DoD's $5.75M UPS replacement contract awarded to Heritage Homes LLC under full and open competition

Contract Overview

Contract Amount: $5,749,923 ($5.7M)

Contractor: Heritage Homes LLC

Awarding Agency: Department of Defense

Start Date: 2026-01-17

End Date: 2027-06-10

Contract Duration: 509 days

Daily Burn Rate: $11.3K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: THE PURPOSE OF THE PROJECT IS TO REPLACE THE EXISTING UNINTERRUPTABLE POWER SYSTEMS (UPSS) WITH DISTRIBUTED REDUNDANT UPSS.

Place of Performance

Location: FORT GREELY, SOUTHEAST FAIRBANKS County, ALASKA, 99731

State: Alaska Government Spending

Plain-Language Summary

Department of Defense obligated $5.7 million to HERITAGE HOMES LLC for work described as: THE PURPOSE OF THE PROJECT IS TO REPLACE THE EXISTING UNINTERRUPTABLE POWER SYSTEMS (UPSS) WITH DISTRIBUTED REDUNDANT UPSS. Key points: 1. The contract aims to upgrade critical power infrastructure, enhancing operational resilience. 2. Awarded through full and open competition, suggesting a competitive bidding process. 3. The definitive contract type with a firm fixed price indicates defined scope and cost certainty. 4. The project duration of approximately 509 days suggests a significant but manageable undertaking. 5. The contract is for construction services related to power and communication lines. 6. The geographic location in Alaska may present unique logistical and environmental challenges.

Value Assessment

Rating: fair

The contract value of $5.75 million for replacing uninterruptible power systems (UPS) appears reasonable for a project of this nature, especially considering the location in Alaska which often incurs higher costs for construction and materials. Benchmarking against similar federal projects for power infrastructure upgrades in remote or challenging environments would provide a more precise value assessment. The firm fixed-price structure helps control costs, but the absence of detailed cost breakdowns makes a granular value-for-money assessment difficult without further data.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition After Exclusion of Sources,' which is an unusual designation. Typically, 'full and open competition' implies broad solicitation. The 'exclusion of sources' suggests that while competition was sought, certain potential bidders may have been excluded for specific reasons, possibly related to technical qualifications or prior performance. With only two bids received, the level of competition might be considered moderate rather than robust, potentially impacting price discovery.

Taxpayer Impact: The moderate competition level means taxpayers may not have benefited from the lowest possible price achievable through a wider bidding pool. However, the exclusion of sources might have ensured that only qualified bidders participated, potentially reducing risks associated with contractor performance.

Public Impact

Military operations in Alaska will benefit from enhanced power reliability and reduced downtime. The project delivers critical infrastructure construction services, ensuring the continuity of essential functions. The geographic impact is concentrated in Alaska, supporting defense readiness in a strategic region. The contract will likely involve a construction workforce, potentially creating temporary employment opportunities in the local area.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'exclusion of sources' clause in the competition method warrants further investigation to understand the rationale and potential impact on competition.
Limited number of bids (2) received could indicate potential barriers to entry or insufficient market outreach.
The firm fixed-price contract, while offering cost certainty, may not fully capture potential efficiencies if the scope is not precisely defined.
The remote location in Alaska could lead to unforeseen logistical challenges and cost overruns if not adequately managed.

Positive Signals

Awarded under 'Full and Open Competition' signals an intent to leverage market capabilities.
The firm fixed-price contract provides budget predictability for the government.
The definitive contract type allows for flexibility in task orders within the defined scope.
The project addresses a critical need for infrastructure modernization, enhancing operational resilience.

Sector Analysis

This contract falls within the Construction sector, specifically related to power and communication infrastructure. The North American Industry Classification System (NAICS) code 237130, 'Power and Communication Line and Related Structures Construction,' covers the installation of power lines, communication cables, and related structures. Federal spending in this area is crucial for maintaining and upgrading essential infrastructure supporting government operations, particularly in remote or strategically important locations like Alaska. Comparable spending benchmarks would involve analyzing other federal contracts for similar power system installations and upgrades across different agencies and regions.

Small Business Impact

The data indicates that small business participation (ss: false, sb: false) was not a primary focus or requirement for this specific contract. There is no mention of small business set-asides or subcontracting goals. This suggests that the prime contractor, Heritage Homes LLC, is likely a larger entity, and the contract was not specifically structured to benefit small businesses. Consequently, the direct impact on the small business ecosystem from this award is likely minimal, unless the prime contractor voluntarily engages small businesses for subcontracting opportunities.

Oversight & Accountability

Oversight for this contract will likely be managed by the contracting officer and the relevant program officials within the Department of the Army. The firm fixed-price nature of the contract and the definitive contract award type provide a framework for accountability. Transparency is facilitated through contract award databases, but detailed project progress and performance metrics may not be publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.

Related Government Programs

Department of Defense Infrastructure Modernization Programs
Federal Power and Communication Infrastructure Projects
Alaska Military Base Support Contracts
Uninterruptible Power Supply (UPS) System Procurement

Risk Flags

Competition Level: Only two bids received after exclusion of sources.
Geographic Challenges: Project located in Alaska, potentially increasing costs and logistical complexity.
Contract Type Nuance: 'Full and Open Competition After Exclusion of Sources' requires clarification.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $5.7 million to HERITAGE HOMES LLC. THE PURPOSE OF THE PROJECT IS TO REPLACE THE EXISTING UNINTERRUPTABLE POWER SYSTEMS (UPSS) WITH DISTRIBUTED REDUNDANT UPSS.

Who is the contractor on this award?

The obligated recipient is HERITAGE HOMES LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $5.7 million.

What is the period of performance?

Start: 2026-01-17. End: 2027-06-10.

What is the specific rationale behind the 'Full and Open Competition After Exclusion of Sources' designation for this contract?

The designation 'Full and Open Competition After Exclusion of Sources' is unusual and suggests a nuanced approach to competition. Typically, 'full and open competition' means soliciting offers from all responsible sources. The addition of 'after exclusion of sources' implies that while the intent was broad solicitation, certain potential offerors were intentionally excluded from the bidding process. This exclusion could be based on various factors, such as specific technical requirements that only a limited number of firms could meet, past performance issues with certain contractors, or national security considerations. Without further documentation from the contracting agency, the precise reasons for excluding sources remain unclear. This could potentially limit the number of competitive bids received, as was the case here with only two offers, and may impact the final price achieved for the government.

How does the firm fixed-price contract structure mitigate risks for the Department of the Army in this UPS replacement project?

A firm fixed-price (FFP) contract is designed to provide the greatest degree of certainty for the buyer regarding the total cost of the contract. Under an FFP agreement, the contractor, Heritage Homes LLC, assumes the primary responsibility for all costs incurred and for any cost overruns. This means the Department of the Army's financial liability is capped at the agreed-upon contract price of $5.75 million, barring any contract modifications. This structure incentivizes the contractor to manage its costs efficiently and to perform the work within the specified budget. For the Army, this mitigates the financial risk associated with unexpected cost increases that might occur in cost-reimbursement type contracts, making budgeting more predictable. However, it also means the government may not benefit from cost savings if the contractor completes the work under budget.

What are the potential challenges associated with performing construction work for power systems in Alaska, and how might they impact this contract?

Performing construction work in Alaska presents several unique challenges that could impact this UPS replacement project. These include extreme weather conditions, such as severe cold, heavy snowfall, and limited daylight hours during winter months, which can significantly slow down construction schedules and increase labor costs. The remote nature of many locations in Alaska often leads to higher transportation and logistics costs for materials, equipment, and personnel. Furthermore, environmental regulations and the need for specialized construction techniques to address permafrost or sensitive ecosystems can add complexity and cost. For this contract, these factors could potentially lead to schedule delays or increased operational costs for Heritage Homes LLC. While the contract is firm fixed-price, the contractor's ability to accurately estimate and manage these Alaskan-specific challenges will be crucial for their profitability and successful project completion.

Given the contract's focus on replacing UPS systems, what is the expected improvement in operational resilience for the affected Department of the Army facilities?

The replacement of existing Uninterruptible Power Systems (UPS) with distributed redundant UPS is expected to significantly enhance operational resilience for the affected Department of the Army facilities. Existing UPS systems, especially if aging, are prone to failure, which can lead to power disruptions for critical electronic equipment, communication systems, and data centers. Distributed redundant UPS systems provide a more robust and fault-tolerant power infrastructure. 'Redundant' means there are backup systems in place, so if one UPS fails, another can immediately take over without interruption. 'Distributed' suggests that these systems may be spread across different locations or power paths, further reducing the risk of a single point of failure. This upgrade will ensure continuous power supply, protect sensitive equipment from power surges or outages, and maintain the operational readiness of essential military functions, thereby improving overall resilience against power-related disruptions.

What does the definitive contract award type imply about the scope and execution of this project?

A definitive contract is a standard, legally binding agreement that clearly outlines the rights and obligations of both the government and the contractor. In this context, it signifies that the scope of work, terms, conditions, and price for the UPS replacement project have been fully negotiated and finalized. Unlike basic ordering agreements or indefinite-delivery/indefinite-quantity (IDIQ) contracts, which often allow for flexibility and future task orders with less defined initial scopes, a definitive contract typically represents a complete agreement for a specific project or set of services. This implies that the Department of the Army has a clear understanding of the requirements and Heritage Homes LLC has committed to fulfilling them at the stated price and terms. The 'firm fixed price' designation further solidifies the cost certainty associated with this definitive agreement.

Industry Classification

NAICS: Construction › Utility System Construction › Power and Communication Line and Related Structures 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: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W911KB26RA011

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: HC 60 BOX 4690-1, DELTA JUNCTION, AK, 99737

Business Categories: Category Business, HUBZone Firm, Limited Liability Corporation, Partnership or Limited Liability Partnership, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $5,749,923

Exercised Options: $5,749,923

Current Obligation: $5,749,923

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline