VA awards $44.7M construction contract to Stronghold Engineering Inc. for facility upgrades

Contract Overview

Contract Amount: $44,711,234 ($44.7M)

Contractor: Stronghold Engineering Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2019-06-28

End Date: 2024-01-31

Contract Duration: 1,678 days

Daily Burn Rate: $26.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: DIETETICS B300

Place of Performance

Location: LOS ANGELES, LOS ANGELES County, CALIFORNIA, 90073

State: California Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $44.7 million to STRONGHOLD ENGINEERING INC for work described as: DIETETICS B300 Key points: 1. Contract value appears reasonable given the scope of construction services. 2. Full and open competition suggests a competitive bidding process. 3. Contract duration of nearly 2 years indicates a substantial project. 4. Fixed-price contract type shifts risk to the contractor. 5. Project location in California may influence labor and material costs. 6. No small business set-aside was utilized for this award.

Value Assessment

Rating: good

The contract value of $44.7 million for commercial and institutional building construction is within a typical range for projects of this scale. Benchmarking against similar VA construction contracts would provide a more precise value-for-money assessment. The firm fixed-price nature of the award suggests that the contractor bears the risk of cost overruns, which can be a positive indicator for the government if the contractor's bid was competitive. However, without detailed cost breakdowns or comparisons to independent cost estimates, a definitive assessment of pricing efficiency is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The number of bidders is not specified, but this procurement method generally fosters price discovery and encourages competitive pricing. The VA's use of this method suggests a commitment to maximizing value and ensuring a broad range of contractors had the opportunity to compete for this work.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically leads to lower prices and higher quality services due to robust market engagement.

Public Impact

Veterans will benefit from improved facilities and infrastructure at the VA medical center. The project involves significant construction and renovation work, enhancing the operational capacity of the facility. The geographic impact is localized to the VA facility in California. The contract will likely create or sustain jobs in the construction sector within the local area.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions arise, despite fixed-price contract.
Dependence on contractor's ability to manage complex construction timelines effectively.
Risk of delays impacting facility readiness if project milestones are not met.

Positive Signals

Firm fixed-price contract shifts cost risk to the contractor.
Full and open competition suggests a competitive bidding environment.
Long contract duration allows for thorough project execution and quality control.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a significant segment of the broader construction industry. Federal spending in this area often supports the maintenance, renovation, and new construction of government facilities, including healthcare and administrative buildings. The market for federal construction is competitive, with numerous firms capable of undertaking projects of this magnitude. The VA, as a major federal agency, consistently invests in its infrastructure, making this contract a typical example of its capital improvement spending.

Small Business Impact

The data indicates that this contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned. This means the primary award went to a large business, and opportunities for small businesses would likely be through subcontracting directly with Stronghold Engineering Inc., if they choose to engage them. The absence of a set-aside means the direct impact on the small business ecosystem from this specific award is limited.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of Veterans Affairs contracting officers and project managers. The firm fixed-price nature of the contract provides a degree of accountability by placing cost control responsibility on the contractor. Transparency is generally maintained through contract award databases and public reporting mechanisms. Inspector General involvement would be triggered by allegations of fraud, waste, or abuse.

Related Government Programs

VA Medical Facility Construction
Federal Building and Infrastructure Projects
Commercial Construction Services
Department of Veterans Affairs Capital Investments

Risk Flags

Potential for cost overruns if unforeseen site conditions arise.
Risk of project delays impacting facility readiness.
Contractor performance and quality control over extended duration.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $44.7 million to STRONGHOLD ENGINEERING INC. DIETETICS B300

Who is the contractor on this award?

The obligated recipient is STRONGHOLD ENGINEERING INC.

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 $44.7 million.

What is the period of performance?

Start: 2019-06-28. End: 2024-01-31.

What is the track record of Stronghold Engineering Inc. with federal contracts, particularly with the Department of Veterans Affairs?

A review of federal contract databases would be necessary to fully assess Stronghold Engineering Inc.'s track record. However, the award of a $44.7 million contract by the VA suggests a demonstrated capability to handle large-scale projects. Further analysis would involve examining past performance reviews, any history of contract disputes or terminations, and the types of projects they have successfully completed for the government. Understanding their experience with similar facility upgrades and their performance metrics on previous VA contracts would provide crucial context for evaluating their reliability and expertise in executing this current award.

How does the awarded amount of $44.7 million compare to similar VA construction projects of comparable scope and complexity?

To benchmark the value of this $44.7 million contract, one would need to compare it against similar construction projects awarded by the Department of Veterans Affairs or other federal agencies for similar types of facilities (e.g., medical centers, institutional buildings) and scope of work (e.g., renovations, upgrades, new construction). Factors such as geographic location (which impacts labor and material costs), project duration, and specific technical requirements would need to be considered for a fair comparison. Without access to a detailed database of comparable projects and their associated costs, it is difficult to definitively state whether this award represents excellent, good, or fair value for money. However, the firm fixed-price nature suggests the government has secured a ceiling price.

What are the primary risks associated with a firm fixed-price construction contract of this magnitude, and how are they mitigated?

The primary risk with a firm fixed-price (FFP) contract is that the contractor may incur costs exceeding their bid, potentially leading to financial distress or a drive to cut corners on quality to maintain profitability. For a contract of $44.7 million, unforeseen site conditions, material price escalations, or labor shortages could significantly impact the contractor's costs. Mitigation strategies employed by the government often include thorough pre-bid site investigations, detailed scope definition, robust contract administration, and performance monitoring. The FFP structure itself mitigates the risk of cost growth for the government, provided the initial bid was competitive and the scope is well-defined. The VA would likely have clauses for change orders and equitable adjustments for unforeseen circumstances.

What is the expected impact of this contract on the specific VA facility's operational capabilities and the veteran population it serves?

This contract is expected to significantly enhance the operational capabilities of the VA facility by upgrading its infrastructure. Improvements in building construction, such as modernizing systems, improving energy efficiency, or expanding capacity, can lead to a safer, more comfortable, and more efficient environment for both healthcare providers and veteran patients. Enhanced facilities can support the delivery of a wider range of medical services, improve patient flow, and contribute to overall patient satisfaction. The direct impact on the veteran population served by this facility will be a modernized and potentially expanded healthcare environment, contributing to better health outcomes and a more positive patient experience.

How does the contract duration of 1678 days (approximately 4.6 years) influence the assessment of project risk and value?

A contract duration of 1678 days (nearly 4.6 years) for a construction project of this scale suggests a complex, multi-phased undertaking, potentially involving significant renovation, expansion, or new construction. While a longer duration allows for more thorough execution and potentially higher quality, it also increases the contractor's exposure to market fluctuations (e.g., material costs, labor availability) and introduces greater risk of project delays due to unforeseen circumstances. For the government, a longer duration means funds are committed over an extended period. Assessing the value requires ensuring that the extended timeline is justified by the project's complexity and that appropriate mechanisms are in place to manage risks and maintain oversight throughout the project lifecycle.

Industry Classification

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

Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCTION OF BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: TWO STEP

Solicitation ID: VA101-16-R-0256

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2000 MARKET ST, RIVERSIDE, CA, 92501

Business Categories: Asian Pacific American Owned Business, Category Business, Minority Owned Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business, Woman Owned Business

Financial Breakdown

Contract Ceiling: $44,711,234

Exercised Options: $44,711,234

Current Obligation: $44,711,234

Actual Outlays: $1,767,489

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline