VA awards $4.4M for linen distribution center construction in Utah, highlighting construction sector activity

Contract Overview

Contract Amount: $4,443,866 ($4.4M)

Contractor: RHI LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2024-06-01

End Date: 2026-06-19

Contract Duration: 748 days

Daily Burn Rate: $5.9K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 19

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: EXPAND LINEN DISTRIBUTION CENTER

Place of Performance

Location: OGDEN, WEBER County, UTAH, 84404

State: Utah Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $4.4 million to RHI LLC for work described as: EXPAND LINEN DISTRIBUTION CENTER Key points: 1. Contract awarded to RHI LLC for a fixed-price construction project. 2. Competition was full and open after exclusion of sources, indicating a competitive bidding process. 3. The contract duration is 748 days, suggesting a significant construction timeline. 4. The project falls under the Commercial and Institutional Building Construction NAICS code. 5. This award represents a specific investment in healthcare infrastructure by the VA. 6. The contract value is substantial within the context of specialized construction projects.

Value Assessment

Rating: good

The contract value of $4.4 million for a linen distribution center appears reasonable for a construction project of this scope and duration. Benchmarking against similar VA or other federal construction projects for specialized facilities would provide a more precise value-for-money assessment. The firm fixed-price structure helps mitigate cost overrun risks for the government, but the final price is dependent on the contractor's initial bid accuracy.

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,' which suggests that while the competition was intended to be broad, specific sources may have been excluded for defined reasons. The presence of 19 bids indicates a healthy level of interest and competition for this project, which generally leads to better price discovery and potentially more favorable terms for the government.

Taxpayer Impact: A competitive bidding process with multiple bidders helps ensure that taxpayer funds are used efficiently by driving down costs through market forces.

Public Impact

The Department of Veterans Affairs benefits from improved linen distribution capabilities, enhancing operational efficiency. The project will result in the construction of a new linen distribution center, a tangible infrastructure asset. The geographic impact is focused on Utah, potentially creating local construction jobs and economic activity. Workforce implications include employment opportunities for construction workers and related trades during the project's execution.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for delays in construction impacting operational readiness.
Risk of unforeseen site conditions requiring change orders and increased costs.
Ensuring compliance with all building codes and VA facility standards.

Positive Signals

Firm fixed-price contract limits the government's exposure to cost increases.
Robust competition with 19 bids suggests a well-defined scope and market interest.
Clear project duration provides a defined timeline for completion and handover.

Sector Analysis

The construction sector is a significant component of federal spending, encompassing a wide range of projects from infrastructure to specialized facilities. This contract for a linen distribution center falls within the commercial and institutional building construction sub-sector. Federal spending in this area is often driven by the need to maintain and upgrade existing facilities or build new ones to support agency operations. Comparable spending benchmarks would involve analyzing other VA facility construction projects or similar institutional building contracts awarded by other federal agencies.

Small Business Impact

The data does not indicate any specific small business set-aside provisions for this contract. As a full and open competition, it is possible that small businesses participated, but their specific involvement or subcontracting opportunities are not detailed here. Further analysis would be needed to determine if small businesses were prime contractors or significant subcontractors on this project.

Oversight & Accountability

Oversight for this construction contract would typically be managed by the Department of Veterans Affairs contracting officers and project managers. Accountability measures are embedded in the firm fixed-price contract terms, requiring delivery of the specified facility. Transparency is generally maintained through contract award databases like SAM.gov. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected during the contract lifecycle.

Related Government Programs

VA Medical Facility Construction
Federal Building Construction
Healthcare Logistics and Supply Chain Infrastructure
Commercial Building Construction Contracts

Risk Flags

Construction project delays
Potential for cost overruns due to unforeseen site conditions
Compliance with VA facility standards
Supply chain disruptions impacting material availability

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $4.4 million to RHI LLC. EXPAND LINEN DISTRIBUTION CENTER

Who is the contractor on this award?

The obligated recipient is RHI 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 $4.4 million.

What is the period of performance?

Start: 2024-06-01. End: 2026-06-19.

What is the track record of RHI LLC in completing federal construction contracts of similar size and scope?

A review of federal contract databases would be necessary to assess RHI LLC's past performance. Key metrics to examine would include the number of previous federal contracts awarded, their total value, the agencies involved, and the project types. Performance evaluations from past contracts, if available, would provide insights into their timeliness, quality of work, and adherence to budget. Understanding their history with firm fixed-price contracts and projects within the healthcare or institutional building sector would be particularly relevant for this analysis.

How does the awarded price compare to industry benchmarks for similar linen distribution center construction projects?

Benchmarking this $4.4 million contract requires access to detailed cost data for comparable projects, which is often proprietary or not publicly disclosed in full. However, general cost per square foot for institutional or commercial construction in Utah can be researched. Factors such as specialized HVAC, plumbing for laundry services, and specific storage requirements for linens would influence the cost. Comparing the price against the square footage and complexity of the planned facility, relative to regional construction cost indices, would offer a preliminary value assessment.

What are the primary risks associated with the construction of a linen distribution center for the VA?

Key risks include potential construction delays due to weather, labor shortages, or supply chain disruptions for materials. Unforeseen site conditions, such as soil issues or existing underground utilities, could lead to change orders and cost overruns, despite the firm fixed-price nature. Ensuring compliance with stringent VA facility standards and healthcare regulations adds complexity. Furthermore, the operational integration of the new center with existing VA logistics systems presents a risk if not managed effectively post-construction.

What is the expected effectiveness of this new linen distribution center in improving VA's operational efficiency?

The effectiveness hinges on the center's design, capacity, and integration into the VA's supply chain. A well-executed project should centralize and streamline linen management, reducing handling costs, improving inventory control, and ensuring a consistent supply of clean linens to VA facilities in the region. This can lead to cost savings through economies of scale and reduced waste. The primary benefit is enhanced operational support for healthcare delivery by ensuring essential supplies are readily available.

What has been the historical spending trend for similar construction projects by the Department of Veterans Affairs?

Analyzing historical VA spending on construction, particularly for logistics and facility support, would reveal trends in project types, average contract values, and the frequency of such awards. This specific contract for a linen distribution center represents a targeted investment. Understanding if the VA has undertaken similar projects recently or if this is a new initiative would provide context. Examining past spending patterns can help identify potential future needs and budget allocations for infrastructure development within the VA.

Are there any specific performance metrics or milestones tied to the successful completion of this contract?

While not explicitly detailed in the provided data, construction contracts of this magnitude typically include detailed performance specifications and milestones. These often involve phased completion targets (e.g., foundation, structural, interior fit-out), adherence to quality control plans, and final inspection and acceptance. The firm fixed-price nature implies that the contractor is obligated to deliver the completed facility meeting all specified requirements by the contract end date (2026-06-19) to receive final payment.

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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 19

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 668 N 2075 W, MARRIOT-SLATERVILLE, UT, 84404

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $4,443,866

Exercised Options: $4,443,866

Current Obligation: $4,443,866

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C25924D0017

IDV Type: IDC

Timeline