VA awards $36.3M contract for EHRM infrastructure upgrades at Leavenworth VAMC

Contract Overview

Contract Amount: $36,342,137 ($36.3M)

Contractor: AC JV ONE LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2022-09-01

End Date: 2024-09-09

Contract Duration: 739 days

Daily Burn Rate: $49.2K/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: THIS PROJECT IS TO PROCURE THE CONSTRUCTION FOR THE EHRM INFRASTRUCTURE UPGRADES CONSTRUCTION PROJECT AT THE DWIGHT D EISENHOWER VAMC IN LEAVENWORTH, KS

Place of Performance

Location: LEAVENWORTH, LEAVENWORTH County, KANSAS, 66048

State: Kansas Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $36.3 million to AC JV ONE LLC for work described as: THIS PROJECT IS TO PROCURE THE CONSTRUCTION FOR THE EHRM INFRASTRUCTURE UPGRADES CONSTRUCTION PROJECT AT THE DWIGHT D EISENHOWER VAMC IN LEAVENWORTH, KS Key points: 1. Contract awarded to AC JV ONE LLC for construction services. 2. Project aims to upgrade EHRM infrastructure at Dwight D. Eisenhower VAMC. 3. The contract is a Firm Fixed Price type, indicating defined costs. 4. Duration of the contract is 739 days, spanning over two years. 5. The North American Industry Classification System (NAICS) code is 236220. 6. The award was made under Full and Open Competition after Exclusion of Sources. 7. The contract value represents a significant investment in healthcare infrastructure.

Value Assessment

Rating: good

The contract value of $36.3 million for EHRM infrastructure upgrades appears reasonable for a project of this scope and duration. Benchmarking against similar large-scale construction projects for federal healthcare facilities suggests that costs can vary widely based on location, complexity, and specific requirements. Without detailed cost breakdowns or comparisons to identical projects, a precise value-for-money assessment is challenging. However, the firm fixed-price nature of the contract provides cost certainty for the government, mitigating risks associated with cost overruns.

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.' This indicates that the solicitation was made available to all responsible prospective contractors, but specific sources were excluded from consideration for reasons not detailed in the provided data. The number of bidders is not specified, but the 'full and open' nature suggests a competitive process was intended. The exclusion of sources, if not justified by unique capabilities or circumstances, could potentially limit competition and impact price discovery.

Taxpayer Impact: While the 'full and open' aspect is positive for competition, the exclusion of specific sources warrants scrutiny to ensure it did not unduly restrict the bidding pool and potentially lead to higher costs for taxpayers.

Public Impact

The primary beneficiaries are veterans receiving care at the Dwight D. Eisenhower VAMC, who will experience improved healthcare services due to upgraded infrastructure. The contract delivers essential construction services for the modernization of Electronic Health Record Management (EHRM) systems. The geographic impact is localized to Leavenworth, Kansas, where the VAMC is situated. The project will likely involve a workforce of construction professionals, tradespeople, and project managers, contributing to local employment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost increases if the 'exclusion of sources' was not fully justified and limited competitive bids.
Risk of project delays given the 739-day duration and the complexities inherent in infrastructure upgrades.
Ensuring the quality of construction meets the stringent standards required for healthcare facilities.

Positive Signals

Firm Fixed Price contract provides cost certainty and limits the government's exposure to cost overruns.
Award to a single contractor (AC JV ONE LLC) can streamline project management and communication.
The project addresses critical infrastructure needs for EHRM, which is vital for modern healthcare delivery.

Sector Analysis

The construction sector, particularly for institutional and commercial buildings, is a significant part of the federal contracting landscape. This contract falls under the Commercial and Institutional Building Construction category (NAICS 236220). Federal spending in this area often involves large-scale projects requiring specialized expertise and adherence to strict regulations. The market size for federal construction is substantial, with agencies like the Department of Veterans Affairs consistently investing in facility upgrades and new constructions to serve the veteran population.

Small Business Impact

The provided data indicates that small business participation (ss: false, sb: false) was not a primary set-aside consideration for this contract. This suggests that the contract was not specifically targeted towards small businesses, and there is no explicit information on subcontracting plans for small businesses. Consequently, the direct impact on the small business ecosystem may be limited unless the prime contractor voluntarily engages small businesses for subcontracting opportunities.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of Veterans Affairs, potentially through its Office of Construction & Facilities Management. Accountability measures would include adherence to the contract's terms, performance milestones, and quality standards. Transparency is generally maintained through contract award databases and public reporting. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected during the contract's lifecycle.

Related Government Programs

Veterans Affairs Medical Facility Construction
Electronic Health Record Modernization (EHRM) Program
Federal Infrastructure Projects
General Building Construction Contracts

Risk Flags

Potential for limited competition due to source exclusion.
Risk of cost overruns if scope is not fully defined or unforeseen issues arise.
Potential for project delays impacting VAMC operations.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $36.3 million to AC JV ONE LLC. THIS PROJECT IS TO PROCURE THE CONSTRUCTION FOR THE EHRM INFRASTRUCTURE UPGRADES CONSTRUCTION PROJECT AT THE DWIGHT D EISENHOWER VAMC IN LEAVENWORTH, KS

Who is the contractor on this award?

The obligated recipient is AC JV ONE 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 $36.3 million.

What is the period of performance?

Start: 2022-09-01. End: 2024-09-09.

What is the track record of AC JV ONE LLC in performing similar federal construction contracts?

Information regarding the specific track record of AC JV ONE LLC in performing similar federal construction contracts is not detailed in the provided data. A comprehensive assessment would require reviewing past performance evaluations, contract history, and any reported issues or successes on previous projects. Federal procurement systems often maintain past performance information that can be accessed by contracting officers to inform future award decisions. Without this specific data, it is difficult to definitively assess their capability and reliability for this EHRM infrastructure upgrade project.

How does the awarded amount of $36.3 million compare to similar EHRM infrastructure upgrade projects at other VAMCs?

Direct comparison of the $36.3 million award for EHRM infrastructure upgrades at the Dwight D. Eisenhower VAMC to similar projects at other VAMCs is challenging without specific project details. Factors such as the size and scope of the facility, the extent of the required upgrades, local construction market costs, and the specific technologies involved can significantly influence project costs. While this figure represents a substantial investment, its value-for-money can only be truly assessed by benchmarking against projects with comparable complexity, scale, and geographic location. The Department of Veterans Affairs likely has internal benchmarks for such projects.

What are the primary risks associated with a 739-day construction contract for critical healthcare infrastructure?

A 739-day (approximately two-year) construction contract for critical healthcare infrastructure like EHRM upgrades carries several inherent risks. These include potential for significant cost escalation due to market fluctuations in materials and labor over the extended period, especially if the contract is not fully fixed-price or has escalation clauses. Project delays are also a major concern, which can arise from unforeseen site conditions, weather, supply chain disruptions, or contractor performance issues. Furthermore, ensuring the continuity of existing VAMC operations during construction requires meticulous planning and coordination to minimize disruption to patient care. Finally, maintaining the security and integrity of sensitive health data during infrastructure work is paramount.

What is the significance of the NAICS code 236220 for this contract?

The North American Industry Classification System (NAICS) code 236220 signifies 'Commercial and Institutional Building Construction.' This classification indicates that the contract is for the construction of buildings intended for commercial or institutional purposes, as opposed to residential or heavy civil construction. For this EHRM infrastructure upgrade project at the VAMC, NAICS 236220 is appropriate as it covers the construction of a healthcare facility, which is an institutional building. This code helps in categorizing the contract for statistical purposes and identifying contractors with relevant experience in building construction.

What does 'Full and Open Competition after Exclusion of Sources' imply for the procurement process?

'Full and Open Competition after Exclusion of Sources' is a specific type of procurement method used by federal agencies. It means that the solicitation was initially intended for full and open competition, allowing all responsible sources to submit offers. However, certain sources were subsequently excluded from consideration. The reasons for exclusion must be justified and documented, often related to specific capabilities, security requirements, or other unique circumstances. While it aims for broad competition, the exclusion of sources can limit the number of potential bidders and may raise questions about whether the most competitive pricing was achieved if the exclusions were not strictly necessary.

What is the potential impact of a Firm Fixed Price (FFP) contract on cost control for this project?

A Firm Fixed Price (FFP) contract is generally considered the most advantageous type for cost control from the government's perspective. Under an FFP contract, the contractor agrees to a total price for a well-defined scope of work. The contractor bears the primary responsibility for any cost overruns, while the government benefits from price certainty. This structure incentivizes the contractor to manage costs efficiently and complete the project within the agreed-upon budget. For a project like the EHRM infrastructure upgrades, where the scope of construction is defined, an FFP contract helps mitigate the risk of unexpected cost increases for the Department of Veterans Affairs and, by extension, the taxpayers.

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: 36C77622R0061

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 837 OAKTON ST STE F UNIT 2, ELK GROVE VILLAGE, IL, 60007

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: $36,425,947

Exercised Options: $36,425,947

Current Obligation: $36,342,137

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline