VA awards $17.8M contract for inpatient ward renovation, highlighting construction sector activity

Contract Overview

Contract Amount: $17,882,515 ($17.9M)

Contractor: Engelberth Construction, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2023-08-23

End Date: 2025-06-24

Contract Duration: 671 days

Daily Burn Rate: $26.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: 405-13-104 RENOVATE INPATIENT WARD

Place of Performance

Location: WHITE RIVER JUNCTION, WINDSOR County, VERMONT, 05009

State: Vermont Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $17.9 million to ENGELBERTH CONSTRUCTION, INC. for work described as: 405-13-104 RENOVATE INPATIENT WARD Key points: 1. Contract value appears reasonable for a large-scale renovation project of this nature. 2. Full and open competition suggests a healthy bidding environment for this project. 3. Fixed-price contract type mitigates cost overrun risks for the government. 4. Project duration of 671 days indicates a significant scope of work. 5. Contract awarded to a single entity, Engelberth Construction, Inc. 6. Geographic focus on Vermont for this critical healthcare infrastructure upgrade.

Value Assessment

Rating: good

The contract value of $17.8 million for renovating an inpatient ward is within the expected range for substantial healthcare facility upgrades. Benchmarking against similar projects requires detailed scope comparison, but the fixed-price nature provides cost certainty. The award amount relative to the estimated value (if available) would offer further insight into value for money. Without specific comparable project data, a definitive assessment is challenging, but the price appears fair for the described scope.

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 a bid. The presence of two bids suggests a moderate level of competition for this specific project. While two bidders is better than one, a higher number of bids would typically lead to more aggressive pricing and potentially better value for the government.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it encourages multiple companies to bid, driving down prices and ensuring the government receives competitive offers.

Public Impact

Veterans in Vermont will benefit from improved inpatient ward facilities. The renovation will enhance the quality and safety of healthcare services provided by the VA. The project is geographically focused within Vermont, supporting local economic activity. Construction jobs will be created or sustained in the Vermont area during the project's duration.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for delays given the project's significant duration and complexity.
Ensuring the quality of construction meets VA standards is crucial.

Positive Signals

Fixed-price contract limits the government's exposure to cost increases.
Full and open competition suggests a robust bidding process.
Award to an established construction firm may indicate a lower risk of performance issues.

Sector Analysis

The Commercial and Institutional Building Construction sector is a vital part of the U.S. economy, encompassing a wide range of projects from small renovations to large-scale new builds. Federal spending in this sector, particularly for healthcare facilities like VA hospitals, is substantial and driven by the need to maintain and upgrade critical infrastructure. This contract fits within the broader trend of government investment in healthcare infrastructure, aiming to provide modern and efficient facilities for service members and veterans. Comparable spending benchmarks would typically be found within the broader federal construction spending reports and specific agency procurement data.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of specific subcontracting requirements for small businesses in the provided data. Therefore, the direct impact on the small business ecosystem is likely minimal unless the prime contractor voluntarily engages small businesses for specialized services. Further review of the contract details would be needed to ascertain any subcontracting plans or goals.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of Veterans Affairs' contracting officers and project managers. Accountability measures are inherent in the firm fixed-price contract type, which incentivizes the contractor to complete the work within budget. Transparency is generally maintained through federal procurement databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

VA Medical Facility Construction
Healthcare Infrastructure Modernization
Federal Building Renovations
Commercial Construction Contracts

Risk Flags

Potential for cost increases via change orders if unforeseen conditions are discovered.
Risk of project delays impacting service delivery.
Ensuring contractor's adherence to quality standards throughout the renovation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $17.9 million to ENGELBERTH CONSTRUCTION, INC.. 405-13-104 RENOVATE INPATIENT WARD

Who is the contractor on this award?

The obligated recipient is ENGELBERTH CONSTRUCTION, 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 $17.9 million.

What is the period of performance?

Start: 2023-08-23. End: 2025-06-24.

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

A review of federal procurement data indicates that Engelberth Construction, Inc. has a history of securing contracts with various federal agencies. To assess their specific track record with the Department of Veterans Affairs (VA), a detailed analysis of past VA awards to this contractor would be necessary. This would involve examining the types of projects awarded, their performance history on those projects (e.g., on-time completion, adherence to budget, quality of work), and any reported disputes or contract modifications. A strong performance history with the VA would suggest a lower risk for this current inpatient ward renovation project, while a history of issues might warrant closer scrutiny of their capabilities and management approach.

How does the awarded amount of $17.8 million compare to the estimated cost or similar VA inpatient ward renovation projects?

Without access to the government's independent government cost estimate (IGCE) or specific details on the scope of work for this particular renovation, a precise value-for-money comparison is difficult. However, $17.8 million is a significant sum, suggesting a substantial renovation. To benchmark effectively, one would compare this figure against the cost per square foot or cost per bed for similar VA inpatient ward renovations completed in the last 1-3 years, adjusting for geographic location and inflation. If this project involves extensive structural work, upgrades to critical systems (HVAC, electrical, plumbing), or modernization of specialized medical equipment areas, the cost could be justified. Conversely, if it's primarily cosmetic, the price might be considered high.

What are the primary risks associated with a firm fixed-price contract for a large-scale construction project like this?

The primary risk with a firm fixed-price (FFP) contract, while generally favorable to the government for cost control, lies in the potential for the contractor to cut corners on quality or scope to maintain profitability if unforeseen issues arise or costs escalate beyond their initial estimates. For a large renovation, risks include discovering unforeseen structural problems, hazardous materials (like asbestos or lead paint), or outdated building systems that require more extensive and costly remediation than initially anticipated. If the contractor cannot absorb these unexpected costs, they might seek change orders, potentially increasing the contract price, or face financial distress, leading to delays or performance issues. Robust project management and clear contract specifications are crucial to mitigate these risks.

What is the expected impact of this renovation on the delivery of healthcare services to veterans in Vermont?

This renovation is expected to significantly improve the delivery of healthcare services to veterans in Vermont by modernizing the inpatient ward facilities. Upgraded facilities can lead to enhanced patient safety, improved infection control, better patient comfort, and potentially allow for the implementation of new medical technologies or treatment protocols. Modernized wards can also improve the working environment for healthcare staff, potentially aiding in recruitment and retention. Ultimately, the goal is to provide a higher standard of care in a more efficient and effective environment, contributing to better health outcomes for the veteran population served by this VA facility.

How has federal spending on healthcare facility construction and renovation trended in recent years, and where does this contract fit?

Federal spending on healthcare facility construction and renovation has generally seen consistent investment, driven by the ongoing need to maintain and modernize aging infrastructure across agencies like the Department of Veterans Affairs (VA) and the Department of Defense (DoD). Factors such as increasing healthcare demands, technological advancements in medical equipment, and the need for enhanced security and energy efficiency contribute to this spending. This $17.8 million VA contract for an inpatient ward renovation aligns with this trend, representing a specific investment in upgrading critical healthcare infrastructure. Analyzing broader spending trends would involve looking at aggregate data for VA construction projects, national healthcare construction market reports, and overall federal capital investment figures.

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: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 36C24122R0135

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 150 WATERTOWER CIR, COLCHESTER, VT, 05446

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

Financial Breakdown

Contract Ceiling: $17,882,515

Exercised Options: $17,882,515

Current Obligation: $17,882,515

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline