Covenant Construction Services LLC awarded $10.1M contract for VA Medical Center remodel, a firm-fixed-price definitive contract

Contract Overview

Contract Amount: $10,086,621 ($10.1M)

Contractor: Covenant Construction Services LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2021-01-14

End Date: 2026-03-02

Contract Duration: 1,873 days

Daily Burn Rate: $5.4K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: PN#636A6-18-313, REMODEL ICU AND TELE (DM) AT THE DES MOINES VA MEDICAL CENTER LOCATED IN DES MOINES, IOWA

Place of Performance

Location: DES MOINES, POLK County, IOWA, 50310

State: Iowa Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $10.1 million to COVENANT CONSTRUCTION SERVICES LLC for work described as: PN#636A6-18-313, REMODEL ICU AND TELE (DM) AT THE DES MOINES VA MEDICAL CENTER LOCATED IN DES MOINES, IOWA Key points: 1. The contract's firm-fixed-price structure aims to control costs for the VA Medical Center remodel. 2. Awarded through full and open competition, suggesting a competitive bidding process. 3. The contract duration of 1873 days indicates a significant, long-term project. 4. The project is located in Des Moines, Iowa, impacting local construction services. 5. The North American Industry Classification System (NAICS) code 236220 points to commercial and institutional building construction. 6. The contract value of approximately $10.1 million falls within a moderate spending range for such projects.

Value Assessment

Rating: good

The contract value of $10.1 million for remodeling an ICU and telemetry unit at a VA Medical Center appears reasonable given the scope and duration. Benchmarking against similar large-scale healthcare facility renovations would provide a more precise value-for-money assessment. The firm-fixed-price contract type suggests the government has locked in costs, which is generally favorable for predictable budgeting. However, without detailed cost breakdowns or comparisons to similar projects, a definitive assessment of exceptional value is difficult.

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 solicitation was broadly advertised, and all responsible sources were permitted to submit offers. The presence of 4 bidders, as suggested by the 'no' field, points to a healthy level of competition for this project. This competitive environment is generally expected to drive down prices and encourage innovative solutions from contractors.

Taxpayer Impact: A competitive bidding process helps ensure that taxpayer dollars are used efficiently by fostering price discovery and preventing inflated costs. The multiple bids received suggest that the government secured a fair market price for the construction services.

Public Impact

The primary beneficiaries are veterans and staff at the Des Moines VA Medical Center, who will receive updated and improved facilities. The project will deliver essential upgrades to critical care areas, enhancing the quality of healthcare services provided. The geographic impact is concentrated in Des Moines, Iowa, supporting the local economy through construction jobs and related services. The construction activities will likely involve a significant workforce, including skilled tradespeople and project management personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen construction challenges arise, despite the fixed-price nature.
Delays in project completion could impact the availability of critical healthcare services.
Ensuring compliance with stringent healthcare facility construction standards requires diligent oversight.

Positive Signals

The firm-fixed-price contract provides cost certainty for the government.
The use of full and open competition suggests a robust selection process.
The long contract duration allows for thorough planning and execution of complex renovations.

Sector Analysis

This contract falls within the commercial and institutional building construction sector, specifically focusing on healthcare facilities. The market for healthcare construction is substantial, driven by the need for modernization, expansion, and compliance with evolving medical technologies and regulations. Projects like this are critical for maintaining and upgrading the infrastructure of healthcare providers, including government entities like the VA. Comparable spending benchmarks would typically involve analyzing the cost per square foot or per bed for similar hospital or clinic renovation projects.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, the primary contractor, Covenant Construction Services LLC, is likely a larger entity. There is no explicit information on subcontracting plans for small businesses within this data, which would typically be detailed in the contract's terms and conditions. The absence of a small business set-aside means that opportunities for small business participation may be limited to subcontracting roles, if any are mandated or pursued by the prime contractor.

Oversight & Accountability

Oversight for this 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 completion of work to specified standards. Transparency is generally facilitated through contract award databases and public reporting, though detailed project progress and financial oversight are internal VA processes. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

VA Medical Facility Construction and Renovation Projects
Healthcare Infrastructure Modernization
Federal Building and Construction Contracts
Department of Veterans Affairs Capital Investments

Risk Flags

Potential for scope creep in complex medical facility renovations.
Risk of unforeseen site conditions impacting schedule and budget.
Contractor's past performance on similar large-scale healthcare projects.
Ensuring compliance with stringent healthcare construction regulations.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $10.1 million to COVENANT CONSTRUCTION SERVICES LLC. PN#636A6-18-313, REMODEL ICU AND TELE (DM) AT THE DES MOINES VA MEDICAL CENTER LOCATED IN DES MOINES, IOWA

Who is the contractor on this award?

The obligated recipient is COVENANT CONSTRUCTION SERVICES 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 $10.1 million.

What is the period of performance?

Start: 2021-01-14. End: 2026-03-02.

What is the track record of Covenant Construction Services LLC with federal contracts, particularly within the Department of Veterans Affairs?

To assess Covenant Construction Services LLC's track record, a review of their past federal contract awards and performance history would be necessary. This would involve examining databases like SAM.gov or FPDS for previous awards, contract values, and any associated performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS). Specific attention should be paid to their experience with similar healthcare construction or renovation projects, especially for the VA. A history of successful, on-time, and within-budget project completion, particularly for complex medical facilities, would indicate a lower risk profile. Conversely, a pattern of disputes, delays, or performance issues would raise concerns about their capacity to execute this $10.1 million project effectively.

How does the awarded amount of $10.1 million compare to the average cost of similar ICU and telemetry unit renovations at VA medical centers?

Benchmarking the $10.1 million contract against similar projects requires access to a database of comparable VA medical center renovations, including scope, size (square footage), and specific upgrades (e.g., ICU vs. telemetry). Without such a database, a precise comparison is difficult. However, large-scale renovations of critical care units within active hospitals are inherently complex and costly due to the need for specialized equipment, stringent infection control, and minimal disruption to ongoing patient care. Factors like the age of the facility, specific technological requirements, and local labor costs in Des Moines, Iowa, would influence the final price. If similar projects of comparable complexity and scale have been awarded for significantly less, it might suggest a less than optimal price. Conversely, if it aligns with or is below the average for such specialized work, it indicates good value.

What are the primary risk indicators associated with this specific contract, considering its scope and duration?

Key risk indicators for this contract include the inherent complexities of renovating critical care units (ICU and telemetry) within an operational medical center. This involves managing infection control, ensuring continuity of patient care, and integrating new medical technologies, all of which can lead to unforeseen challenges and cost overruns, even under a fixed-price contract. The long duration of 1873 days (over 5 years) increases the risk of material price escalation, labor shortages, or changes in regulatory requirements. Furthermore, the contractor's experience with similar large-scale, high-stakes healthcare renovations is a critical factor; a lack of demonstrated expertise could elevate performance risks. The specific location in Des Moines, Iowa, might also present localized risks related to labor availability or specific building codes.

How effective is the firm-fixed-price contract type in ensuring program effectiveness for this VA medical center remodel?

The firm-fixed-price (FFP) contract type is generally considered effective for ensuring program effectiveness when the scope of work is well-defined and unlikely to change significantly. For this VA Medical Center remodel, the FFP structure incentivizes the contractor, Covenant Construction Services LLC, to control costs and complete the project efficiently to maximize profit. This can lead to a focus on timely execution and adherence to specifications. However, the effectiveness hinges on the thoroughness of the initial design and specifications. If unforeseen issues arise that require significant scope changes, the FFP structure can lead to costly change orders or disputes, potentially hindering effectiveness. Robust government oversight and clear communication channels are crucial to mitigate these risks and ensure the final product meets the VA's needs.

What are the historical spending patterns for similar building construction contracts awarded by the Department of Veterans Affairs?

Historical spending patterns for similar building construction contracts by the VA reveal a significant and consistent investment in maintaining and upgrading its vast network of medical facilities. The VA frequently awards contracts for new construction, renovations, and specialized upgrades to healthcare infrastructure. Spending varies widely based on project scope, location, and complexity, ranging from smaller localized repairs to multi-million dollar overhauls of major hospital wings. Factors influencing spending include the age of facilities, technological advancements in healthcare, and specific patient care needs. Analyzing past awards for ICU, telemetry, or other critical care unit renovations can provide benchmarks for cost per square foot, typical contract durations, and the prevalence of different contract types (e.g., FFP vs. cost-plus) used by the VA for such projects.

What is the potential impact of the 'exclusion of sources' clause in the contract's competition type on overall cost savings?

The contract type 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' is somewhat unusual and requires clarification. Typically, 'full and open competition' implies the broadest possible solicitation. The phrase 'after exclusion of sources' suggests that certain potential bidders might have been excluded based on specific criteria prior to the main solicitation, or perhaps it refers to a specific phase of a larger procurement. If sources were excluded without a clear, justifiable rationale (e.g., lack of capability, past performance issues), it could potentially limit competition and lead to higher costs for taxpayers. However, if the exclusion was based on legitimate pre-qualification criteria designed to ensure only capable contractors participated, it might streamline the process and ensure a higher quality of bids, potentially leading to better value. The number of bidders (4) suggests some level of competition was achieved.

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: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 36C26320R0070

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2635 BERKSHIRE PARKWAY SUITE 202, CLIVE, IA, 50325

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, 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: $10,086,621

Exercised Options: $10,086,621

Current Obligation: $10,086,621

Subaward Activity

Number of Subawards: 11

Total Subaward Amount: $4,169,593

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline