DoD awards $13.2M for Cherry Point HVAC, with KGJJ Engineering Solutions securing the prime contract

Contract Overview

Contract Amount: $13,246,229 ($13.2M)

Contractor: Kgjj Engineering Solutions, LLC

Awarding Agency: Department of Defense

Start Date: 2024-09-30

End Date: 2026-08-31

Contract Duration: 700 days

Daily Burn Rate: $18.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: CHERRY POINT HVAC & SPD NTO AWARD LR MATOC

Place of Performance

Location: CHERRY POINT, CRAVEN County, NORTH CAROLINA, 28533

State: North Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $13.2 million to KGJJ ENGINEERING SOLUTIONS, LLC for work described as: CHERRY POINT HVAC & SPD NTO AWARD LR MATOC Key points: 1. The contract value represents a significant investment in facility maintenance and upgrades. 2. KGJJ Engineering Solutions, a relatively new entity, is tasked with critical infrastructure support. 3. The award was made under full and open competition, suggesting a competitive bidding process. 4. The contract duration spans nearly two years, indicating a sustained need for these services. 5. The firm-fixed-price structure aims to control costs and provide predictability. 6. The absence of small business set-aside flags suggests a focus on larger, specialized firms.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without more specific details on the scope of HVAC and SPD services. However, the total award of $13.2 million over approximately two years suggests a substantial project. The firm-fixed-price contract type indicates that the government has a clear understanding of the expected costs, but it also places the risk of cost overruns on the contractor. Further analysis would require comparing the per-unit costs or service rates to similar contracts awarded by the Department of the Army or other branches for comparable facilities.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded using full and open competition, indicating that all responsible sources were permitted to submit a bid. The presence of two bids suggests a moderate level of competition for this specific award. While two bidders is better than a sole-source award, a higher number of bids typically leads to more competitive pricing and a wider range of innovative solutions. The government's ability to secure favorable pricing and terms depends on the specific capabilities and market conditions relevant to HVAC and SPD services at Cherry Point.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down prices and improve service quality. However, with only two bidders, the potential for significant cost savings might be limited compared to scenarios with more robust competition.

Public Impact

The primary beneficiaries are the personnel and operations at the Cherry Point Marine Corps Air Station, ensuring functional and safe facilities. Services delivered include maintenance, repair, and potentially upgrades for Heating, Ventilation, and Air Conditioning (HVAC) systems, as well as Special Purpose Equipment (SPD) support. The geographic impact is localized to the Cherry Point Marine Corps Air Station in North Carolina. The contract supports the operational readiness of the base by maintaining critical infrastructure, indirectly impacting the military workforce stationed there.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition with only two bidders could potentially lead to higher prices than if more firms had participated.
The contractor, KGJJ Engineering Solutions, may have limited historical performance data available for extensive track record analysis.
The scope of 'SPD NTO' is not fully defined, potentially leading to scope creep or unforeseen costs if not managed tightly.

Positive Signals

The award was made under full and open competition, adhering to principles of fair opportunity.
The firm-fixed-price contract type provides cost certainty for the government.
The contract duration of nearly two years allows for sustained support and relationship building with the contractor.

Sector Analysis

The construction and facilities maintenance sector is a significant area of federal spending. This contract falls under the broader category of commercial and institutional building construction and maintenance services. The market for HVAC and specialized equipment support is competitive, with numerous firms capable of performing such work. Federal agencies often rely on Indefinite Delivery/Indefinite Quantity (IDIQ) contracts or similar vehicles to procure these types of services efficiently. The value of this specific award, $13.2 million, is moderate within the context of large-scale federal construction and maintenance projects.

Small Business Impact

This contract was not awarded as a small business set-aside, nor does it appear to have specific subcontracting requirements for small businesses explicitly mentioned in the provided data. This suggests that the primary contractor, KGJJ Engineering Solutions, is either a large business or that the nature of the work did not lend itself to a small business set-aside. The impact on the small business ecosystem is likely minimal unless KGJJ Engineering Solutions voluntarily engages small businesses for subcontracting opportunities.

Oversight & Accountability

Oversight for this contract will primarily reside with the Department of the Army contracting officers and the relevant program managers at Cherry Point. The firm-fixed-price nature of the contract implies that oversight will focus on ensuring the contractor meets the defined scope, schedule, and quality requirements. Transparency is facilitated by the public nature of contract awards, but detailed performance metrics and oversight reports are typically internal. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Department of Defense Facilities Maintenance Contracts
Marine Corps Air Station Construction and Repair
HVAC Services for Federal Buildings
Special Purpose Equipment Maintenance Contracts

Risk Flags

Limited Competition
Undefined Scope (SPD NTO)
Contractor Performance History Unknown

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $13.2 million to KGJJ ENGINEERING SOLUTIONS, LLC. CHERRY POINT HVAC & SPD NTO AWARD LR MATOC

Who is the contractor on this award?

The obligated recipient is KGJJ ENGINEERING SOLUTIONS, 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 $13.2 million.

What is the period of performance?

Start: 2024-09-30. End: 2026-08-31.

What is the specific scope of 'SPD NTO' services included in this contract?

The provided data abbreviates 'SPD NTO' as part of the contract title 'CHERRY POINT HVAC & SPD NTO AWARD LR MATOC'. 'SPD' likely refers to Special Purpose Equipment, and 'NTO' could potentially stand for 'Non-Tactical Operations' or a specific type of equipment or service designation relevant to the Marine Corps Air Station at Cherry Point. Without further clarification from the contract's statement of work, it is difficult to precisely define the scope. However, it is reasonable to infer that it involves the maintenance, repair, or installation of specialized equipment beyond standard HVAC systems, possibly related to base operations or infrastructure. This ambiguity highlights a need for clearer contract descriptions in public award notices to facilitate better understanding and analysis of federal spending.

What is the track record of KGJJ Engineering Solutions, LLC?

Information regarding the specific track record of KGJJ Engineering Solutions, LLC, is not detailed in the provided data snippet. As the prime contractor on this $13.2 million award, their past performance is a critical factor in assessing the risk and potential success of this contract. Federal procurement regulations typically require agencies to evaluate a contractor's past performance. Given that this is a significant award, it is likely that the Department of the Army conducted due diligence. However, without access to performance reports or a more extensive contract history for KGJJ Engineering Solutions, it is challenging to provide a comprehensive assessment of their reliability, quality of work, and adherence to schedules on previous projects.

How does the $13.2 million award compare to similar HVAC and facilities maintenance contracts?

Comparing the $13.2 million award for Cherry Point HVAC & SPD NTO to similar contracts requires access to a broader database of federal procurement data, specifically for HVAC and facilities maintenance services within the Department of Defense or similar large institutions. The duration of the contract (approximately two years) suggests an average annual value of around $6.6 million. This figure is substantial and indicates a significant scope of work. However, without knowing the specific deliverables, geographic density of facilities, or complexity of the systems being maintained at Cherry Point, a direct comparison is difficult. Benchmarking would ideally involve looking at contracts for similar-sized military installations or large federal buildings with comparable climate control and specialized equipment needs.

What are the potential risks associated with this contract?

Several potential risks are associated with this contract. Firstly, the limited competition, with only two bidders, could mean that the government did not achieve the most competitive pricing possible. Secondly, the specific nature of 'SPD NTO' services, if not clearly defined, poses a risk of scope creep, leading to cost overruns or delays. Thirdly, the performance history of the prime contractor, KGJJ Engineering Solutions, LLC, is not detailed here, introducing uncertainty regarding their ability to deliver on time and to the required quality standards. Finally, as with any large construction or maintenance contract, unforeseen site conditions or material price fluctuations could impact the project's execution, although the firm-fixed-price structure aims to mitigate some of these risks for the government by placing them on the contractor.

What is the historical spending pattern for HVAC and facilities maintenance at Cherry Point?

The provided data does not include historical spending patterns for HVAC and facilities maintenance at Cherry Point. To analyze this, one would need to query federal procurement databases for previous contracts awarded to Cherry Point or the Department of the Army for similar services over several fiscal years. Understanding historical spending would allow for an assessment of whether this $13.2 million award represents an increase, decrease, or stable level of investment in these critical facility support functions. It would also help identify trends in contract types, competition levels, and the contractors frequently awarded such work, providing valuable context for the current award.

Industry Classification

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

Product/Service Code: MAINT, REPAIR, ALTER REAL PROPERTY › MAINT, ALTER, REPAIR NONBUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 320 HEMPHILL ST, FORT WORTH, TX, 76104

Business Categories: Category Business, Hispanic American Owned Business, Minority Owned Business, Partnership or Limited Liability Partnership, SBA Certified 8 a Joint Venture, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $33,343,730

Exercised Options: $13,246,229

Current Obligation: $13,246,229

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W9127S23D6026

IDV Type: IDC

Timeline