VA awards $4.4M contract for electrical system upgrades in Iowa, aiming to modernize facilities

Contract Overview

Contract Amount: $4,421,268 ($4.4M)

Contractor: BKM Construction LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2024-09-19

End Date: 2026-09-10

Contract Duration: 721 days

Daily Burn Rate: $6.1K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: REPLACE OBSOLETE ELECTRICAL SYSTEMS CONSTRUCTION PROJECT.

Place of Performance

Location: IOWA CITY, JOHNSON County, IOWA, 52246

State: Iowa Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $4.4 million to BKM CONSTRUCTION LLC for work described as: REPLACE OBSOLETE ELECTRICAL SYSTEMS CONSTRUCTION PROJECT. Key points: 1. The contract's fixed-price nature provides cost certainty for the government. 2. Competition was full and open, suggesting a potentially competitive bidding process. 3. The project duration of 721 days indicates a significant scope of work. 4. The award is a delivery order, likely part of a larger indefinite-delivery contract. 5. The North American Industry Classification System (NAICS) code 236220 points to commercial building construction. 6. The contract is being performed in Iowa (IA).

Value Assessment

Rating: good

The contract value of $4.4 million for electrical system upgrades appears reasonable for a project of this scope and duration. Without specific benchmarks for similar VA facility electrical modernizations, a direct comparison is difficult. However, the firm-fixed-price structure helps mitigate cost overrun risks for the government. The project's focus on replacing obsolete systems suggests a necessary investment in infrastructure maintenance and safety.

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.' This indicates that while the competition was generally open, certain sources may have been excluded based on specific criteria, which warrants further investigation. The number of bidders is not specified, but the 'full and open' designation suggests an effort to solicit a broad range of qualified contractors, which typically promotes price discovery and potentially better pricing.

Taxpayer Impact: A full and open competition, even with exclusions, generally benefits taxpayers by encouraging multiple bids and driving down costs compared to sole-source or limited competition scenarios.

Public Impact

Veterans and staff at the VA facility in Iowa will benefit from improved electrical reliability and safety. The project will deliver modernized electrical infrastructure, reducing the risk of system failures. The geographic impact is localized to the specific VA facility in Iowa where the work is performed. The contract will likely create or sustain jobs in the construction sector within the local Iowa economy.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The exclusion of sources in an otherwise 'full and open' competition needs clarification to ensure no qualified contractors were unfairly barred.
Lack of specific details on the number of bidders makes it difficult to fully assess the competitiveness of the award.
The long duration of the project (721 days) could lead to potential disruptions if not managed effectively.

Positive Signals

The use of a firm-fixed-price contract provides budget certainty.
The project addresses critical infrastructure needs by replacing obsolete systems.
The 'full and open' competition framework aims to ensure a competitive award.

Sector Analysis

This contract falls within the commercial and institutional building construction sector, specifically focusing on electrical system upgrades. This sector is vital for maintaining and modernizing public and private infrastructure. Spending on facility upgrades and maintenance for government agencies like the VA is a consistent part of federal budgets, often driven by the need to comply with safety standards, improve energy efficiency, and ensure operational reliability. Comparable spending benchmarks would typically be found within construction cost indices and historical data for similar government building projects.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a delivery order potentially under a larger IDIQ, it's possible that subcontracting opportunities for small businesses may arise, but this is not explicitly detailed in the provided information. The absence of a small business set-aside suggests the primary award was made based on best value or lowest price among all eligible bidders, rather than a specific set-aside program.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of Veterans Affairs contracting officers and project managers. Accountability measures are inherent in the firm-fixed-price contract type, requiring the contractor to complete the work within the agreed-upon price. Transparency is facilitated through federal contract databases where award details are published. Inspector General jurisdiction would apply if any fraud, waste, or abuse related to the contract were suspected.

Related Government Programs

Federal Building and Facilities Construction
Department of Veterans Affairs Construction Projects
Infrastructure Modernization Contracts
Electrical System Upgrades

Risk Flags

Potential for delays due to long project duration.
Need for clarification on 'exclusion of sources' in competition.
Risk of supply chain disruptions for electrical components.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $4.4 million to BKM CONSTRUCTION LLC. REPLACE OBSOLETE ELECTRICAL SYSTEMS CONSTRUCTION PROJECT.

Who is the contractor on this award?

The obligated recipient is BKM CONSTRUCTION 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: 2024-09-19. End: 2026-09-10.

What specific criteria led to the exclusion of certain sources in this 'full and open competition after exclusion of sources' award?

The designation 'full and open competition after exclusion of sources' implies that while the solicitation was broadly advertised, specific contractors or types of contractors were intentionally excluded based on predefined criteria. These criteria could relate to past performance, technical capabilities, security clearances, or specific certifications required for the project. Without access to the solicitation documents or award justification, the exact reasons for exclusion remain unclear. However, such exclusions must be legally justifiable and documented by the agency to ensure fair competition and prevent arbitrary barriers to entry. Understanding these criteria is crucial for assessing whether the competition was truly as open as possible and if it potentially limited the pool of qualified bidders, which could impact pricing and innovation.

How does the $4.4 million cost compare to similar electrical system upgrade projects within the Department of Veterans Affairs?

Benchmarking the $4.4 million cost against similar VA electrical system upgrade projects requires access to historical contract data for projects with comparable scope, size, and complexity. Factors such as the specific facility's age, the extent of obsolescence, the required upgrades (e.g., power distribution, emergency systems, control systems), and geographic location significantly influence project costs. While the firm-fixed-price nature provides cost certainty for this specific award, a comprehensive analysis would involve comparing the cost per square foot or cost per system component against a portfolio of recently awarded VA contracts for similar renovations. Without this detailed comparative data, it's challenging to definitively state whether this contract represents excellent, good, or fair value.

What are the primary risks associated with a 721-day construction project for electrical systems, and how are they mitigated?

A 721-day (approximately two-year) construction timeline for electrical systems presents several risks. These include potential delays due to unforeseen site conditions, supply chain disruptions for specialized electrical components, labor shortages, and scope creep. Furthermore, extended project durations can increase the risk of material price escalation, even under a fixed-price contract if not properly accounted for. Mitigation strategies typically involve robust project management, detailed scheduling with built-in contingencies, proactive vendor management to secure materials early, and clear change order processes. The VA's oversight and the contractor's own risk management plan are critical for identifying and addressing these potential issues throughout the project lifecycle to ensure timely and cost-effective completion.

What is the expected impact of these electrical system upgrades on the operational efficiency and safety of the VA facility?

The primary impact of replacing obsolete electrical systems is expected to be a significant improvement in operational reliability and safety. Obsolete systems are prone to failures, power outages, and can pose electrical hazards, potentially disrupting critical healthcare services. Modernized systems will likely offer greater stability, reduced downtime, and enhanced safety features, ensuring uninterrupted power for essential medical equipment and facilities. This upgrade contributes to maintaining a secure and functional environment for both patients and staff, supporting the VA's mission delivery. Improved energy efficiency might also be a secondary benefit, leading to reduced utility costs over the long term.

How does the contractor, BKM CONSTRUCTION LLC, perform on similar federal contracts, particularly those involving facility construction or upgrades?

Assessing the performance of BKM CONSTRUCTION LLC on similar federal contracts requires reviewing their past performance records, including ratings on previous government awards, any past performance issues or disputes, and their experience with projects of comparable size and technical requirements. Information on their track record with the Department of Veterans Affairs or other federal agencies in facility construction or electrical upgrades would be particularly relevant. A review of contract databases and performance assessment reporting tools (like CPARS) would provide insights into their reliability, quality of work, and adherence to schedule and budget on prior government engagements. This information is crucial for understanding the risk associated with this current award.

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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 501 S 5TH ST, LEAVENWORTH, KS, 66048

Business Categories: Category Business, Limited Liability Corporation, Partnership or Limited Liability Partnership, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $4,421,268

Exercised Options: $4,421,268

Current Obligation: $4,421,268

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C26320D0027

IDV Type: IDC

Timeline