness, and overall satisfaction ratings from previous VA engagements, would provide crucial context. A review of the Federal Procurement Data System (FPDS) or other government contract databases could reveal the extent and nature of their prior work with the VA, helping to assess if their past performance justifies a sole-source award or if it indicates a pattern of non-competitive awards.

How does the $13.6 million value compare to similar energy service contracts awarded by the VA or other federal agencies?

Comparing the $13.6 million value of this contract to similar energy service contracts is difficult without knowing the specific scope of services and duration. However, for a contract spanning over 1500 days, this value suggests a substantial investment in energy management or infrastructure. If this contract was competitively bid, one would expect to see a range of proposals. As a sole-source award, its value is harder to benchmark against market rates. Generally, larger contracts can offer economies of scale, but without competition, there's a risk of paying a premium. A thorough comparison would involve identifying contracts with similar service requirements (e.g., HVAC upgrades, energy monitoring systems, power distribution maintenance) and analyzing their total value and per-year cost, ideally from competitively awarded procurements.

What are the primary risks associated with awarding a contract of this magnitude without competition?

The primary risks associated with awarding a $13.6 million contract without competition are significant. Firstly, the government likely overpaid because it did not benefit from the price reductions that competition typically drives. Secondly, there's a risk that the chosen vendor, Honeywell Building Solutions SES Corp, may not be the most innovative or capable provider available in the market, as other potential vendors were not given the opportunity to propose their solutions. Thirdly, the lack of a competitive process can reduce transparency and accountability, making it harder to justify the expenditure to taxpayers. Finally, it could set a precedent for future non-competitive awards, potentially eroding the effectiveness of the government's procurement system.

What specific energy services are being provided under this contract, and how do they contribute to the VA's mission?

The data indicates this contract is for 'Electric Power Distribution' and general 'ENERGY SERVICES'. This likely encompasses a range of activities critical to the operation of Department of Veterans Affairs facilities, such as maintaining and upgrading electrical infrastructure, ensuring reliable power supply, and potentially implementing energy efficiency measures. Reliable power is fundamental for healthcare operations, including life support systems, medical equipment, and facility climate control. By ensuring the efficient and consistent delivery of energy, this contract directly supports the VA's mission to provide healthcare services to veterans, ensuring that facilities are operational and safe at all times.

What is the historical spending pattern for energy services by the Department of Veterans Affairs, and how does this contract fit in?

Historical spending data for energy services by the Department of Veterans Affairs would reveal the agency's commitment to managing its energy consumption and infrastructure. This $13.6 million contract, awarded in 2007 and ending in 2011, represents a significant investment over its duration. Analyzing VA's broader spending trends in this category—whether it has increased or decreased over time, and the proportion of competitively vs. non-competitively awarded contracts—would provide context. This specific contract's sole-source nature suggests it might be part of a larger strategy or a response to a specific, perhaps urgent, need that the VA perceived as only addressable by Honeywell. Understanding this pattern helps assess if this was an anomaly or indicative of a broader procurement approach.

Industry Classification

NAICS: Utilities › Electric Power Generation, Transmission and Distribution › Electric Power Distribution

Product/Service Code: QUALITY CONTROL, TEST, INSPECTION › OTHER QUALITY, TEST, INSPECT SVCS

Competition & Pricing

Extent Competed: NOT COMPETED

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Parent Company: Honeywell International Inc (UEI: 139691877)

Address: 1250 W SAM HOUSTON PKWY S, HOUSTON, TX, 90

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

Financial Breakdown

Contract Ceiling: $13,565,819

Exercised Options: $13,565,819

Current Obligation: $13,565,819

Parent Contract

Parent Award PIID: DACA8797D0066

IDV Type: IDC

Timeline