VA awards $9.8M construction contract for EHRM infrastructure upgrades to Industrial Maintenance Services Inc

Contract Overview

Contract Amount: $9,842,261 ($9.8M)

Contractor: Industrial Maintenance Services Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2022-08-09

End Date: 2026-03-31

Contract Duration: 1,330 days

Daily Burn Rate: $7.4K/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: THE CONTRACTOR SHALL PROVIDE ALL TOOLS, EQUIPMENT, MATERIALS, LABOR, SUPERVISION, PERSONNEL, AND SHALL DO ALL THINGS NECESSARY THAT WILL RESULT IN THE COMPLETION OF THE EHRM INFRASTRUCTURE UPGRADES CONSTRUCTION PROJECT.

Place of Performance

Location: IRON MOUNTAIN, DICKINSON County, MICHIGAN, 49801

State: Michigan Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $9.8 million to INDUSTRIAL MAINTENANCE SERVICES INC 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 COMPLETION OF THE EHRM INFRASTRUCTURE UPGRADES CONSTRUCTION PROJECT. Key points: 1. Contract focuses on essential infrastructure upgrades for the Electronic Health Record Modernization (EHRM) program. 2. Project duration spans over 1300 days, indicating a significant, long-term construction effort. 3. The contract type is Firm Fixed Price, which shifts cost risk to the contractor. 4. Awarded under full and open competition, suggesting a competitive bidding process. 5. The North American Industry Classification System (NAICS) code 236220 points to commercial and institutional building construction. 6. The contract is a definitive contract, typically used for services or supplies over an extended period.

Value Assessment

Rating: good

The contract value of $9.84 million for EHRM infrastructure upgrades appears reasonable for a multi-year construction project of this scope. Benchmarking against similar large-scale federal construction projects would provide a more precise value-for-money assessment. The firm fixed-price structure is a positive indicator for cost control, as it caps the government's liability. However, without detailed cost breakdowns or comparisons to private sector construction costs for similar upgrades, a definitive assessment of pricing efficiency is challenging.

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 that proposals were solicited from all responsible sources, with specific exclusions noted. The presence of two bids suggests a moderate level of competition for this project. While two bidders are better than one, a higher number of bids typically leads to more robust price discovery and potentially lower costs for the government. The specific reasons for excluding other sources, if any, are not detailed here.

Taxpayer Impact: The full and open competition, despite having only two bidders, aims to ensure that taxpayer funds are used efficiently by encouraging competitive pricing. This process helps prevent inflated costs that might arise from sole-source or limited competition scenarios.

Public Impact

The primary beneficiaries are the Department of Veterans Affairs (VA) and the veterans who will utilize the modernized EHR system. The services delivered include construction and infrastructure upgrades essential for the reliable operation of the EHRM system. The geographic impact is focused on the specific VA facility where the construction is taking place in Michigan. The project will likely involve a workforce of construction laborers, project managers, and skilled tradespeople.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for construction delays impacting EHRM system rollout timelines.
Scope creep could lead to cost overruns despite the fixed-price contract.
Ensuring quality of construction to meet long-term infrastructure needs.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Awarded under full and open competition, promoting fair market pricing.
Project addresses critical infrastructure for a vital national program (EHRM).

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector (NAICS 236220). This sector encompasses a wide range of construction activities for non-residential buildings. Federal spending in this area is substantial, supporting infrastructure development across various agencies. Comparable spending benchmarks would involve analyzing other large-scale construction projects awarded by the VA or other federal entities for facility upgrades or new construction, particularly those related to healthcare infrastructure.

Small Business Impact

The data indicates that small business participation was not a primary set-aside criterion for this contract (ss: false, sb: false). There is no explicit mention of subcontracting goals for small businesses within the provided data. Therefore, the direct impact on the small business ecosystem appears limited unless Industrial Maintenance Services Inc. voluntarily engages small businesses as subcontractors. Further analysis of the subcontracting plan would be needed to assess broader small business implications.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the contracting officer's representative (COR) within the Department of Veterans Affairs. Accountability measures are embedded in the firm fixed-price contract terms, requiring completion of the specified construction work. Transparency is facilitated through federal contract databases where award details are published. The Inspector General's office for the VA may conduct audits or investigations if concerns regarding performance or financial integrity arise.

Related Government Programs

Electronic Health Record Modernization (EHRM) Program
VA Facility Construction and Maintenance
Federal Infrastructure Projects
Commercial Building Construction Contracts

Risk Flags

Potential for schedule delays impacting EHRM rollout.
Risk of scope creep leading to cost increases.
Ensuring long-term durability and quality of construction.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $9.8 million to INDUSTRIAL MAINTENANCE SERVICES INC. THE CONTRACTOR SHALL PROVIDE ALL TOOLS, EQUIPMENT, MATERIALS, LABOR, SUPERVISION, PERSONNEL, AND SHALL DO ALL THINGS NECESSARY THAT WILL RESULT IN THE COMPLETION OF THE EHRM INFRASTRUCTURE UPGRADES CONSTRUCTION PROJECT.

Who is the contractor on this award?

The obligated recipient is INDUSTRIAL MAINTENANCE SERVICES INC.

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 $9.8 million.

What is the period of performance?

Start: 2022-08-09. End: 2026-03-31.

What is the track record of Industrial Maintenance Services Inc. in performing similar federal construction contracts?

A review of federal contract databases reveals that Industrial Maintenance Services Inc. has been awarded multiple contracts, primarily with the Department of Defense and the Department of Veterans Affairs. These contracts often involve maintenance, repair, and construction services for facilities. While specific details on the scale and complexity of past EHRM-related infrastructure projects are not immediately available, their history suggests experience with government contracting and building maintenance. A deeper dive into past performance evaluations and contract completion records would be necessary to fully assess their capability for this specific EHRM infrastructure upgrade project.

How does the awarded price compare to industry benchmarks for similar infrastructure upgrade projects?

Benchmarking the $9.84 million contract value requires comparing it to similar-sized commercial and institutional building construction projects, specifically those involving healthcare infrastructure upgrades. Factors such as geographic location (Michigan), project complexity, duration (1330 days), and specific upgrade requirements (EHRM infrastructure) significantly influence costs. Without access to detailed cost breakdowns or a database of comparable federal and private sector projects with similar specifications, a precise benchmark is difficult. However, the firm fixed-price nature suggests the government sought to contain costs within a defined budget, implying some level of internal cost estimation or market research was conducted prior to award.

What are the primary risks associated with this contract, and how are they being mitigated?

Key risks include potential construction delays impacting the EHRM system's operational readiness, unforeseen site conditions requiring additional work, and contractor performance issues. The firm fixed-price contract mitigates financial risk for the government by capping costs. Mitigation for performance and schedule risks relies on robust project management, clear contract terms, and regular oversight by the VA's COR. The contractor's own risk management strategies, including scheduling, resource allocation, and quality control, are crucial for successful project completion. The moderate competition level (two bidders) might suggest a risk that the chosen contractor could face challenges if they encounter significant unforeseen issues.

How effective is the firm fixed-price contract type in ensuring value for money for this construction project?

The firm fixed-price (FFP) contract type is generally considered effective for construction projects where the scope of work is well-defined, as it shifts the risk of cost overruns to the contractor. This encourages the contractor to manage costs efficiently and complete the project within the agreed-upon price. For the VA's EHRM infrastructure upgrades, an FFP contract provides budget certainty and incentivizes timely completion. However, its effectiveness hinges on the accuracy of the initial cost estimates and the clarity of the contract's scope. If unforeseen issues arise that significantly alter the scope, change orders could increase the total cost, potentially diminishing the value-for-money advantage.

What is the historical spending trend for EHRM infrastructure upgrades or similar construction projects at the VA?

Analyzing historical spending trends for EHRM infrastructure upgrades at the VA requires examining past contract awards related to the EHRM program and general facility construction/modernization. The VA has consistently invested significant funds in upgrading its IT infrastructure and physical facilities to support healthcare delivery and modernization efforts like EHRM. Spending in this area can fluctuate based on program priorities, budget allocations, and the lifecycle of infrastructure projects. A trend analysis would likely show a sustained or increasing investment in such upgrades, particularly as the EHRM program progresses and requires ongoing support and facility enhancements across numerous VA medical centers.

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: 36C77622B0018

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1920 20TH AVE N, ESCANABA, MI, 49829

Business Categories: American Indian Owned Business, Category Business, Corporate Entity Not Tax Exempt, Minority Owned Business, Native American Owned Business, Service Disabled Veteran Owned Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $9,842,261

Exercised Options: $9,842,261

Current Obligation: $9,842,261

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline