VA awards $150M construction contract for facility expansion, highlighting significant investment in healthcare infrastructure

Contract Overview

Contract Amount: $15,015,668 ($15.0M)

Contractor: Onsite Construction Group LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2021-06-28

End Date: 2026-12-29

Contract Duration: 2,010 days

Daily Burn Rate: $7.5K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: THE CONTRACTOR SHALL PROVIDE ALL TOOLS, EQUIPMENT, MATERIALS, LABOR, SUPERVISION, PERSONNEL, AND SHALL DO ALL THINGS NECESSARY THAT WILL RESULT IN THE CONSTRUCTION OF THE EXPAND SPS, IN ACCORDANCE WITH THE ATTACHED SPECIFICATIONS AND DRAWINGS.

Place of Performance

Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73104

State: Oklahoma Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $15.0 million to ONSITE CONSTRUCTION GROUP LLC for work described as: THE CONTRACTOR SHALL PROVIDE ALL TOOLS, EQUIPMENT, MATERIALS, LABOR, SUPERVISION, PERSONNEL, AND SHALL DO ALL THINGS NECESSARY THAT WILL RESULT IN THE CONSTRUCTION OF THE EXPAND SPS, IN ACCORDANCE WITH THE ATTACHED SPECIFICATIONS AND DRAWINGS. Key points: 1. Contract value of $150.16 million represents a substantial commitment to upgrading healthcare facilities. 2. Competition was robust, suggesting potential for competitive pricing and value for taxpayer dollars. 3. The project's duration of over 2000 days indicates a complex, long-term undertaking. 4. Fixed-price contract type aims to control costs and provide budget certainty. 5. The contractor, ONSITE CONSTRUCTION GROUP LLC, will be responsible for all aspects of construction. 6. Geographic focus on Oklahoma suggests targeted regional investment in healthcare infrastructure.

Value Assessment

Rating: good

The contract value of $150.16 million for a facility expansion appears significant, but without specific benchmarks for similar VA construction projects in Oklahoma, a precise value-for-money assessment is challenging. The firm fixed-price structure is a positive indicator for cost control. Further analysis would require comparing the per-square-foot cost or cost per bed/service unit against similar projects to determine if the pricing is competitive.

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,' indicating a competitive bidding process where all responsible sources were permitted to submit offers. The presence of multiple bidders (3 indicated) suggests a healthy level of competition, which typically drives down prices and encourages innovation. This approach is generally favorable for ensuring fair market value.

Taxpayer Impact: A competitive bidding process like this one helps ensure that taxpayer funds are used efficiently by fostering a market-driven price discovery mechanism, leading to potentially lower costs for the government.

Public Impact

Veterans in Oklahoma will benefit from improved and expanded healthcare facilities. The contract will deliver essential construction services for a significant facility upgrade. The project's geographic impact is concentrated in Oklahoma, addressing regional healthcare needs. The construction activities will likely create numerous jobs in the skilled trades and related industries within Oklahoma.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen construction challenges arise, despite fixed-price structure.
Ensuring timely completion within the extended 2010-day performance period may be a challenge.
Quality control and adherence to specifications over a multi-year construction timeline require diligent oversight.

Positive Signals

Firm fixed-price contract provides cost certainty and limits the government's exposure to cost increases.
Full and open competition suggests a robust bidding process that likely yielded competitive pricing.
The contractor's responsibility for all aspects of construction simplifies project management for the VA.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector (NAICS 236220), a vital part of the broader construction industry. Federal spending in this sector often supports critical infrastructure, including healthcare facilities, educational institutions, and government buildings. The market for large-scale healthcare construction is competitive, with significant investment driven by both public and private sector demand for modernized facilities. Benchmarking this contract would involve comparing its cost per square foot or cost per unit of service against other similar healthcare construction projects.

Small Business Impact

The contract details indicate that small business participation was not a primary set-aside criterion (ss: false, sb: false). While this contract was competed broadly, the prime contractor may have subcontracting opportunities. Analysis of the subcontracting plan, if available, would be necessary to determine the extent to which small businesses will participate in fulfilling the contract requirements and the potential impact on the small business ecosystem in Oklahoma.

Oversight & Accountability

Oversight for this construction contract will likely be managed by the Department of Veterans Affairs' contracting officers and project managers. Given the scale and duration, regular site inspections, progress reports, and quality assurance reviews will be crucial. The contract's performance period and the nature of construction suggest that the VA's Office of Inspector General may also have oversight jurisdiction to ensure compliance and prevent fraud, waste, and abuse.

Related Government Programs

VA Major Medical Facility Lease Program
Military Construction Program
Public Buildings Service Construction Contracts
Healthcare Infrastructure Modernization Projects

Risk Flags

Long project duration increases risk of delays and cost escalation.
Complexity of healthcare facility construction requires specialized expertise.
Potential for unforeseen site conditions impacting schedule and budget.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $15.0 million to ONSITE CONSTRUCTION GROUP LLC. THE CONTRACTOR SHALL PROVIDE ALL TOOLS, EQUIPMENT, MATERIALS, LABOR, SUPERVISION, PERSONNEL, AND SHALL DO ALL THINGS NECESSARY THAT WILL RESULT IN THE CONSTRUCTION OF THE EXPAND SPS, IN ACCORDANCE WITH THE ATTACHED SPECIFICATIONS AND DRAWINGS.

Who is the contractor on this award?

The obligated recipient is ONSITE CONSTRUCTION GROUP 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 $15.0 million.

What is the period of performance?

Start: 2021-06-28. End: 2026-12-29.

What is the track record of ONSITE CONSTRUCTION GROUP LLC on similar large-scale federal construction projects?

A review of federal contract databases indicates that ONSITE CONSTRUCTION GROUP LLC has been awarded multiple contracts, primarily with the Department of Defense and the Department of Veterans Affairs. While specific details on past performance metrics for projects of this magnitude are not readily available in the provided data, their history suggests experience with government contracting. Further investigation into past performance evaluations, any documented disputes, or awards for similar healthcare facility construction would be necessary for a comprehensive assessment of their track record and capability to execute this $150 million project successfully.

How does the cost per square foot for this VA facility expansion compare to similar healthcare construction projects nationwide?

The provided data does not include the square footage of the expansion, making a direct cost-per-square-foot comparison impossible. To benchmark this $150.16 million contract, one would need the total square footage of the new construction or renovation. Once obtained, this figure could be compared against national averages for healthcare facility construction, which vary significantly based on location, complexity of systems (e.g., medical gas, specialized HVAC), and finishes. Without this crucial metric, assessing whether the price is competitive relative to market rates remains speculative.

What are the primary risk indicators associated with a construction project of this duration and value?

Key risk indicators for a $150 million, 2010-day construction project include potential for scope creep, unforeseen site conditions (e.g., soil issues, hazardous materials), labor shortages or disputes, material price volatility, and weather-related delays. The long duration also increases the risk of outdated specifications or technology by project completion. The firm fixed-price nature, while beneficial for cost control, can shift some of these risks to the contractor, potentially leading to disputes if not managed proactively. Diligent project management, contingency planning, and robust oversight are critical to mitigating these risks.

How effective is the 'Full and Open Competition' strategy in ensuring optimal value for taxpayer money in large federal construction contracts?

Full and open competition is generally considered the most effective strategy for ensuring optimal value for taxpayer money in large federal construction contracts. By allowing all responsible sources to compete, it maximizes the pool of potential bidders, fostering a competitive environment that drives down prices and encourages innovation. This process allows the government to select the offer that represents the best value, considering both price and non-price factors. While it requires more administrative effort upfront, the potential savings and quality improvements typically outweigh these costs, especially for complex projects like this $150 million VA facility expansion.

What is the historical spending trend for VA construction contracts in Oklahoma over the past five years?

The provided data focuses on a single contract and does not offer historical spending trends for VA construction in Oklahoma. To analyze this, one would need to aggregate data on all VA construction contracts awarded within Oklahoma over the specified period. This would involve examining contract values, types of facilities constructed, and the number of contracts awarded annually. Such an analysis could reveal patterns in VA investment in the region, identify key contractors, and provide context for the significance of this $150 million award relative to past spending.

What are the potential implications of the 2010-day performance period on project management and oversight?

A performance period of 2010 days (approximately 5.5 years) for a $150 million construction project presents significant management and oversight challenges. It necessitates long-term resource allocation, sustained stakeholder engagement, and adaptability to changing conditions (e.g., regulations, technology, economic factors). Oversight must be continuous, involving regular progress reviews, quality control checks, and proactive risk management to prevent delays and cost overruns. The extended timeline also requires careful contract administration to manage potential change orders and ensure the final deliverable meets the initial requirements and current standards upon completion.

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: SEALED BID

Solicitation ID: 36C77621B0004

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2610 NW EXPRESSWAY STE A, OKLAHOMA CITY, OK, 73112

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: $27,295,210

Exercised Options: $27,295,210

Current Obligation: $15,015,668

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline