VA awards $20.5M design-build contract for Little Rock SPS renovation to Venegy Group LLC

Contract Overview

Contract Amount: $20,536,962 ($20.5M)

Contractor: Venergy Group LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2022-02-02

End Date: 2025-10-31

Contract Duration: 1,367 days

Daily Burn Rate: $15.0K/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: LITTLE ROCK SPS RENOVATION DESIGN BID BUILD

Place of Performance

Location: LITTLE ROCK, PULASKI County, ARKANSAS, 72205

State: Arkansas Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $20.5 million to VENERGY GROUP LLC for work described as: LITTLE ROCK SPS RENOVATION DESIGN BID BUILD Key points: 1. Contract awarded via full and open competition after exclusion of sources, indicating a potentially competitive process. 2. The contract type is a definitive contract with a firm fixed price, which shifts risk to the contractor. 3. The duration of 1367 days suggests a complex and lengthy project. 4. The North American Industry Classification System (NAICS) code 236220 points to commercial and institutional building construction. 5. The base award amount is over $15M, placing it in the larger contract category. 6. The contract is managed by the Department of Veterans Affairs, suggesting a focus on facilities supporting veterans.

Value Assessment

Rating: fair

The base award of $20,536,962.02 for a design-build renovation project appears substantial. Without specific benchmarks for similar SPS renovations within the VA or comparable agencies, a precise value-for-money assessment is challenging. However, the firm fixed-price structure suggests the contractor bears the risk of cost overruns, which can be a positive indicator for the government if the price is competitive. Further analysis would require comparing this price to similar projects of comparable scope and complexity.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES'. This indicates that while the competition was intended to be open, certain sources were excluded prior to the solicitation. The number of offers received (3) suggests a moderate level of competition. The exclusion of sources might limit the pool of potential bidders and could potentially impact price discovery, though the 'full and open' aspect aims to mitigate this.

Taxpayer Impact: The moderate competition level means taxpayers may not have received the absolute lowest possible price, but the process aimed for a competitive outcome. The exclusion of sources warrants further scrutiny to ensure it was justified and did not unduly restrict competition.

Public Impact

The primary beneficiaries are likely veterans and VA staff who will utilize the renovated facilities. The contract will deliver design and construction services for the Little Rock SPS (likely a facility or system). The geographic impact is localized to Little Rock, Arkansas. The project will likely involve a workforce of construction professionals, designers, and project managers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if the 'exclusion of sources' led to a less competitive bid.
Project delays are a risk given the long duration and complexity of design-build projects.
Scope creep could increase costs if not managed tightly under the firm fixed-price contract.

Positive Signals

Firm fixed-price contract shifts cost risk to the contractor.
The project aims to improve critical VA infrastructure.
The award was made after a competitive process, albeit with exclusions.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, specifically for government facilities. The construction industry is a significant part of the US economy, with federal construction spending often focused on infrastructure, defense, and healthcare facilities. Benchmarking this contract's value would require comparing it to other large-scale design-build projects for similar institutional buildings, considering regional labor and material costs.

Small Business Impact

The data indicates that small business participation (sb) is false, meaning this contract was not set aside for small businesses. There is no explicit information on subcontracting plans for small businesses. This suggests that large businesses are expected to perform the majority of the work, and the impact on the small business ecosystem may be indirect, potentially through opportunities for material suppliers or specialized subcontractors if not explicitly mandated.

Oversight & Accountability

Oversight will likely be conducted by the Department of Veterans Affairs contracting officers and project managers. Accountability measures are inherent in the firm fixed-price contract, with penalties for non-performance or delays. Transparency may be enhanced through public contract databases, but specific details on oversight mechanisms and Inspector General involvement would require further investigation into VA's internal procedures for this contract.

Related Government Programs

VA Capital Asset and Business Process Realignment
Federal Buildings Fund
Military Construction, Veterans Affairs, and Related Agencies Appropriations Act

Risk Flags

Potential for limited competition due to source exclusion.
Long contract duration increases risk of cost escalation (if not fully fixed) and delays.
Firm Fixed Price contract shifts risk to contractor, but requires careful initial pricing.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $20.5 million to VENERGY GROUP LLC. LITTLE ROCK SPS RENOVATION DESIGN BID BUILD

Who is the contractor on this award?

The obligated recipient is VENERGY 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 $20.5 million.

What is the period of performance?

Start: 2022-02-02. End: 2025-10-31.

What is the track record of Venegy Group LLC on similar VA or federal construction projects?

Assessing the track record of Venegy Group LLC requires a deep dive into federal procurement databases like SAM.gov and FPDS. Specifically, one would look for past performance ratings on similar design-build contracts, particularly those managed by the Department of Veterans Affairs or other agencies with comparable facility needs. Key indicators include on-time and on-budget performance, quality of work, and any history of disputes or contract terminations. Without this specific data, it's difficult to definitively assess their capability for this $20.5M project. A review of their contract history would reveal if they have successfully managed projects of this scale and complexity before, and how they have handled challenges.

How does the $20.5M award compare to the estimated cost or budget for the Little Rock SPS renovation?

The provided data shows the award amount ($20,536,962.02) but does not include the government's original estimate or budget for the Little Rock SPS renovation. To assess value for money, this award amount should be compared against the independent government cost estimate (IGCE). If the award is significantly below the IGCE, it may indicate strong competition or a favorable market. Conversely, if it's close to or above the IGCE, it could suggest potential issues with the estimate or the competitive landscape. Without the estimated cost, it's impossible to determine if this award represents a good deal for taxpayers.

What specific risks are associated with the 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' award type?

The 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' award type presents a unique risk profile. While it aims for open competition, the initial exclusion of specific sources means the government may have preemptively limited the bidder pool. The risk lies in whether these exclusions were justified and based on objective criteria, or if they inadvertently stifled competition. If the excluded sources were capable and competitive, their absence could lead to higher prices or reduced innovation. Furthermore, the justification for exclusion needs to be robust to withstand potential protests and ensure fairness. The number of offers (3) is moderate, suggesting the exclusion might not have severely hampered competition, but it warrants scrutiny.

What is the expected impact of this contract on the operational effectiveness of the Little Rock VA facility?

This contract is for the renovation of the Little Rock SPS (likely a critical facility or system within the VA's infrastructure). The successful and timely completion of this design-build project is expected to enhance the operational effectiveness of the Little Rock VA facility by modernizing its infrastructure, improving functionality, and potentially increasing reliability and safety. Renovations often address deferred maintenance, upgrade outdated systems (like HVAC, electrical, or plumbing), and improve space utilization. This, in turn, can lead to better patient care, improved working conditions for staff, and greater overall efficiency for the facility.

How has VA spending on commercial and institutional building construction trended over the past five years?

Analyzing VA spending trends in commercial and institutional building construction requires accessing historical contract data. Typically, such analysis would involve querying databases like FPDS or USAspending.gov for NAICS code 236220 (or similar construction codes) awarded by the Department of Veterans Affairs over the last five fiscal years. The trend could reveal whether the VA is increasing, decreasing, or maintaining its investment in facility construction and renovation. Factors influencing these trends might include budget appropriations, infrastructure needs assessments, and national priorities related to veteran healthcare facilities.

What are the potential implications of the 1367-day contract duration on project costs and oversight?

A contract duration of 1367 days (approximately 3.75 years) for a design-build renovation project implies significant complexity and scope. For project costs, a longer duration increases exposure to market fluctuations in material prices and labor rates, even under a firm fixed-price contract, if not adequately accounted for in the initial pricing. It also extends the period during which unforeseen conditions could arise. From an oversight perspective, a lengthy contract requires sustained attention from contracting officers and project managers to ensure progress, manage changes, and maintain contractor performance over an extended period. This necessitates robust project management and communication protocols to prevent scope creep and ensure milestones are met.

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: 36C77621R0035

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 3130 SEMINOLE RD, FORT PIERCE, FL, 34951

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: $20,536,962

Exercised Options: $20,536,962

Current Obligation: $20,536,962

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline