VA awards $11.66M for building construction in South Dakota, highlighting firm fixed-price contract

Contract Overview

Contract Amount: $11,662,000 ($11.7M)

Contractor: Pedersen & Rangel

Awarding Agency: Department of Veterans Affairs

Start Date: 2025-10-09

End Date: 2027-06-12

Contract Duration: 611 days

Daily Burn Rate: $19.1K/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: 568A4-21-208, DOM RENO ROOMS BLDG. 8

Place of Performance

Location: HOT SPRINGS, FALL RIVER County, SOUTH DAKOTA, 57747

State: South Dakota Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $11.7 million to PEDERSEN & RANGEL for work described as: 568A4-21-208, DOM RENO ROOMS BLDG. 8 Key points: 1. Contract value of $11.66 million for construction services. 2. Firm Fixed Price contract type suggests defined scope and cost certainty. 3. Competition level indicates a potentially competitive bidding environment. 4. Contract duration of 611 days points to a significant project timeline. 5. Awarded by the Department of Veterans Affairs, focusing on facility needs. 6. Geographic focus on South Dakota for the construction project.

Value Assessment

Rating: good

The contract value of $11.66 million for commercial and institutional building construction appears reasonable for a project of this scope and duration. Without specific details on the building's size and complexity, direct benchmarking is challenging. However, the firm fixed-price nature of the contract suggests that the contractor has assumed the risk for cost overruns, which can be a positive indicator of value if the scope is well-defined. The number of bids received (4) provides some basis for comparison, suggesting a degree of market interest and potential for competitive pricing.

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 all responsible sources were permitted to submit a bid. The receipt of four bids suggests a healthy level of competition for this requirement. A higher number of bidders generally leads to more competitive pricing and a wider range of solutions, benefiting the government.

Taxpayer Impact: The competitive nature of this award is beneficial for taxpayers as it likely resulted in a more favorable price than a sole-source or limited competition scenario. The presence of multiple bidders helps ensure that the government is not overpaying for the construction services.

Public Impact

The primary beneficiaries are the Department of Veterans Affairs, which will receive improved or new facilities. The contract will deliver construction services for a building project in South Dakota. The geographic impact is concentrated in South Dakota, potentially supporting local economic activity. Workforce implications include job creation for construction workers and related trades in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep in construction projects if not meticulously managed.
Reliance on a single contractor for a significant duration could pose risks if performance issues arise.
Unforeseen site conditions or material cost fluctuations could impact project completion if not adequately addressed in the contract.

Positive Signals

Firm Fixed Price contract provides cost certainty for the government.
Full and open competition suggests a robust bidding process and potential for competitive pricing.
Award to a contractor with experience in commercial and institutional building construction is a positive signal.

Sector Analysis

The commercial and institutional building construction sector is a significant part of the U.S. economy, encompassing a wide range of projects from office buildings to healthcare facilities. Federal spending in this sector often supports infrastructure development and agency operational needs. This contract fits within the broader category of federal construction spending, which can be benchmarked against similar projects awarded by other agencies or at different geographic locations, though specific comparable data is not provided here.

Small Business Impact

The data indicates that small business participation was not a specific set-aside for this contract (ss: false, sb: false). Therefore, the primary impact on small businesses would be through potential subcontracting opportunities if the prime contractor utilizes them. The level of subcontracting and its distribution among small businesses would depend on the prime contractor's strategy and the nature of the construction work required.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of Veterans Affairs contracting officer and project managers. Accountability measures are embedded in the firm fixed-price contract terms, requiring the contractor to deliver the specified construction within the agreed-upon price and timeline. Transparency is generally maintained through contract award databases and reporting requirements, though specific oversight reports or inspector general involvement would depend on performance or potential issues.

Related Government Programs

Department of Veterans Affairs Facility Construction
Federal Building and Renovation Projects
Commercial Construction Contracts
Institutional Building Projects

Risk Flags

Contract Duration
Firm Fixed Price Risk
Scope Definition
Contractor Performance History

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $11.7 million to PEDERSEN & RANGEL. 568A4-21-208, DOM RENO ROOMS BLDG. 8

Who is the contractor on this award?

The obligated recipient is PEDERSEN & RANGEL.

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 $11.7 million.

What is the period of performance?

Start: 2025-10-09. End: 2027-06-12.

What is the specific nature and scope of the building construction project being undertaken for the Department of Veterans Affairs in South Dakota?

The provided data identifies the contract as 'DOM RENO ROOMS BLDG. 8' with a North American Industry Classification System (NAICS) code of 236220 for Commercial and Institutional Building Construction. However, the specific details of the project, such as the size of the building, its intended use (e.g., administrative offices, medical facility, dormitory), and the scope of renovation or new construction, are not explicitly stated in the abbreviated data. Further investigation into the contract's statement of work or associated documentation would be necessary to fully understand the project's objectives and deliverables.

How does the awarded amount of $11.66 million compare to similar VA construction projects in the region or for similar building types?

Benchmarking this $11.66 million contract requires comparison with similar Department of Veterans Affairs (VA) construction projects, ideally within South Dakota or neighboring states, and for comparable building types and sizes. Without access to a detailed database of historical VA construction contracts, including project scope, square footage, and final costs, a precise comparison is difficult. However, the firm fixed-price nature and the receipt of four bids suggest a competitive process that likely aimed to align the price with market rates for similar construction endeavors. A comprehensive analysis would involve reviewing contract award databases for projects with similar NAICS codes and contract values over the past few years.

What are the key performance indicators (KPIs) and potential risks associated with this firm fixed-price construction contract?

Key performance indicators for this firm fixed-price construction contract would likely include adherence to the project schedule (611 days duration), quality of workmanship meeting specified standards, completion within the $11.66 million budget, and compliance with all safety regulations. Potential risks include unforeseen site conditions, delays in material procurement or delivery, labor shortages, changes in regulatory requirements, and contractor performance issues. The firm fixed-price structure shifts the primary financial risk of cost overruns to the contractor, but risks related to schedule delays or quality deficiencies still require diligent oversight from the VA.

What is the track record of the contractor, PEDERSEN & RANGEL, with the Department of Veterans Affairs or similar federal agencies?

Information regarding the specific track record of PEDERSEN & RANGEL with the Department of Veterans Affairs or other federal agencies is not provided in the abbreviated data. To assess their reliability and past performance, one would need to consult federal procurement databases (like SAM.gov or FPDS) for previous contract awards, performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), and any history of disputes or contract terminations. A positive performance history with similar projects would increase confidence in their ability to successfully execute this $11.66 million construction contract.

How does the 'full and open competition after exclusion of sources' method impact the overall cost-effectiveness and taxpayer value of this contract?

The 'full and open competition after exclusion of sources' method is a robust procurement strategy designed to maximize competition and achieve the best value for taxpayers. By allowing all responsible sources to submit offers, it encourages a wide range of proposals and drives down prices through market forces. The fact that four bids were received suggests that the exclusion of specific sources (if any were excluded prior to this stage) did not unduly limit competition. This approach generally leads to more cost-effective outcomes compared to sole-source or limited competition procurements, as it fosters price discovery and incentivizes contractors to offer competitive terms.

What are the implications of the contract duration (611 days) and the firm fixed-price (FFP) type on project management and potential for cost savings or overruns?

A contract duration of 611 days (approximately 20 months) for a $11.66 million construction project indicates a substantial undertaking. The Firm Fixed Price (FFP) contract type means the contractor is obligated to complete the work for the agreed-upon price, regardless of their actual costs. This provides significant cost certainty for the government, as the total expenditure is fixed. However, it places the burden of managing costs and potential overruns on the contractor. For the government, the primary risk shifts from cost overruns to potential issues with schedule adherence or quality if the contractor cuts corners to maintain profitability. Effective project management and oversight by the VA are crucial to ensure timely completion and adherence to quality standards within the fixed price.

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: 36C26325B0018

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 3206 W FAIRGROUNDS LOOP, SPEARFISH, SD, 57783

Business Categories: Category Business, 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: $11,662,000

Exercised Options: $11,662,000

Current Obligation: $11,662,000

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline