VA awards $7.99M contract for mental health bed expansion in Michigan

Contract Overview

Contract Amount: $7,989,026 ($8.0M)

Contractor: Cavu-Roncelli a Joint Venture LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2022-10-25

End Date: 2026-07-31

Contract Duration: 1,375 days

Daily Burn Rate: $5.8K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: PROJECT 506-21-101 INCREASE MENTAL HEALTH BEDS

Place of Performance

Location: ANN ARBOR, WASHTENAW County, MICHIGAN, 48105

State: Michigan Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $8.0 million to CAVU-RONCELLI A JOINT VENTURE LLC for work described as: PROJECT 506-21-101 INCREASE MENTAL HEALTH BEDS Key points: 1. Contract aims to increase critical mental health bed capacity for veterans. 2. Competition was full and open, suggesting a competitive bidding process. 3. The contract type is a firm-fixed-price definitive contract, providing cost certainty. 4. Performance period extends over three years, indicating a significant project duration. 5. The project falls under commercial and institutional building construction. 6. The awardee is CAVU-RONCELLI A JOINT VENTURE LLC.

Value Assessment

Rating: good

The contract value of $7.99 million for increasing mental health beds appears reasonable given the scope and duration. While direct comparisons are difficult without more specific project details, the firm-fixed-price structure suggests the contractor bears cost overruns. The Department of Veterans Affairs (VA) has a consistent need for such services, and this award addresses a critical capacity gap. Benchmarking against similar construction projects for healthcare facilities would provide further insight into value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition after exclusion of sources, indicating that all responsible sources were permitted to submit offers. The fact that it was competed suggests a healthy market for this type of construction. The number of bidders is not specified, but the open competition generally leads to better price discovery and potentially more favorable terms for the government.

Taxpayer Impact: Taxpayers benefit from a competitive process that is expected to yield a fair price for the construction services, ensuring funds are used efficiently to meet veteran healthcare needs.

Public Impact

Veterans in Michigan will benefit from increased access to mental health services. The project will result in the construction or expansion of mental health bed facilities. The geographic impact is focused on Michigan, serving the veteran population in that state. The construction activities will likely involve local labor and subcontractors, providing economic stimulus.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for construction delays impacting timely access to mental health beds.
Ensuring the quality of construction meets the specific needs of mental health facilities.

Positive Signals

Addresses a critical need for mental health services for veterans.
Firm-fixed-price contract provides budget certainty.
Full and open competition suggests a robust market and fair pricing.

Sector Analysis

The healthcare construction sector is a significant part of the broader construction industry, characterized by specialized requirements for medical facilities. Projects like this involve building or renovating spaces designed for patient care, often requiring adherence to strict health and safety regulations. The Department of Veterans Affairs is a major federal entity with ongoing needs for healthcare infrastructure, making this contract a typical example of their investment in facilities to serve veterans. Market size for healthcare construction is substantial, driven by demand for new facilities, upgrades, and expansions.

Small Business Impact

The data indicates that small business participation was not a specific set-aside for this contract (ss: false, sb: false). While the prime contractor is a joint venture, the implications for subcontracting to small businesses are not detailed in this award notice. Further analysis would be needed to determine if subcontracting plans include provisions for small business engagement, which is crucial for fostering the small business ecosystem within federal contracting.

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, requiring the contractor to deliver the specified construction within the agreed budget. Transparency is generally maintained through federal contract databases, though specific oversight reports or inspector general involvement would depend on project performance and any identified issues.

Related Government Programs

Department of Veterans Affairs Healthcare Construction
Mental Health Services for Veterans
Federal Construction Contracts
Definitive Contracts

Risk Flags

Potential for construction delays
Ensuring quality standards for healthcare facilities

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $8.0 million to CAVU-RONCELLI A JOINT VENTURE LLC. PROJECT 506-21-101 INCREASE MENTAL HEALTH BEDS

Who is the contractor on this award?

The obligated recipient is CAVU-RONCELLI A JOINT VENTURE 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 $8.0 million.

What is the period of performance?

Start: 2022-10-25. End: 2026-07-31.

What is the historical spending pattern of the Department of Veterans Affairs on mental health bed expansion projects?

The Department of Veterans Affairs (VA) has consistently allocated significant funding towards expanding mental health services, including bed capacity, to address the growing needs of the veteran population. Historical data shows a trend of increasing investment in mental healthcare infrastructure over the past decade. For instance, in fiscal years prior to this award, the VA has awarded numerous contracts for construction, renovation, and service provision related to mental health. These investments are driven by legislative mandates, increased veteran demand, and a recognition of the critical importance of mental well-being. Specific spending figures fluctuate annually based on budget appropriations and identified project needs, but the overall trajectory indicates a sustained commitment to enhancing mental health resources. This $7.99 million contract for Michigan is part of that broader, ongoing effort to bolster the VA's mental healthcare capabilities nationwide.

How does the awarded amount compare to similar mental health facility construction contracts by other federal agencies?

Comparing this $7.99 million contract to similar mental health facility construction projects across federal agencies requires access to a broad dataset of comparable awards. However, for a project focused on increasing mental health bed capacity, this value appears within a reasonable range, particularly considering it's a definitive contract with a multi-year performance period (ending July 2026). The Department of Defense and other health-focused agencies also undertake such projects. Factors influencing cost include geographic location (labor and material costs), facility size, specific technological requirements, and the complexity of construction. Without detailed project specifications (e.g., number of beds, square footage, specific therapeutic environments), a precise benchmark is challenging. However, the firm-fixed-price nature suggests a defined scope, and the full and open competition implies market-driven pricing.

What are the key performance indicators (KPIs) for this contract, and how will success be measured?

Key performance indicators (KPIs) for this construction contract would primarily focus on the successful completion of the project according to the defined scope, schedule, and quality standards. Specific KPIs would likely include: 1. On-time completion: Meeting the established milestones and final delivery date of July 31, 2026. 2. Budget adherence: Completing the construction within the $7.99 million firm-fixed-price. 3. Quality of construction: Ensuring the facility meets all building codes, VA standards for healthcare facilities, and specific requirements for mental health environments (e.g., safety, therapeutic design). 4. Functionality: The completed beds and associated facilities must be fully operational and suitable for patient use. Success measurement would involve regular site inspections, progress reports from the contractor, and final acceptance testing by VA officials. Any deviations from the contract terms, schedule, or quality standards would be addressed through contractual remedies.

What is the track record of CAVU-RONCELLI A JOINT VENTURE LLC in performing similar federal construction contracts?

Assessing the track record of CAVU-RONCELLI A JOINT VENTURE LLC requires a review of their past performance on federal contracts, particularly those involving healthcare or institutional construction. As a joint venture, its performance history might be a composite of its constituent companies or specific to projects undertaken under the JV banner. Publicly available contract databases (like SAM.gov or FPDS) would typically contain records of past awards, contract values, and performance ratings. A thorough analysis would look for experience in similar project types (e.g., medical facilities, behavioral health centers), contract types (firm-fixed-price), and agencies served. Positive indicators would include a history of successful, on-time, and within-budget project completions with good performance evaluations. Conversely, any history of disputes, contract terminations, or poor performance ratings would be a concern.

What are the potential risks associated with this contract, and what mitigation strategies are in place?

Potential risks for this mental health bed expansion contract include construction delays due to unforeseen site conditions, material shortages, labor issues, or weather impacts. There's also a risk related to cost overruns if the firm-fixed-price contract doesn't adequately account for all contingencies, although the primary cost risk here lies with the contractor. Quality control is another risk area, ensuring the facility meets stringent healthcare standards. Mitigation strategies typically involve robust project management by the VA, clear contract terms, regular site inspections, pre-qualification of subcontractors, and contingency planning within the project schedule. The contractor's own risk mitigation plans, including insurance and bonding, are also crucial. The full and open competition may also mitigate risks by selecting a contractor with a proven ability to manage such projects effectively.

Industry Classification

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

Product/Service Code: MAINT, REPAIR, ALTER REAL PROPERTY › MAINT, ALTER, REPAIR BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SEALED BID

Solicitation ID: 36C25022B0051

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 40950 WOODWARD AVE, BLOOMFIELD HILLS, MI, 48304

Business Categories: Category Business, Limited Liability Corporation, Partnership or Limited Liability Partnership, 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: $7,989,026

Exercised Options: $7,989,026

Current Obligation: $7,989,026

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline