VA awards $7M contract for building upgrades in Ann Arbor, MI, to CAVU-RONCELLI CONSTRUCTION JV-10 LLC

Contract Overview

Contract Amount: $6,984,879 ($7.0M)

Contractor: Cavu-Roncelli Construction JV-10 LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2023-12-04

End Date: 2026-06-10

Contract Duration: 919 days

Daily Burn Rate: $7.6K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: PROJECT 506-20-102, UPGRADE BASEMENT BUILDING 1W, ANN ARBOR, MI

Place of Performance

Location: ANN ARBOR, WASHTENAW County, MICHIGAN, 48105

State: Michigan Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $7.0 million to CAVU-RONCELLI CONSTRUCTION JV-10 LLC for work described as: PROJECT 506-20-102, UPGRADE BASEMENT BUILDING 1W, ANN ARBOR, MI Key points: 1. Contract awarded using full and open competition, suggesting a competitive bidding process. 2. The contract is a firm-fixed-price definitive contract, providing cost certainty for the government. 3. The project involves construction and renovation, falling under the Commercial and Institutional Building Construction NAICS code. 4. The duration of the contract is 919 days, indicating a significant project timeline. 5. The awardee is a joint venture, which may indicate specialized capabilities or capacity. 6. The contract is not set aside for small businesses, implying larger firms were eligible and potentially participated.

Value Assessment

Rating: good

The contract value of approximately $7 million for building upgrades appears reasonable for a project of this scope and duration. Benchmarking against similar construction projects for federal facilities would provide a more precise value-for-money assessment. The firm-fixed-price structure helps manage cost risks for the government. Without specific details on the scope of work (e.g., square footage, type of upgrades), a definitive comparison is challenging, but the award to a joint venture suggests a potentially complex or large-scale undertaking.

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,' which is a specific type of full and open competition. It implies that the agency initially considered excluding certain sources but ultimately opened the competition broadly. The presence of 3 bidders suggests a moderate level of competition for this project. A higher number of bidders typically leads to more competitive pricing, but three bidders can still result in a fair market price, especially if the bidders were well-qualified.

Taxpayer Impact: The competitive nature of this award, despite the initial exclusion of sources, is beneficial for taxpayers as it likely drove down costs compared to a sole-source or limited competition scenario. The presence of multiple bidders ensures that the government receives proposals from various firms, fostering price discovery.

Public Impact

The primary beneficiaries are the Department of Veterans Affairs (VA) and the veterans who utilize the facilities at the Ann Arbor, MI, site. The project will deliver essential upgrades to Building 1W's basement, improving infrastructure and potentially operational efficiency. The geographic impact is localized to Ann Arbor, Michigan, affecting the VA's presence in that region. The contract will likely involve a workforce of construction professionals, tradespeople, and project managers, contributing to local employment in the construction sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen issues arise during basement construction, despite the fixed-price nature.
Dependence on the joint venture's ability to manage the project effectively given its potentially complex structure.
Risk of schedule delays impacting the VA's operational continuity if the project timeline is not met.

Positive Signals

Firm-fixed-price contract provides cost certainty and limits the government's exposure to price fluctuations.
Award to a joint venture may indicate access to specialized expertise and resources for complex construction tasks.
The project addresses necessary infrastructure upgrades, contributing to the long-term viability and safety of VA facilities.

Sector Analysis

The Commercial and Institutional Building Construction sector is a significant 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 often focuses on maintaining and upgrading government facilities, including those managed by the Department of Veterans Affairs. This contract fits within the broader trend of federal agencies investing in infrastructure modernization. Comparable spending benchmarks would typically be derived from data on similar VA facility renovation projects or general commercial construction costs in the Midwest region.

Small Business Impact

This contract was not awarded as a small business set-aside, as indicated by `ss: false`. This means that the competition was open to all eligible businesses, including large contractors. While there is no direct subcontracting requirement specified for small businesses in the provided data, the prime contractor, CAVU-RONCELLI CONSTRUCTION JV-10 LLC, may choose to subcontract portions of the work. The absence of a set-aside suggests that the scale or nature of the project was deemed suitable for larger firms, and it does not directly contribute to the government's small business contracting goals through this specific award.

Oversight & Accountability

Oversight for this contract will primarily be managed by the Department of Veterans Affairs contracting officers and project managers. Accountability measures are embedded in the firm-fixed-price contract terms, which stipulate specific deliverables and timelines. Transparency is facilitated through federal contract databases where award information is published. While no specific Inspector General jurisdiction is mentioned, the VA Office of Inspector General typically oversees VA contracts for fraud, waste, and abuse.

Related Government Programs

Department of Veterans Affairs Facility Modernization Programs
Federal Building and Fire Safety Program
General Services Administration (GSA) Public Buildings Service Construction Projects

Risk Flags

Potential for unforeseen site conditions in basement construction.
Schedule adherence risk due to project duration and complexity.
Contractor performance and quality control.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $7.0 million to CAVU-RONCELLI CONSTRUCTION JV-10 LLC. PROJECT 506-20-102, UPGRADE BASEMENT BUILDING 1W, ANN ARBOR, MI

Who is the contractor on this award?

The obligated recipient is CAVU-RONCELLI CONSTRUCTION JV-10 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 $7.0 million.

What is the period of performance?

Start: 2023-12-04. End: 2026-06-10.

What is the specific scope of work for the basement upgrade in Building 1W?

The provided data does not detail the specific scope of work for the "UPGRADE BASEMENT BUILDING 1W" project. However, based on the NAICS code (236220 - Commercial and Institutional Building Construction), the work likely involves structural repairs, system upgrades (e.g., HVAC, electrical, plumbing), interior renovations, or improvements to accessibility and safety within the basement of Building 1W at the Ann Arbor, MI VA facility. A comprehensive understanding of the scope would require reviewing the contract's Statement of Work (SOW) or Performance Work Statement (PWS), which would outline the exact tasks, materials, and performance standards required.

How does the award price of $6,984,878.89 compare to similar VA basement renovation projects?

Directly comparing the award price of approximately $7 million to similar VA basement renovation projects requires access to a database of comparable federal construction contracts, including their scope, size, location, and specific renovation details. Without such a benchmark, it's difficult to definitively assess if this price represents excellent, good, or fair value. Factors like the age and condition of the existing infrastructure, the complexity of the required upgrades (e.g., hazardous material abatement, seismic retrofitting), and regional construction cost variations significantly influence project pricing. The firm-fixed-price nature suggests the VA aimed for cost certainty, but a detailed cost-benefit analysis against similar projects would be needed for a precise value assessment.

What are the key risks associated with this firm-fixed-price contract for basement construction?

While firm-fixed-price contracts offer cost certainty to the government, risks remain, particularly in construction. For this basement upgrade, potential risks include unforeseen site conditions (e.g., discovering undocumented utilities, soil instability, or structural issues) that could lead to change orders and increased costs, despite the fixed price. Schedule delays are another significant risk, potentially stemming from weather, labor shortages, or supply chain disruptions, which could impact the VA's operations. Contractor performance risk is also present; if the joint venture lacks sufficient experience or resources, quality issues or delays could arise. The government's primary mitigation strategy involves thorough pre-award site assessments and robust contract administration.

What is the track record of CAVU-RONCELLI CONSTRUCTION JV-10 LLC?

The provided data identifies CAVU-RONCELLI CONSTRUCTION JV-10 LLC as the awardee. To assess their track record, one would need to examine their past performance on federal contracts, particularly those involving similar construction and renovation projects. Information regarding their experience with the Department of Veterans Affairs, their history of meeting schedule and budget requirements, and any past performance evaluations would be crucial. As a joint venture, understanding the track records of its constituent companies (CAVU and RONCELLI) would also be important. Publicly available contract databases and performance reports (if accessible) would be the primary sources for this information.

How does the competition level (3 bidders) impact the value received by the VA?

Having three bidders for this contract suggests a moderate level of competition. While more bidders generally lead to lower prices and greater innovation, three qualified bidders can still provide sufficient price discovery and encourage competitive proposals. The VA likely benefited from receiving multiple offers, allowing them to compare technical approaches and pricing. If the bidders were all highly capable and actively sought the contract, the resulting price is likely to be fair market value. However, if the pool of qualified bidders was limited, or if only one or two were truly competitive, the value might be less optimal than with broader competition.

What are the implications of this contract being a 'definitive contract'?

A definitive contract is a standard, legally binding agreement that specifies all terms and conditions, including price, quantity, and delivery schedule. In this case, it being a 'definitive contract' means that all aspects of the project, including the $6.98 million price and the end date of June 10, 2026, are clearly defined and agreed upon upfront. This contrasts with indefinite-delivery/indefinite-quantity (IDIQ) contracts, which allow for more flexibility but less upfront certainty. For a project like a basement upgrade with a defined scope, a definitive contract provides the government with a clear understanding of its obligations and the expected outcomes, simplifying management and financial planning.

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 AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SEALED BID

Solicitation ID: 36C25023B0027

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: $6,984,879

Exercised Options: $6,984,879

Current Obligation: $6,984,879

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline