VA Awards $15.9M Contract for D Wing Building 1 Construction to Spees-Hernandez JV LLC
Contract Overview
Contract Amount: $15,862,897 ($15.9M)
Contractor: Spees-Hernandez JV LLC
Awarding Agency: Department of Veterans Affairs
Start Date: 2022-01-25
End Date: 2026-03-28
Contract Duration: 1,523 days
Daily Burn Rate: $10.4K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 4
Pricing Type: FIRM FIXED PRICE
Sector: Construction
Official Description: EXPAND D WING BUILDING 1 CONSTRUCTION
Place of Performance
Location: FAYETTEVILLE, CUMBERLAND County, NORTH CAROLINA, 28301
Plain-Language Summary
Department of Veterans Affairs obligated $15.9 million to SPEES-HERNANDEZ JV LLC for work described as: EXPAND D WING BUILDING 1 CONSTRUCTION Key points: 1. The contract is for building construction, a sector with significant infrastructure needs. 2. Competition was full and open after exclusion of sources, suggesting a deliberate procurement strategy. 3. The firm fixed-price contract type aims to control costs for the $15.9M award. 4. The project duration is substantial at 1523 days, indicating a complex undertaking.
Value Assessment
Rating: fair
The contract value of $15.9M for a building construction project appears within a reasonable range for a large-scale facility. Benchmarking against similar VA construction projects would provide a more precise assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The procurement method 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' indicates that while the competition was intended to be broad, specific sources were initially excluded. This could impact price discovery if the excluded sources were significant competitors.
Taxpayer Impact: The firm fixed-price contract aims to protect taxpayers from cost overruns, but the effectiveness depends on the initial pricing and any potential change orders.
Public Impact
Veterans will benefit from improved facilities with the construction of the D Wing. The project will create jobs in the North Carolina region during its multi-year duration. Taxpayers are funding a significant infrastructure investment for the Department of Veterans Affairs.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost increases if change orders are extensive.
- Risk associated with a long project duration (over 4 years).
- Limited competition after source exclusion could impact final price.
Positive Signals
- Firm fixed-price contract provides cost certainty.
- Project addresses critical infrastructure needs for veterans.
- Competition was ultimately full and open.
Sector Analysis
The construction sector is vital for government infrastructure. This project falls under Commercial and Institutional Building Construction, a broad category. Spending benchmarks vary widely based on project scope and location.
Small Business Impact
The contract was awarded to SPEES-HERNANDEZ JV LLC. Further analysis is needed to determine the extent of small business participation within this joint venture or as subcontractors.
Oversight & Accountability
The Department of Veterans Affairs is responsible for overseeing this contract. Robust oversight will be crucial to manage the project's long duration and ensure quality and cost control.
Related Government Programs
- Commercial and Institutional Building Construction
- Department of Veterans Affairs Contracting
- Department of Veterans Affairs Programs
Risk Flags
- Long project duration increases exposure to market fluctuations and potential delays.
- Exclusion of sources prior to full competition may have limited the bidder pool.
- Firm fixed-price contracts can lead to disputes if scope creep occurs.
- Lack of detailed cost breakdown makes precise value assessment challenging.
Tags
commercial-and-institutional-building-co, department-of-veterans-affairs, nc, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Veterans Affairs awarded $15.9 million to SPEES-HERNANDEZ JV LLC. EXPAND D WING BUILDING 1 CONSTRUCTION
Who is the contractor on this award?
The obligated recipient is SPEES-HERNANDEZ JV 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 $15.9 million.
What is the period of performance?
Start: 2022-01-25. End: 2026-03-28.
What is the specific justification for excluding certain sources before the full and open competition phase?
The justification for excluding sources prior to the full and open competition phase is not detailed in the provided data. Typically, such exclusions are based on specific technical capabilities, past performance, or unique requirements that only a subset of potential offerors can meet. Understanding this rationale is key to assessing whether the competition was truly optimized for value.
How does the $15.9M cost compare to similar VA hospital wing construction projects in terms of cost per square foot or per bed?
Without specific details on the size (square footage) or capacity (number of beds) of the D Wing, a direct cost per unit comparison is difficult. However, $15.9 million for a significant building expansion suggests a substantial project. Benchmarking against similar recent VA construction contracts for comparable facilities would be necessary to determine if this represents a competitive price.
What mechanisms are in place to mitigate risks associated with a project duration exceeding four years?
Mitigation strategies for a project spanning over four years typically include phased delivery schedules, regular progress reviews, proactive risk management plans addressing potential delays (e.g., material shortages, labor issues, weather), and clear communication protocols between the VA and the contractor. The firm fixed-price nature also incentivizes the contractor to manage these risks efficiently.
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: 36C24621R0050
Offers Received: 4
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 625 1ST AVE STE 301, SEATTLE, WA, 98104
Business Categories: Category Business, Limited Liability Corporation, Self-Certified Small Disadvantaged Business, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business
Financial Breakdown
Contract Ceiling: $15,862,897
Exercised Options: $15,862,897
Current Obligation: $15,862,897
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Timeline
Start Date: 2022-01-25
Current End Date: 2026-03-28
Potential End Date: 2026-03-28 00:00:00
Last Modified: 2026-03-02
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