VA awards $13M contract for hospital renovation, highlighting need for facility upgrades

Contract Overview

Contract Amount: $12,995,980 ($13.0M)

Contractor: U.S. VET General Contracting, LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2025-03-17

End Date: 2027-03-17

Contract Duration: 730 days

Daily Burn Rate: $17.8K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 7

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: RENOVATE 7B FOR INPATIENT WARD AT THE WM S. MIDDLETON VA HOSPITAL, MADISON WI.

Place of Performance

Location: MADISON, DANE County, WISCONSIN, 53705

State: Wisconsin Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $13.0 million to U.S. VET GENERAL CONTRACTING, LLC for work described as: RENOVATE 7B FOR INPATIENT WARD AT THE WM S. MIDDLETON VA HOSPITAL, MADISON WI. Key points: 1. Contract addresses critical infrastructure needs at a major VA medical center. 2. Full and open competition suggests a robust market for healthcare construction. 3. Fixed-price contract type aims to control costs and manage financial risk. 4. Project duration of two years indicates a significant scope of work. 5. Location in Wisconsin positions the project to serve a specific veteran population. 6. Contractor has a track record that warrants further examination for performance. 7. Potential for follow-on work or similar projects in other VA facilities.

Value Assessment

Rating: good

The $13 million contract for renovating an inpatient ward at the WM S. Middleton VA Hospital appears reasonable given the scope of construction. While specific benchmarks for hospital ward renovations are difficult to pinpoint without detailed project specifications, the firm-fixed-price structure suggests an effort to lock in costs. Comparing this to similar large-scale healthcare construction projects, the price per square foot or per bed would be a key metric for a more precise value assessment. The award to U.S. VET GENERAL CONTRACTING, LLC, a relatively new entity, necessitates close monitoring of performance to ensure value is realized.

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 the VA actively sought bids from all qualified contractors. The presence of 7 bidders suggests a healthy level of competition for this type of specialized healthcare construction. This competitive environment is generally favorable for price discovery, as it incentivizes contractors to offer competitive pricing to win the bid. The exclusion of sources clause might indicate specific pre-qualification criteria were met by the bidders.

Taxpayer Impact: The robust competition for this contract is beneficial for taxpayers, as it likely drove down the final price compared to a sole-source or limited competition scenario. It ensures that taxpayer funds are being used efficiently by leveraging market forces to secure the best possible value.

Public Impact

Veterans in Madison, Wisconsin, and surrounding areas will benefit from improved inpatient facilities. The renovation will enhance the quality and capacity of healthcare services provided at the WM S. Middleton VA Hospital. The project is geographically focused on Madison, Wisconsin, impacting the local economy. Construction activities will likely create temporary employment opportunities for skilled trades in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Contractor's limited established track record in large-scale VA hospital renovations.
Potential for scope creep or unforeseen issues in older hospital infrastructure.
Dependence on specific materials or supply chains that could face disruptions.
Ensuring compliance with stringent healthcare facility regulations throughout the project.
Managing the impact of construction on ongoing hospital operations and patient care.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Full and open competition suggests a competitive bidding process.
Project aims to address critical infrastructure needs for veteran healthcare.
Contract duration is clearly defined, allowing for project planning.
Awarding agency is the Department of Veterans Affairs, with direct oversight.

Sector Analysis

The healthcare construction sector is a significant segment of the broader construction industry, characterized by specialized requirements for facilities, stringent regulatory compliance, and the need for experienced contractors. Projects like this renovation are crucial for maintaining and upgrading aging healthcare infrastructure, particularly within the federal system. The market for healthcare construction is driven by demand for new facilities, expansions, and modernizations. Benchmarking this contract against similar hospital renovation projects would involve comparing cost per square foot, cost per bed, and project complexity.

Small Business Impact

This contract was awarded under full and open competition and does not indicate a specific small business set-aside. Therefore, the direct impact on small business set-asides is minimal. However, the prime contractor, U.S. VET GENERAL CONTRACTING, LLC, may engage small businesses as subcontractors. Analysis of subcontracting plans would be necessary to determine the extent of small business participation and its impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract will be primarily managed by the Department of Veterans Affairs, the awarding agency. As a definitive contract with a fixed-price structure, accountability measures are built into the payment terms and project milestones. Transparency is expected through contract reporting mechanisms. The Inspector General for the Department of Veterans Affairs would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

VA Hospital Construction Projects
Healthcare Facility Renovations
Medical Center Infrastructure Upgrades
Department of Veterans Affairs Capital Investments

Risk Flags

Contractor Performance Risk
Scope Creep Potential
Disruption to Operations
Unforeseen Site Conditions

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $13.0 million to U.S. VET GENERAL CONTRACTING, LLC. RENOVATE 7B FOR INPATIENT WARD AT THE WM S. MIDDLETON VA HOSPITAL, MADISON WI.

Who is the contractor on this award?

The obligated recipient is U.S. VET GENERAL CONTRACTING, 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 $13.0 million.

What is the period of performance?

Start: 2025-03-17. End: 2027-03-17.

What is the track record of U.S. VET GENERAL CONTRACTING, LLC, particularly on similar VA hospital renovation projects?

Information on U.S. VET GENERAL CONTRACTING, LLC's specific track record on large-scale VA hospital renovations is limited, as the company appears to be relatively new or has not had numerous high-profile federal contracts of this magnitude. A deeper dive into their past performance, client references, and any prior government audits or performance reviews would be necessary to fully assess their capabilities and reliability for this $13 million project. The award itself, under full and open competition, suggests they met the minimum qualifications, but sustained monitoring will be key to ensuring successful project completion and value for taxpayer dollars.

How does the $13 million cost compare to similar inpatient ward renovation projects at other VA hospitals or comparable healthcare facilities?

A direct cost comparison for this $13 million inpatient ward renovation is challenging without detailed project specifications, such as square footage, scope of work (e.g., structural, MEP, finishes), and specific equipment being installed. However, for context, large-scale hospital renovations can range significantly, often costing hundreds or even thousands of dollars per square foot depending on complexity. If this renovation involves a substantial portion of a ward or significant upgrades to critical systems, the $13 million figure could be within a reasonable range. Benchmarking against similar projects would require access to detailed cost breakdowns and project scopes from the VA's historical data or industry cost databases.

What are the primary risks associated with renovating an existing inpatient ward in an operational hospital?

Renovating an operational inpatient ward presents several key risks. Foremost is the potential disruption to ongoing patient care and hospital operations, requiring meticulous phasing and scheduling to minimize noise, dust, and access limitations. Secondly, unforeseen conditions within existing building infrastructure (e.g., outdated electrical, plumbing, or structural issues) can lead to scope creep and cost overruns, even with a fixed-price contract. Thirdly, maintaining infection control standards during construction is paramount to prevent healthcare-associated infections. Finally, ensuring the safety of both patients and construction workers in a shared environment requires robust safety protocols and constant vigilance.

What is the expected impact of this renovation on the WM S. Middleton VA Hospital's capacity and quality of care?

This renovation is expected to significantly enhance the capacity and quality of care at the WM S. Middleton VA Hospital by modernizing an existing inpatient ward. Upgrades typically include improved patient room layouts, updated medical gas systems, enhanced technology infrastructure for electronic health records and telehealth, better lighting, and improved accessibility. These improvements should lead to a more efficient workflow for medical staff, a safer and more comfortable environment for patients, and potentially an increase in the number of beds or the types of services that can be offered within that ward. The overall goal is to provide state-of-the-art facilities that support the delivery of high-quality veteran healthcare.

How has federal spending on healthcare facility construction and renovation trended over the past five years, and does this contract align with those trends?

Federal spending on healthcare facility construction and renovation, particularly by agencies like the Department of Veterans Affairs (VA), has generally seen consistent investment, driven by the need to maintain and modernize aging infrastructure and expand capacity to meet veteran demand. While specific year-over-year figures fluctuate based on budget appropriations and project pipelines, there's a sustained focus on upgrading medical facilities. This $13 million contract for a ward renovation aligns with this trend, representing a typical investment in maintaining and improving a critical component of a VA medical center. It reflects the ongoing commitment to addressing infrastructure deficits within the VA system.

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: 36C25224B0016

Offers Received: 7

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 5350 PAULSON RD, MC FARLAND, WI, 53558

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: $12,995,980

Exercised Options: $12,995,980

Current Obligation: $12,995,980

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline