VA awards $34.7M for Sioux Falls infrastructure upgrades, with 2 bids received

Contract Overview

Contract Amount: $34,739,656 ($34.7M)

Contractor: Richard Group LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2022-07-18

End Date: 2024-08-08

Contract Duration: 752 days

Daily Burn Rate: $46.2K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: CONTRACTOR TO PROVIDE DESIGN AND CONSTRUCTION SERVICES TO COMPLETE THE SIOUX FALLS INFRASTRUCTURE UPGRADES CONSTRUCTION PROJECT AT THE SIOUX FALLS VAMC.

Place of Performance

Location: SIOUX FALLS, MINNEHAHA County, SOUTH DAKOTA, 57105

State: South Dakota Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $34.7 million to RICHARD GROUP LLC for work described as: CONTRACTOR TO PROVIDE DESIGN AND CONSTRUCTION SERVICES TO COMPLETE THE SIOUX FALLS INFRASTRUCTURE UPGRADES CONSTRUCTION PROJECT AT THE SIOUX FALLS VAMC. Key points: 1. Contract value of $34.7 million for design and construction services. 2. Project aims to complete infrastructure upgrades at the Sioux Falls VAMC. 3. Competition involved two bidders, indicating a moderate level of market interest. 4. The contract type is a Definitive Contract with a Firm Fixed Price. 5. Performance period spans 752 days, from July 2022 to August 2024. 6. The award was made by the Department of Veterans Affairs. 7. The North American Industry Classification System (NAICS) code is 236220 (Commercial and Institutional Building Construction).

Value Assessment

Rating: good

The contract value of $34.7 million appears reasonable for a significant infrastructure upgrade project at a VA medical center. Benchmarking against similar VAMC construction projects would provide a more precise value-for-money assessment. The firm fixed price structure suggests that cost risks are largely borne by the contractor, which can be beneficial for the government if managed effectively. However, without detailed cost breakdowns or comparisons to independent cost estimates, a definitive assessment of pricing efficiency is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition After Exclusion of Sources,' with two bids received. This suggests that while the competition was not entirely unrestricted, it did allow for multiple potential bidders. The limited number of bidders (two) may indicate specific requirements or a niche market for this type of specialized construction. A higher number of bidders typically leads to more competitive pricing and a wider range of solutions.

Taxpayer Impact: With only two bidders, taxpayers may not have benefited from the most competitive pricing achievable through broader market engagement. The limited competition could potentially lead to higher costs than if more firms had participated.

Public Impact

Veterans receiving services at the Sioux Falls VAMC will benefit from improved facilities and infrastructure. The project delivers essential construction and design services to modernize a federal healthcare facility. The geographic impact is focused on Sioux Falls, South Dakota. The project will likely involve a construction workforce, contributing to local employment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may result in higher costs for taxpayers.
Potential for scope creep in infrastructure projects if not tightly managed.
Dependence on a single contractor for a critical facility upgrade.

Positive Signals

Firm Fixed Price contract shifts cost risk to the contractor.
Definitive contract provides a clear framework for services.
Project addresses necessary infrastructure upgrades for a VA facility.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector (NAICS 236220). This sector is characterized by the construction of non-residential buildings, including healthcare facilities. The market for such projects can be competitive, but specialized projects like VAMC upgrades may attract fewer, more specialized firms. The total federal spending on construction services is substantial, with VA projects representing a significant portion of healthcare-related construction.

Small Business Impact

The contract data indicates that small business participation was not a specific set-aside (ss: false, sb: false). Therefore, there are no direct subcontracting implications or specific benefits for small businesses mandated by this award. The prime contractor, RICHARD GROUP LLC, will determine any subcontracting opportunities, which are not detailed in the provided data.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of Veterans Affairs contracting officers and project managers. Accountability measures are embedded in the contract terms, including performance standards and payment schedules tied to milestones. Transparency is facilitated through contract databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

VA Medical Facility Construction
Federal Infrastructure Projects
Design-Build Contracts
Commercial Building Construction

Risk Flags

Limited Competition
Potential for Cost Overruns
Schedule Delay Risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $34.7 million to RICHARD GROUP LLC. CONTRACTOR TO PROVIDE DESIGN AND CONSTRUCTION SERVICES TO COMPLETE THE SIOUX FALLS INFRASTRUCTURE UPGRADES CONSTRUCTION PROJECT AT THE SIOUX FALLS VAMC.

Who is the contractor on this award?

The obligated recipient is RICHARD 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 $34.7 million.

What is the period of performance?

Start: 2022-07-18. End: 2024-08-08.

What is the track record of RICHARD GROUP LLC in performing federal construction contracts, particularly for the Department of Veterans Affairs?

RICHARD GROUP LLC has been awarded federal contracts, including this one from the Department of Veterans Affairs. A comprehensive review of their past performance would involve examining contract databases for details on project types, values, completion timeliness, and any reported issues or awards. For this specific contract, the 'st' field indicates 'SD' (Small Disadvantaged Business status), which might be relevant to their business profile. Further analysis would require accessing detailed performance reports and past performance questionnaires if available through government systems.

How does the awarded amount of $34.7 million compare to similar VAMC infrastructure upgrade projects?

Benchmarking this $34.7 million contract against similar VAMC infrastructure upgrade projects requires access to a database of comparable federal construction contracts. Factors such as project scope, size (square footage), complexity, location, and the specific types of upgrades (e.g., HVAC, electrical, structural) are crucial for a fair comparison. Without specific data on comparable projects, it's difficult to definitively state whether this award represents excellent, fair, or questionable value. However, for a significant VAMC project, this value range is plausible, but detailed cost analysis and comparison are needed for a precise assessment.

What are the primary risks associated with this Definitive Contract for infrastructure upgrades?

The primary risks associated with this Definitive Contract for infrastructure upgrades include potential cost overruns if the fixed-price contract does not adequately account for unforeseen site conditions or material price fluctuations, although the contractor bears much of this risk. Schedule delays are also a risk, especially in construction projects, which could impact the VAMC's operations. Contractor performance risk, ensuring the quality and timeliness of the design and construction, is another key concern. Finally, scope creep, where additional requirements are added beyond the original agreement, could lead to increased costs and delays if not managed rigorously.

How effective is the 'Full and Open Competition After Exclusion of Sources' method in ensuring competitive pricing for VAMC construction?

The effectiveness of 'Full and Open Competition After Exclusion of Sources' in ensuring competitive pricing can be variable. While it allows for broader participation than a sole-source award, excluding certain sources might limit the pool of qualified bidders. In this case, with only two bidders, the competition might not have been as robust as a truly unrestricted full and open competition. The effectiveness hinges on whether the excluded sources were genuinely unqualified or if their exclusion artificially limited competition. A higher number of bidders generally correlates with better price discovery and potentially lower costs for the government.

What is the historical spending pattern for infrastructure upgrades at the Sioux Falls VAMC or similar facilities?

Analyzing historical spending patterns for infrastructure upgrades at the Sioux Falls VAMC or similar facilities would require accessing historical contract data for these specific locations or types of projects. This would involve looking at previous contracts awarded for construction, renovation, or upgrade work at the VAMC and comparing their values, scopes, and timelines. Understanding past spending can help identify trends, recurring needs, and the typical cost ranges for such projects, providing context for the current $34.7 million award. Without this historical data, it's challenging to assess if current spending is an anomaly or part of a consistent investment strategy.

What are the implications of the 752-day performance period for the VAMC's operational continuity?

A performance period of 752 days (approximately two years) for infrastructure upgrades at the Sioux Falls VAMC implies a significant, multi-phase project. The implications for operational continuity depend heavily on the nature of the upgrades and the project's phasing. If upgrades are in occupied areas, careful scheduling, temporary relocations, and noise/disruption mitigation will be crucial to minimize impact on patient care and staff. Phased construction, where different sections are worked on sequentially, is often employed to maintain partial facility operation. Clear communication and coordination between the contractor and VAMC administration are essential to manage disruptions effectively.

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: 36C77622R0049

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1944 LEHIGH AVE STE A, GLENVIEW, IL, 60026

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: $34,739,656

Exercised Options: $34,739,656

Current Obligation: $34,739,656

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline