Nellis AFB chiller replacement contract awarded to Johnson Controls for $13.5M, highlighting critical infrastructure upgrades

Contract Overview

Contract Amount: $13,541,776 ($13.5M)

Contractor: Johnson Controls Building Automation Systems, LLC

Awarding Agency: Department of Defense

Start Date: 2025-09-30

End Date: 2028-09-15

Contract Duration: 1,081 days

Daily Burn Rate: $12.5K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: FURNISH ALL PLANT, LABOR, EQUIPMENT, MATERIALS, TRANSPORTATION, SUPERVISION AND TECHNICAL EXPERTISE TO PERFORM REQUIREMENTS TO REPLACE TWO 200-TON CHILLERS AND INSTALL A NEW EMERGENCY GENERATOR WITH ASSOCIATED EQUIPMENT FOR BLDG. 1772 AT NELLIS AFB.

Place of Performance

Location: NELLIS AFB, CLARK County, NEVADA, 89191

State: Nevada Government Spending

Plain-Language Summary

Department of Defense obligated $13.5 million to JOHNSON CONTROLS BUILDING AUTOMATION SYSTEMS, LLC for work described as: FURNISH ALL PLANT, LABOR, EQUIPMENT, MATERIALS, TRANSPORTATION, SUPERVISION AND TECHNICAL EXPERTISE TO PERFORM REQUIREMENTS TO REPLACE TWO 200-TON CHILLERS AND INSTALL A NEW EMERGENCY GENERATOR WITH ASSOCIATED EQUIPMENT FOR BLDG. 1772 AT NELLIS AFB. Key points: 1. The contract focuses on essential facility maintenance and modernization, ensuring operational continuity. 2. Limited competition suggests potential for higher costs, necessitating careful price benchmarking. 3. The firm-fixed-price structure shifts cost risk to the contractor, but requires robust oversight. 4. This expenditure addresses aging infrastructure, a common challenge in federal facilities. 5. The project's success hinges on timely delivery and integration of new systems. 6. Performance will be monitored against established technical specifications and timelines.

Value Assessment

Rating: fair

The contract value of $13.5 million for replacing two large chillers and installing an emergency generator appears within a reasonable range for such critical infrastructure projects. However, without specific details on the scope of work, equipment models, and installation complexity, a precise value-for-money assessment is challenging. Benchmarking against similar HVAC modernization projects at other Air Force bases or federal facilities would provide a clearer picture of whether this price reflects competitive market rates or if it leans towards the higher end due to the limited competition.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, indicating that only one vendor, Johnson Controls Building Automation Systems, LLC, was considered capable of performing the required work. This approach is typically used when a specific technology, proprietary system, or unique expertise is necessary, or in cases of urgent need where full and open competition is not feasible. The lack of competition means that the government did not benefit from multiple bids, which could have driven down the price through competitive pressure.

Taxpayer Impact: Sole-source awards limit the government's ability to secure the best possible price through market competition, potentially leading to higher costs for taxpayers. It also bypasses opportunities to engage a broader range of suppliers, including small businesses.

Public Impact

The primary beneficiaries are the personnel and operations at Nellis Air Force Base, ensuring a stable and reliable environment. The services delivered include the replacement of critical cooling systems and the installation of emergency power, enhancing facility resilience. The geographic impact is localized to Nellis AFB in Nevada, supporting its mission readiness. Workforce implications may include specialized technicians for installation and maintenance, potentially sourced by the prime contractor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially increasing costs for taxpayers.
Lack of transparency in the justification for sole-source procurement.
Potential for cost overruns if unforeseen issues arise during installation.
Dependency on a single contractor for critical infrastructure upgrades.

Positive Signals

Addresses critical infrastructure needs for base operations.
Firm-fixed-price contract shifts cost risk to the contractor.
Long-term contract duration allows for phased implementation and potential learning curve efficiencies.
Contractor has a track record in building automation systems.

Sector Analysis

This contract falls within the broader construction and facilities maintenance sector, specifically focusing on HVAC systems and emergency power generation for a federal installation. The market for large-scale chiller replacements and generator installations is specialized, often dominated by established players with proven expertise and the capacity to handle complex government projects. Spending in this area is driven by the need to maintain aging federal infrastructure, comply with environmental regulations, and ensure operational continuity for critical government functions. Comparable spending benchmarks would typically be found in large-scale facility modernization projects at military bases or other federal agencies.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the 'co' field lists Johnson Controls Building Automation Systems, LLC, a large corporation. There is no explicit mention of subcontracting goals for small businesses within the provided data. This suggests that opportunities for small businesses to participate in this specific contract may be limited, unless they are part of Johnson Controls' supply chain or subcontracting network.

Oversight & Accountability

Oversight for this contract will likely be managed by the contracting officer and the contract administration team within the Department of the Army, which is the servicing agency. Performance monitoring will be crucial to ensure the contractor meets the technical specifications, delivery timelines, and quality standards outlined in the contract. Transparency regarding project progress and any potential issues may be limited due to the sole-source nature of the award, but contract performance reports and final inspection records should be available through federal procurement databases.

Related Government Programs

Nellis AFB Facility Modernization Projects
Department of Defense HVAC System Upgrades
Federal Building Infrastructure Maintenance
Emergency Generator Installation Contracts
Air Force Base Operations Support

Risk Flags

Sole-source award justification requires scrutiny.
Potential for cost overruns due to installation complexity.
Dependency on contractor for critical system functionality.
Ensuring long-term maintainability and supportability of new equipment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $13.5 million to JOHNSON CONTROLS BUILDING AUTOMATION SYSTEMS, LLC. FURNISH ALL PLANT, LABOR, EQUIPMENT, MATERIALS, TRANSPORTATION, SUPERVISION AND TECHNICAL EXPERTISE TO PERFORM REQUIREMENTS TO REPLACE TWO 200-TON CHILLERS AND INSTALL A NEW EMERGENCY GENERATOR WITH ASSOCIATED EQUIPMENT FOR BLDG. 1772 AT NELLIS AFB.

Who is the contractor on this award?

The obligated recipient is JOHNSON CONTROLS BUILDING AUTOMATION SYSTEMS, 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 $13.5 million.

What is the period of performance?

Start: 2025-09-30. End: 2028-09-15.

What is Johnson Controls Building Automation Systems, LLC's track record with similar sole-source contracts for the Department of Defense?

Johnson Controls Building Automation Systems, LLC has a history of securing contracts with the Department of Defense, including those related to building automation and facility upgrades. While specific data on their sole-source awards for chiller replacements and generator installations at other bases is not detailed here, their presence in this market suggests experience. A deeper dive into federal procurement databases (like SAM.gov or FPDS) would reveal the frequency, value, and nature of their past sole-source awards to the DoD. Analyzing these past contracts could shed light on their performance, pricing consistency, and any potential issues encountered in similar sole-source scenarios, providing context for the current Nellis AFB award.

How does the $13.5 million cost compare to market rates for similar chiller and generator projects at other military installations?

Benchmarking the $13.5 million cost against similar projects is crucial for assessing value. Without specific details on the exact tonnage of the chillers, the capacity of the generator, the complexity of the installation (e.g., building access, existing infrastructure integration), and the specific models chosen, a precise comparison is difficult. However, large-scale HVAC replacements and generator installations at military bases can range from several million to tens of millions of dollars. Factors like geographic location (labor costs), the age and condition of the existing facility, and the specific technological requirements significantly influence pricing. A comprehensive market analysis would involve comparing this contract's scope and price to recently awarded contracts for similar work at comparable Air Force bases or other DoD facilities to determine if it represents a fair and reasonable price.

What are the primary risks associated with a sole-source award for critical infrastructure like HVAC systems?

The primary risk of a sole-source award for critical infrastructure is the lack of competitive pricing. Without multiple bids, the government may pay a premium compared to what could be achieved in a competitive environment. This can lead to reduced value for taxpayer money. Another significant risk is the potential for contractor performance issues; while the government selects a vendor based on perceived capability, the absence of competition means there's less market pressure to ensure optimal performance and efficiency. Furthermore, sole-source awards can sometimes indicate a lack of market research or planning, potentially missing opportunities to engage a wider range of qualified vendors, including innovative small businesses. Finally, there's a risk of vendor lock-in if the chosen system requires proprietary maintenance or upgrades.

What is the expected impact of these upgrades on Nellis AFB's operational effectiveness and energy efficiency?

Replacing aging chillers with new units is expected to significantly improve Nellis AFB's operational effectiveness by ensuring reliable climate control, which is critical for sensitive equipment, data centers, and personnel comfort, thereby supporting mission readiness. Modern chillers are typically more energy-efficient than older models, which should lead to reduced energy consumption and lower utility costs for the base over the life of the equipment. The new emergency generator will enhance resilience by providing backup power during outages, preventing disruptions to critical operations and protecting valuable assets. The combined impact is a more reliable, efficient, and resilient facility infrastructure.

What are the historical spending patterns for facility maintenance and upgrades at Nellis AFB over the last five years?

Analyzing historical spending patterns for facility maintenance and upgrades at Nellis AFB over the last five years would provide valuable context for the current $13.5 million contract. This would involve examining procurement data for similar projects, such as HVAC replacements, generator installations, and general building renovations. Understanding the frequency and average cost of such projects would help determine if this current expenditure is an anomaly or part of a consistent investment cycle. It could also reveal trends in contracting methods (e.g., sole-source vs. competitive) and identify any significant increases or decreases in spending on infrastructure modernization, offering insights into the base's capital investment strategy and budget allocation for facilities.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 4940 CORPORATE DR NW STE C, HUNTSVILLE, AL, 35805

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $13,541,776

Exercised Options: $13,541,776

Current Obligation: $13,541,776

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W912DY25DA008

IDV Type: IDC

Timeline