VA awards $45M contract for welding equipment, highlighting long-term support needs

Contract Overview

Contract Amount: $44,987,498 ($45.0M)

Contractor: Cornerstone Automation Systems LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2013-05-01

End Date: 2021-12-22

Contract Duration: 3,157 days

Daily Burn Rate: $14.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: MURFREESBORO APFS

Place of Performance

Location: MURFREESBORO, RUTHERFORD County, TENNESSEE, 37127

State: Tennessee Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $45.0 million to CORNERSTONE AUTOMATION SYSTEMS LLC for work described as: MURFREESBORO APFS Key points: 1. Contract provides essential welding and soldering equipment, crucial for maintaining VA facilities. 2. The award was made under full and open competition, suggesting a competitive bidding process. 3. A long contract duration of over 8 years indicates a need for sustained support and reliability. 4. The fixed-price nature of the contract helps in managing budget predictability. 5. The contractor, Cornerstone Automation Systems LLC, has secured a significant award from the VA. 6. The contract's value is substantial, reflecting the scale of VA's operational requirements.

Value Assessment

Rating: good

The contract value of approximately $45 million over its duration appears reasonable for specialized welding and soldering equipment, especially considering the extended period of performance. Benchmarking against similar long-term equipment supply contracts for federal agencies would provide a clearer picture of value for money. The firm fixed-price structure suggests that the contractor bears the risk of cost overruns, which is generally favorable for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. With three bidders participating, the competition level suggests a healthy market for this type of specialized equipment. The presence of multiple bidders generally leads to better price discovery and potentially more favorable pricing for the government.

Taxpayer Impact: The full and open competition ensures that taxpayer dollars are used efficiently by leveraging market forces to secure competitive pricing for essential welding and soldering equipment.

Public Impact

Veterans Affairs facilities nationwide will benefit from reliable access to welding and soldering equipment. This contract ensures the continuous operation and maintenance of critical VA infrastructure. The availability of this equipment supports the skilled trades workforce within the VA. Geographic impact is national, as VA facilities across the country rely on such supplies.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration could lead to potential price increases over time if not managed carefully.
Dependence on a single contractor for an extended period might limit flexibility in adopting newer technologies.

Positive Signals

Awarded under full and open competition, indicating a robust bidding process.
Firm fixed-price contract provides cost certainty for the government.
The contract supports essential operational needs of the VA, ensuring facility maintenance.

Sector Analysis

The market for welding and soldering equipment is diverse, encompassing manufacturers and distributors of specialized tools and consumables. Federal agencies, particularly those with extensive infrastructure like the VA, represent a significant customer base. This contract fits within the broader category of industrial equipment and supplies, where long-term agreements are common for ensuring consistent availability and maintenance support. Comparable spending benchmarks would likely be found within other large federal agencies requiring similar operational equipment.

Small Business Impact

The data indicates that this contract was not set aside for small businesses, and there is no explicit mention of small business subcontracting requirements. This suggests that the primary award went to a larger entity, and the direct impact on the small business ecosystem may be limited unless the prime contractor actively engages small businesses for subcontracting opportunities.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Veterans Affairs' contracting and program management offices. Accountability measures are inherent in the firm fixed-price contract structure, requiring the contractor to deliver specified goods. Transparency is generally maintained through contract award databases, though specific performance metrics and oversight activities may not be publicly detailed.

Related Government Programs

VA Facilities Maintenance Contracts
Federal Procurement of Industrial Equipment
Defense Logistics Agency (DLA) Equipment Contracts
General Services Administration (GSA) Schedules

Risk Flags

Long contract duration may increase risk of technological obsolescence.
Potential for price increases over the contract term.
Dependence on a single supplier for an extended period.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $45.0 million to CORNERSTONE AUTOMATION SYSTEMS LLC. MURFREESBORO APFS

Who is the contractor on this award?

The obligated recipient is CORNERSTONE AUTOMATION SYSTEMS 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 $45.0 million.

What is the period of performance?

Start: 2013-05-01. End: 2021-12-22.

What is the track record of Cornerstone Automation Systems LLC with federal contracts, particularly with the Department of Veterans Affairs?

Cornerstone Automation Systems LLC has secured this definitive contract valued at approximately $45 million from the Department of Veterans Affairs. Further analysis of federal procurement databases would be necessary to determine the full extent of their contract history with the VA and other federal agencies. This includes examining past performance, any reported issues or disputes, and the types of goods or services they have previously provided. Understanding their historical performance is crucial for assessing their reliability and capability in fulfilling this current long-term requirement.

How does the awarded price compare to market rates for similar welding and soldering equipment over an 8-year period?

A precise comparison of the awarded price to market rates requires detailed specifications of the welding and soldering equipment procured. However, the contract's firm fixed-price nature over a long duration (over 8 years) suggests an attempt to lock in pricing. Benchmarking would involve analyzing pricing data from similar long-term federal supply contracts or commercial agreements for comparable equipment. Factors such as volume discounts, inflation adjustments (if any), and the inclusion of maintenance or support services would significantly influence the overall value. Without specific product details, a definitive value assessment is challenging, but the competitive bidding process aims to achieve a fair market price.

What are the primary risks associated with a long-term definitive contract for equipment supply?

The primary risks associated with a long-term definitive contract for equipment supply include potential price escalation beyond initial estimates due to market fluctuations, technological obsolescence of the equipment over the contract's lifespan, and contractor performance issues that could disrupt supply chains. For the government, there's also the risk of being locked into a contract that may become less advantageous over time compared to newer procurement options or technologies. Ensuring robust contract management, performance monitoring, and clear clauses for addressing obsolescence or performance failures are critical mitigation strategies.

How effective is the firm fixed-price contract type in ensuring value for money for this specific VA requirement?

The firm fixed-price (FFP) contract type is generally considered effective for ensuring value for money when the scope of work and requirements are well-defined, as is typical for equipment supply. It shifts the risk of cost overruns to the contractor, incentivizing them to manage costs efficiently. For the VA's need for welding and soldering equipment, an FFP contract provides budget certainty and predictability. The effectiveness hinges on the initial price negotiation and the clarity of the specifications to prevent scope creep or disputes that could undermine the fixed-price benefit. Given the long duration, the initial pricing must adequately account for potential market changes.

What is the historical spending pattern of the VA on welding and soldering equipment, and how does this award fit in?

Analyzing the VA's historical spending on welding and soldering equipment would reveal trends in procurement volume, contract types, and average award values. This $45 million award over more than 8 years suggests a significant, long-term commitment to ensuring a consistent supply of this equipment. It may indicate a shift towards longer-term, strategic sourcing for critical operational supplies, potentially consolidating previous, smaller contracts. Understanding past spending patterns can help assess whether this award represents an increase, decrease, or stable level of investment in this category and whether it aligns with the VA's overall budget and strategic priorities for facility maintenance and operations.

What are the implications of awarding a definitive contract versus using other contract vehicles like GSA Schedules for this type of equipment?

Awarding a definitive contract, especially one competed fully and openly, allows for tailored terms and conditions specific to the VA's unique requirements for welding and soldering equipment, potentially leading to better pricing and service agreements than might be available through pre-negotiated GSA Schedules. However, GSA Schedules offer faster procurement timelines and pre-vetted vendors, which can be advantageous for less complex or urgent needs. For a large, long-term requirement like this, a dedicated definitive contract allows for more direct negotiation and oversight, potentially maximizing value and ensuring specific performance standards are met, albeit with a longer acquisition process.

Industry Classification

NAICS: Manufacturing › Other General Purpose Machinery Manufacturing › Welding and Soldering Equipment Manufacturing

Product/Service Code: SPECIAL INDUSTRY MACHINERY

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: VA-797M-11-RP-0200

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 10351 HOME RD, FRISCO, TX, 75033

Business Categories: Category Business, Limited Liability Corporation, Manufacturer of Goods, Partnership or Limited Liability Partnership, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $94,973,130

Exercised Options: $94,973,130

Current Obligation: $44,987,498

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Timeline