VA Awards $42.5M Contract for SICU Construction and OR Renovation at Oklahoma City VA Medical Center

Contract Overview

Contract Amount: $42,537,190 ($42.5M)

Contractor: Richard Group LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2024-02-22

End Date: 2026-12-10

Contract Duration: 1,022 days

Daily Burn Rate: $41.6K/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: CONSTRUCT SURGICAL INTENSIVE CARE UNIT (SICU) AND RENOVATE OPERATING ROOMS (OR) OKVAMC, OKLAHOMA CITY, OK

Place of Performance

Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73104

State: Oklahoma Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $42.5 million to RICHARD GROUP LLC for work described as: CONSTRUCT SURGICAL INTENSIVE CARE UNIT (SICU) AND RENOVATE OPERATING ROOMS (OR) OKVAMC, OKLAHOMA CITY, OK Key points: 1. The contract aims to improve critical care facilities at the Oklahoma City VA Medical Center. 2. The project involves constructing a new Surgical Intensive Care Unit (SICU) and renovating existing Operating Rooms (OR). 3. The award was made to Richard Group LLC. 4. The contract type is Firm Fixed Price, indicating a set cost for the project. 5. The duration of the contract is 1022 days, spanning from February 2024 to December 2026.

Value Assessment

Rating: good

The contract value of $42.5 million for constructing a SICU and renovating ORs appears reasonable given the scope and complexity of healthcare facility upgrades. Benchmarking against similar projects would provide a more precise assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition After Exclusion of Sources,' suggesting a limited competition where specific sources were initially considered before a broader solicitation. This method can impact price discovery if not managed carefully.

Taxpayer Impact: Taxpayer funds are being used for essential upgrades to veteran healthcare infrastructure, aiming for improved patient care and facility modernization.

Public Impact

Enhances critical care capacity for veterans in Oklahoma. Modernizes surgical facilities, potentially leading to better patient outcomes. Supports local construction jobs and economic activity in Oklahoma City. Addresses aging infrastructure within the VA healthcare system.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may have restricted price negotiation.
Potential for cost overruns in complex construction projects.
Project timeline extends over two years, increasing risk of delays.

Positive Signals

Addresses critical healthcare needs for veterans.
Firm Fixed Price contract provides cost certainty.
Project aims to improve patient safety and quality of care.

Sector Analysis

This contract falls under Commercial and Institutional Building Construction, a sector vital for public infrastructure. Spending benchmarks for similar healthcare facility construction projects vary widely based on size, complexity, and location.

Small Business Impact

The data does not indicate whether small businesses were involved as prime contractors or subcontractors in this award. Further analysis would be needed to assess small business participation.

Oversight & Accountability

The Department of Veterans Affairs is responsible for overseeing this contract. Robust oversight will be crucial to ensure the project stays on schedule, within budget, and meets quality standards.

Related Government Programs

Commercial and Institutional Building Construction
Department of Veterans Affairs Contracting
Department of Veterans Affairs Programs

Risk Flags

Potential for scope creep during construction.
Reliance on a single prime contractor (Richard Group LLC).
Long project duration increases exposure to economic fluctuations.
Complexity of integrating new SICU with existing hospital infrastructure.
Ensuring compliance with VA healthcare construction standards.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $42.5 million to RICHARD GROUP LLC. CONSTRUCT SURGICAL INTENSIVE CARE UNIT (SICU) AND RENOVATE OPERATING ROOMS (OR) OKVAMC, OKLAHOMA CITY, OK

Who is the contractor on this award?

The obligated recipient is RICHARD GROUP LLC.

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 $42.5 million.

What is the period of performance?

Start: 2024-02-22. End: 2026-12-10.

What is the estimated cost per square foot for the SICU construction and OR renovation compared to industry averages?

A precise cost per square foot benchmark is difficult without detailed project specifications. However, healthcare construction, especially for specialized units like SICUs and ORs, typically commands higher costs due to stringent requirements for infection control, specialized equipment integration, and advanced building systems. A preliminary estimate would require comparing the total contract value against the total square footage of the renovated and newly constructed areas.

What specific factors led to the 'Exclusion of Sources' in the competition, and how did this impact the final price?

The 'Exclusion of Sources' likely indicates that the initial solicitation or pre-qualification process identified a limited pool of contractors possessing the specialized expertise, security clearances, or past performance required for this specific VA medical center project. While intended to ensure capability, this can sometimes reduce competitive pressure, potentially leading to higher prices than a truly open competition might yield. The VA would need to justify this exclusion based on project needs.

How will the effectiveness of the new SICU and renovated ORs be measured post-completion to ensure value for taxpayer investment?

Effectiveness will likely be measured through a combination of metrics. These include patient outcomes (e.g., reduced infection rates, improved recovery times), operational efficiency (e.g., reduced procedure delays, better staff workflow), facility uptime, and patient/staff satisfaction surveys. Post-occupancy evaluations and performance monitoring against pre-defined Key Performance Indicators (KPIs) will be crucial for assessing the long-term value and success of the investment.

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 AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 36C10F22R0036

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 566 W LAKE STREET, CHICAGO, IL, 60661

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $42,537,190

Exercised Options: $42,537,190

Current Obligation: $42,537,190

Actual Outlays: $9,280,888

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline