Paramount Construction Group awarded $6.6M VA contract for Birmingham VAMC kitchen renovation

Contract Overview

Contract Amount: $6,616,122 ($6.6M)

Contractor: Paramount Construction Group, LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2024-01-26

End Date: 2026-04-30

Contract Duration: 825 days

Daily Burn Rate: $8.0K/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: PROJECT 521-19-108 - RENOVATE MAIN KITCHEN BIRMINGHAM VAMC

Place of Performance

Location: BIRMINGHAM, JEFFERSON County, ALABAMA, 35233

State: Alabama Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $6.6 million to PARAMOUNT CONSTRUCTION GROUP, LLC for work described as: PROJECT 521-19-108 - RENOVATE MAIN KITCHEN BIRMINGHAM VAMC Key points: 1. Contract value appears reasonable for a large-scale kitchen renovation project. 2. Full and open competition suggests a competitive bidding process. 3. Fixed-price contract type shifts performance risk to the contractor. 4. Project duration of 825 days indicates a significant scope of work. 5. Location in Alabama suggests potential for regional economic impact. 6. No small business set-aside noted, potentially limiting direct small business participation.

Value Assessment

Rating: good

The contract value of $6.6 million for renovating a main kitchen at a VA medical center is within a typical range for such substantial infrastructure projects. Benchmarking against similar large-scale commercial kitchen renovations, this price point seems competitive, especially considering the specialized requirements of a healthcare facility. The firm-fixed-price structure indicates that the contractor bears the risk of cost overruns, which is generally favorable for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition after exclusion of sources,' indicating that the solicitation was broadly advertised, and multiple bids were likely considered. The presence of two bids suggests a moderate level of competition for this project. While more bidders could potentially drive prices lower, two offers are sufficient to establish a competitive baseline and ensure a reasonable price.

Taxpayer Impact: The full and open competition process is beneficial for taxpayers as it encourages multiple companies to bid, leading to potentially lower prices and better value for the government's investment.

Public Impact

Veterans receiving services at the Birmingham VAMC will benefit from an improved and potentially more efficient kitchen facility. The renovation will ensure compliance with modern health and safety standards for food preparation. The project is expected to create temporary construction jobs in the Birmingham, Alabama area. Improved kitchen facilities can contribute to better morale and operational efficiency for hospital staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for delays given the 825-day duration, impacting facility operations.
Scope creep could increase costs if not managed tightly under the fixed-price contract.

Positive Signals

Firm-fixed-price contract mitigates cost overrun risk for the government.
Contractor's experience in commercial and institutional building construction is relevant.
Full and open competition suggests a fair market price was likely achieved.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a significant segment of the broader construction industry. Projects of this scale, involving specialized facilities like hospital kitchens, often require contractors with specific expertise in mechanical, electrical, and plumbing systems, as well as adherence to stringent health and safety regulations. Comparable spending benchmarks for large institutional renovations can vary widely based on location, scope, and specific facility needs.

Small Business Impact

The contract was not awarded as a small business set-aside, and the awarded contractor, Paramount Construction Group, LLC, is not explicitly identified as a small business in the provided data. This suggests that small businesses may not have directly benefited from this specific award, although they could potentially participate as subcontractors if opportunities arise. Further analysis would be needed to determine the extent of small business subcontracting planned for this project.

Oversight & Accountability

Oversight for this contract will primarily be managed by the Department of Veterans Affairs (VA) 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 facilitated through federal contract databases where award details are published. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

VA Medical Facility Renovations
Healthcare Infrastructure Projects
Commercial Kitchen Construction
Federal Building and Grounds Improvement

Risk Flags

Potential for cost overruns if unforeseen issues arise during renovation.
Risk of project delays impacting facility operations.
Need for stringent quality control to ensure standards are met.
Contractor's past performance should be thoroughly vetted.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $6.6 million to PARAMOUNT CONSTRUCTION GROUP, LLC. PROJECT 521-19-108 - RENOVATE MAIN KITCHEN BIRMINGHAM VAMC

Who is the contractor on this award?

The obligated recipient is PARAMOUNT CONSTRUCTION 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 $6.6 million.

What is the period of performance?

Start: 2024-01-26. End: 2026-04-30.

What is the track record of Paramount Construction Group, LLC on federal contracts?

Information on Paramount Construction Group, LLC's track record with federal contracts is not detailed in the provided data snippet. A comprehensive review would involve examining past performance evaluations, contract history, and any reported issues or successes on previous government projects. Understanding their experience with similar-sized projects, particularly in healthcare or institutional settings, would be crucial for assessing their capability to successfully execute this kitchen renovation. Without specific past performance data, it's difficult to definitively gauge their reliability and efficiency.

How does the $6.6 million cost compare to similar VA kitchen renovation projects?

Benchmarking the $6.6 million cost against similar VA kitchen renovation projects requires access to a database of comparable contracts. Factors such as the size of the kitchen, the extent of the renovation (e.g., equipment replacement, structural changes, system upgrades), the specific VAMC's location and associated labor costs, and the year the contract was awarded all influence pricing. Generally, large-scale institutional kitchen renovations can range from several hundred thousand to several million dollars. This $6.6 million figure suggests a significant scope, potentially involving major upgrades to equipment, ventilation, plumbing, and electrical systems, as well as compliance with modern health and safety standards.

What are the primary risks associated with this firm-fixed-price contract?

The primary risk associated with a firm-fixed-price (FFP) contract, from the government's perspective, is that the contractor may cut corners on quality or scope to maintain profitability if unforeseen issues arise or costs escalate beyond their initial estimates. For the contractor, the risk lies in underestimating costs or encountering unexpected complexities during the renovation, which could lead to financial losses if they cannot absorb the overruns. Effective project oversight by the VA is critical to mitigate these risks, ensuring that the work is performed to the specified standards and that the final product meets all requirements.

What is the expected impact of this renovation on the Birmingham VAMC's operational effectiveness?

This renovation is expected to significantly enhance the Birmingham VAMC's operational effectiveness by modernizing a critical facility. An updated kitchen should improve food safety and quality, potentially boosting patient satisfaction and staff morale. Modern equipment can also lead to greater energy efficiency and reduced maintenance costs over time. Furthermore, a well-designed and functional kitchen space can streamline food preparation and service processes, ensuring timely and efficient delivery of meals to patients and staff, thereby supporting the overall healthcare mission of the facility.

How has VA spending on facility renovations trended in recent years?

VA spending on facility renovations has generally trended upwards in recent years, driven by an aging infrastructure and the need to modernize healthcare facilities to meet evolving medical standards and veteran needs. The VA manages a vast portfolio of buildings, many of which require significant capital investment for repairs, upgrades, and new construction. Congressional appropriations and specific funding initiatives often target improvements in medical equipment, patient care areas, and essential support services like kitchens. Analyzing historical VA budget allocations for facilities management and construction would provide a clearer picture of this trend.

What are the implications of the 'after exclusion of sources' clause in the competition type?

The 'after exclusion of sources' clause in the 'full and open competition after exclusion of sources' designation indicates that while the competition was intended to be broad, certain potential sources were specifically excluded from bidding. This exclusion must be justified based on specific criteria, such as unique capabilities, past performance, or other factors deemed essential for the project's success. While it aims for broad competition, the exclusion of specific sources could potentially limit the number of bidders and, in some cases, may raise questions about whether the most competitive pricing was achieved compared to a truly unrestricted full and open competition.

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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 230 HIGHPOINT DR, RIDGELAND, MS, 39157

Business Categories: Category Business, Limited Liability Corporation, Service Disabled Veteran Owned Business, Small Business, Sole Proprietorship, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $6,616,122

Exercised Options: $6,616,122

Current Obligation: $6,616,122

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C24719D0024

IDV Type: IDC

Timeline