VA awards $27.4M contract for energy plant construction, highlighting firm fixed-price structure

Contract Overview

Contract Amount: $27,383,910 ($27.4M)

Contractor: GCH Construction Company

Awarding Agency: Department of Veterans Affairs

Start Date: 2022-08-24

End Date: 2025-06-30

Contract Duration: 1,041 days

Daily Burn Rate: $26.3K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: CONSTRUCT COMBINED ENERGY PLANT, VA NEBRASKA WESTERN IOWA HEALTH CARE SYSTEM

Place of Performance

Location: OMAHA, DOUGLAS County, NEBRASKA, 68105

State: Nebraska Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $27.4 million to GCH CONSTRUCTION COMPANY for work described as: CONSTRUCT COMBINED ENERGY PLANT, VA NEBRASKA WESTERN IOWA HEALTH CARE SYSTEM Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The firm fixed-price contract type aims to provide cost certainty for the government. 3. The project duration of 1041 days indicates a significant construction undertaking. 4. The contract is for constructing a combined energy plant, a critical infrastructure component. 5. The award to GCH Construction Company warrants a review of their past performance and capacity. 6. The geographic location in Nebraska may influence local labor and material costs.

Value Assessment

Rating: good

The contract value of $27.4 million for constructing a combined energy plant appears reasonable given the project's scope and duration. Benchmarking against similar large-scale construction projects for federal facilities would provide a more precise value-for-money assessment. The firm fixed-price structure is a positive indicator for cost control, assuming the initial bid accurately reflected all project requirements and potential risks. Further analysis of the contractor's bid against the government's estimate would be beneficial.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' which implies that while the competition was intended to be open, certain sources may have been excluded prior to the solicitation. This could indicate a specific reason for exclusion, such as prior performance issues or specialized capabilities required. With 5 bids received, the competition level appears moderate, which can still lead to price discovery but might not be as robust as a purely open competition with a larger number of bidders.

Taxpayer Impact: The moderate competition level suggests that taxpayers likely received a competitive price, but there may be an opportunity for even greater savings if a wider range of qualified contractors could have participated without exclusion.

Public Impact

Veterans in the Nebraska Western Iowa region will benefit from improved healthcare infrastructure through a more reliable energy supply. The construction of the combined energy plant will create jobs in the local construction sector. The project ensures the continued operational capacity of the VA Nebraska Western Iowa Health Care System. The successful completion of this project will enhance the resilience and efficiency of the VA facility's energy services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions or material price escalations occur, despite the fixed-price nature.
Risk of schedule delays due to complex construction processes or contractor performance issues.
Ensuring the selected contractor has adequate experience with similar large-scale energy plant construction projects.
The 'exclusion of sources' clause in the competition type warrants further investigation to understand potential limitations on competition.

Positive Signals

Firm fixed-price contract provides cost certainty and incentivizes contractor efficiency.
Awarded after a competitive process with 5 bids, indicating some level of market interest.
The project addresses a critical infrastructure need for a major healthcare facility.
The contract duration is clearly defined, allowing for project planning and oversight.

Sector Analysis

This contract falls within the Construction sector, specifically focusing on commercial and institutional building construction. The energy plant component aligns with infrastructure development and facility support services. The market for federal construction projects is substantial, with significant annual spending across various agencies. Comparable spending benchmarks would involve analyzing other large-scale facility construction or renovation projects within the VA or other federal agencies, particularly those involving energy infrastructure.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications specifically tied to small business set-asides for this particular award. The primary contractor, GCH Construction Company, will likely engage subcontractors based on their own business needs and capabilities, which may or may not include small businesses. The impact on the small business ecosystem would depend on GCH's subcontracting strategy.

Oversight & Accountability

Oversight for this contract will likely 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 hold the contractor responsible for delivering the project within the agreed-upon price. Transparency is generally facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse related to the contract is suspected or reported.

Related Government Programs

VA Facility Construction
Energy Infrastructure Projects
Department of Veterans Affairs Healthcare System Support
Federal Building and Infrastructure Contracts

Risk Flags

Potential for cost overruns due to unforeseen site conditions.
Risk of schedule delays impacting facility operations.
Adequacy of contractor experience for specialized energy plant construction.
Justification for exclusion of sources in the competitive process.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $27.4 million to GCH CONSTRUCTION COMPANY. CONSTRUCT COMBINED ENERGY PLANT, VA NEBRASKA WESTERN IOWA HEALTH CARE SYSTEM

Who is the contractor on this award?

The obligated recipient is GCH CONSTRUCTION COMPANY.

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 $27.4 million.

What is the period of performance?

Start: 2022-08-24. End: 2025-06-30.

What is the track record of GCH Construction Company with federal contracts, particularly those of similar size and scope?

A review of GCH Construction Company's federal contract history is essential to assess their performance and reliability. This would involve examining past awards, contract values, completion timeliness, and any documented performance issues or disputes. For a contract valued at $27.4 million involving energy plant construction, it is crucial to verify if they have successfully managed projects of comparable complexity and scale. Analyzing their past performance on VA contracts specifically would provide further relevant context. A strong track record with successful project delivery and adherence to budget and schedule would be a positive indicator for this current award.

How does the awarded price of $27.4 million compare to similar energy plant construction projects for federal facilities?

To benchmark the value for money, the awarded price of $27.4 million should be compared against similar federal energy plant construction projects. This comparison should consider factors such as project size (square footage, capacity), complexity, geographic location (which impacts labor and material costs), and the specific technologies involved. Data from similar past contracts awarded by the VA or other agencies can serve as a benchmark. If the $27.4 million is significantly higher or lower than comparable projects, it may warrant further investigation into the reasons behind the variance, such as unique project requirements, market conditions, or the competitive landscape at the time of award.

What are the primary risks associated with this firm fixed-price contract for energy plant construction?

While firm fixed-price contracts offer cost certainty, risks remain. For this project, potential risks include unforeseen site conditions (e.g., soil issues, hazardous materials) that could lead to change orders or delays, even if the base price is fixed. Escalation in material costs or labor shortages, particularly for specialized components of an energy plant, could strain the contractor's ability to maintain profitability without seeking adjustments. Contractor performance is also a risk; if GCH Construction Company underperforms, it could lead to schedule delays and potential quality issues, despite the fixed price. The complexity of integrating new energy plant systems with existing facility infrastructure also presents technical risks.

What is the expected effectiveness of the new combined energy plant in improving the VA facility's energy services?

The effectiveness of the new combined energy plant hinges on its design specifications, the technology employed, and its successful integration with the VA Nebraska Western Iowa Health Care System. A well-designed and efficiently operated plant should lead to more reliable and potentially cost-effective energy supply, reducing reliance on external grids and mitigating risks of power outages. This improved energy security is critical for a healthcare facility where uninterrupted power is essential for patient care and life-support systems. The plant's ability to meet current and future energy demands, potentially incorporating renewable sources or energy efficiency measures, will determine its long-term effectiveness and contribution to the VA's operational goals.

How has federal spending on construction projects for healthcare facilities, particularly within the VA, trended in recent years?

Federal spending on construction projects for healthcare facilities, including those managed by the VA, has generally seen significant investment, driven by the need to modernize aging infrastructure, expand capacity, and incorporate new medical technologies. The VA, in particular, has a substantial portfolio of facilities requiring ongoing maintenance, renovation, and new construction. Spending trends can fluctuate based on congressional appropriations, national healthcare priorities, and specific infrastructure needs identified by the agency. Analyzing historical spending data for VA construction projects can reveal patterns in investment levels, types of projects prioritized (e.g., new hospitals, renovations, specialized clinics), and the overall budget allocated to facility modernization.

What does the 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' designation imply for this contract's procurement process?

The designation 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' suggests a procurement process that aimed for broad competition but involved a specific, documented reason for excluding certain potential offerors before the solicitation was issued. This exclusion is typically based on factors such as national security, specific technical requirements that only a limited number of firms possess, or prior performance issues with certain contractors. While it is a form of full and open competition, the exclusion means the pool of potential bidders was intentionally narrowed. Understanding the justification for the exclusion is key to assessing whether it limited competition unnecessarily and potentially impacted the final price or selection of the best-suited contractor.

Industry Classification

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

Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCTION OF BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 36C26322R0065

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 4496 BENTS DR UNIT C, WINDSOR, CO, 80550

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

Financial Breakdown

Contract Ceiling: $27,383,910

Exercised Options: $27,383,910

Current Obligation: $27,383,910

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline