DoD Awards $14.5M Design-Build Contract for Failing Air Handler Units at WRMC

Contract Overview

Contract Amount: $14,521,000 ($14.5M)

Contractor: HDD JV

Awarding Agency: Department of Defense

Start Date: 2025-09-30

End Date: 2027-10-10

Contract Duration: 740 days

Daily Burn Rate: $19.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: THE INTENT OF THIS PROJECT IS TO PROVIDE FULL TURNKEY DESIGN-BUILD REPLACEMENT OF THE LISTED AIR HANDLER UNITS (AHU). DHA RECOGNIZES THAT THESE AHUS 8, 9, 1, 2, 4, AND 6, AT WRMC, BUILDING-10 ARE FAILING, AT END OF SERVICE LIFE, AND NEED REPLACEMENT.

Place of Performance

Location: BETHESDA, MONTGOMERY County, MARYLAND, 20889

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $14.5 million to HDD JV for work described as: THE INTENT OF THIS PROJECT IS TO PROVIDE FULL TURNKEY DESIGN-BUILD REPLACEMENT OF THE LISTED AIR HANDLER UNITS (AHU). DHA RECOGNIZES THAT THESE AHUS 8, 9, 1, 2, 4, AND 6, AT WRMC, BUILDING-10 ARE FAILING, AT END OF SERVICE LIFE, AND NEED REPLACEMENT. Key points: 1. Project addresses critical infrastructure failure of multiple Air Handler Units (AHUs) at Walter Reed Medical Center (WRMC). 2. The contract was awarded under full and open competition, suggesting a competitive bidding process. 3. The firm-fixed-price contract type aims to control costs for the $14.5 million project. 4. The construction sector is experiencing significant demand, potentially impacting material and labor costs.

Value Assessment

Rating: good

The contract value of $14.5 million for replacing six AHUs appears reasonable given the scope of a turnkey design-build project. Benchmarking against similar large-scale HVAC replacement projects in federal facilities would provide a more precise assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded using full and open competition, indicating that multiple vendors had the opportunity to bid. This method is generally expected to yield competitive pricing and best value for the government.

Taxpayer Impact: The competitive award process is designed to ensure taxpayer funds are used efficiently for necessary infrastructure upgrades.

Public Impact

Ensures continued operation of critical medical facilities at WRMC by replacing aging and failing equipment. Improves air quality and HVAC system reliability within Building 10 at WRMC. Supports the Department of Defense's infrastructure modernization efforts. Potential for improved energy efficiency with new AHU technology.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions arise during design-build.
Schedule delays could impact facility operations if not managed effectively.
Reliance on specific materials or technologies could pose supply chain risks.

Positive Signals

Addresses a critical need for infrastructure replacement.
Firm-fixed-price contract provides cost certainty.
Full and open competition promotes market-driven pricing.

Sector Analysis

This project falls within the Commercial and Institutional Building Construction sector, specifically focusing on HVAC system replacement. Federal spending in this sector often involves large, complex projects requiring specialized design and construction services.

Small Business Impact

The data indicates this contract was awarded to HDD JV, and it does not specify any set-asides for small businesses. Further analysis would be needed to determine if small businesses were involved as subcontractors.

Oversight & Accountability

The award was made by the Department of the Army under the Department of Defense. Oversight will likely involve contract management teams ensuring adherence to design specifications, schedule, and budget, with reporting requirements for progress and any issues.

Related Government Programs

Commercial and Institutional Building Construction
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Aging infrastructure requiring urgent replacement.
Potential for unforeseen site conditions impacting cost and schedule.
Dependency on specialized design-build expertise.
Schedule risk associated with complex construction projects.
Firm-fixed-price contract limits flexibility for scope changes.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.5 million to HDD JV. THE INTENT OF THIS PROJECT IS TO PROVIDE FULL TURNKEY DESIGN-BUILD REPLACEMENT OF THE LISTED AIR HANDLER UNITS (AHU). DHA RECOGNIZES THAT THESE AHUS 8, 9, 1, 2, 4, AND 6, AT WRMC, BUILDING-10 ARE FAILING, AT END OF SERVICE LIFE, AND NEED REPLACEMENT.

Who is the contractor on this award?

The obligated recipient is HDD JV.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $14.5 million.

What is the period of performance?

Start: 2025-09-30. End: 2027-10-10.

What is the estimated cost savings or efficiency gain expected from the new AHUs compared to the failing units?

The provided data does not include specific metrics on projected cost savings or efficiency gains from the new AHUs. A thorough analysis would require reviewing the technical specifications and performance data of the proposed replacement units against the current units' operational costs and energy consumption.

What are the key performance indicators (KPIs) for evaluating the success of this design-build project?

Key performance indicators for this project would likely include on-time completion within the 740-day duration, adherence to the $14.5 million budget, successful commissioning of the new AHUs meeting all design specifications, and minimal disruption to WRMC operations during construction. Post-occupancy evaluations of system performance and reliability would also be crucial.

How will the government ensure the long-term maintainability and operational effectiveness of the new AHU system?

The government will ensure long-term maintainability through detailed design specifications requiring accessible components, comprehensive O&M manuals, and potentially training for facility maintenance staff. The design-build contract should also include warranty provisions and performance guarantees to ensure the system operates effectively as intended throughout its lifecycle.

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: 101 DAVIS AVE SW, LEESBURG, VA, 20175

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

Financial Breakdown

Contract Ceiling: $14,521,000

Exercised Options: $14,521,000

Current Obligation: $14,521,000

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W912DY25D0022

IDV Type: IDC

Timeline