VA awards $16.3M contract for EHRM infrastructure upgrades at Grand Island VAMC

Contract Overview

Contract Amount: $16,266,732 ($16.3M)

Contractor: THE Povolny Group Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2023-03-08

End Date: 2025-11-03

Contract Duration: 971 days

Daily Burn Rate: $16.8K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: THE GENERAL CONTRACTOR IS TO PROVIDE ALL CONSTRUCTION AND RELATED SERVICES TO COMPLETE THE EHRM INFRASTRUCTURE UPGRADES PROJECT AT THE GRAND ISLAND VAMC.

Place of Performance

Location: GRAND ISLAND, HALL County, NEBRASKA, 68803

State: Nebraska Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $16.3 million to THE POVOLNY GROUP INC for work described as: THE GENERAL CONTRACTOR IS TO PROVIDE ALL CONSTRUCTION AND RELATED SERVICES TO COMPLETE THE EHRM INFRASTRUCTURE UPGRADES PROJECT AT THE GRAND ISLAND VAMC. Key points: 1. Contract focuses on essential infrastructure upgrades for the Electronic Health Record Modernization (EHRM) project. 2. The project aims to enhance the technological foundation supporting critical healthcare services. 3. Fixed-price contract structure provides cost certainty for the government. 4. The contractor has a history of performing construction services. 5. Project duration spans over two years, indicating a significant scope of work. 6. Geographic focus is on Nebraska, impacting local workforce and resources.

Value Assessment

Rating: good

The contract value of $16.3 million for commercial and institutional building construction is within a typical range for VAMC infrastructure projects of this nature. Benchmarking against similar EHRM-related construction contracts would provide a more precise value-for-money assessment. The firm-fixed-price structure is generally favorable for controlling costs, assuming the scope is well-defined. The absence of specific performance metrics in the provided data makes a detailed assessment of efficiency challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition After Exclusion of Sources,' which suggests a competitive process but with specific criteria for participation. The number of bidders (4) indicates some level of competition, but the 'exclusion of sources' aspect warrants further investigation to understand if it limited the pool of potential offerors. This type of competition can sometimes lead to less aggressive pricing compared to unrestricted full and open competition.

Taxpayer Impact: While competition was present, the exclusion of certain sources may have limited the potential for the lowest possible price. Taxpayers benefit from a structured competition that aims for best value, but the specific limitations could have influenced the final cost.

Public Impact

Veterans receiving care at the Grand Island VAMC will benefit from improved healthcare IT infrastructure. The project delivers essential construction and related services to modernize facilities. The geographic impact is concentrated in Nebraska, potentially creating local jobs and utilizing local suppliers. The workforce implications include construction labor and potentially IT support roles during the upgrade phase.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if the scope of 'related services' is not tightly managed.
Dependence on the contractor's ability to coordinate with ongoing VAMC operations.
Risk of delays if unforeseen site conditions are encountered during construction.

Positive Signals

Firm-fixed-price contract provides budget predictability.
Defined project duration helps in planning and resource allocation.
The project directly supports the critical EHRM initiative, aligning with VA modernization goals.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a significant segment of the broader construction industry. The specific application within a healthcare facility, supporting the Electronic Health Record Modernization (EHRM) project, highlights a growing trend of technology integration in physical infrastructure. Comparable spending benchmarks for VAMC construction projects of similar scale and complexity would be relevant for assessing value. The market for healthcare construction is competitive, with specialized firms often bidding on such projects.

Small Business Impact

The data indicates that small business participation (ss: false, sb: false) was not a primary focus for this specific contract award. There is no explicit mention of small business set-asides or subcontracting goals. This suggests that the prime contractor is likely a larger entity, and the impact on the small business ecosystem would depend on whether the prime contractor engages small businesses for subcontracting opportunities, which is not detailed here.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Veterans Affairs (VA) contracting officers and project managers. Accountability measures are inherent in the firm-fixed-price contract structure, which penalizes deviations from agreed-upon costs. Transparency is facilitated by the Federal Procurement Data System (FPDS), where contract awards are recorded. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Electronic Health Record Modernization (EHRM)
Veterans Affairs Medical Facility Construction
Healthcare IT Infrastructure Projects
Commercial Building Construction Contracts

Risk Flags

Potential for scope creep in 'related services'.
Risk of unforeseen site conditions impacting schedule and cost.
Dependence on contractor's performance and financial stability.
Limited transparency on specific exclusion criteria for competition.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $16.3 million to THE POVOLNY GROUP INC. THE GENERAL CONTRACTOR IS TO PROVIDE ALL CONSTRUCTION AND RELATED SERVICES TO COMPLETE THE EHRM INFRASTRUCTURE UPGRADES PROJECT AT THE GRAND ISLAND VAMC.

Who is the contractor on this award?

The obligated recipient is THE POVOLNY GROUP 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 $16.3 million.

What is the period of performance?

Start: 2023-03-08. End: 2025-11-03.

What is the track record of The Povolny Group Inc. with the Department of Veterans Affairs?

A review of federal procurement data indicates that The Povolny Group Inc. has received multiple contracts from various federal agencies, including the Department of Veterans Affairs. While this specific contract is for a significant amount, further analysis would be needed to determine the full scope and value of their past work with the VA. Examining past performance reviews, any documented issues, and the types of services previously rendered would provide a clearer picture of their reliability and expertise in fulfilling VA requirements. Understanding their history with similar construction projects, especially within healthcare settings, is crucial for assessing their suitability for the EHRM infrastructure upgrades.

How does the $16.3 million contract value compare to similar EHRM infrastructure upgrade projects at other VAMCs?

Benchmarking the $16.3 million contract value against similar EHRM infrastructure upgrade projects at other Veterans Affairs Medical Centers (VAMCs) is essential for assessing value for money. Without specific data on comparable projects, it's difficult to definitively state if this amount is high or low. However, factors such as the size of the VAMC, the complexity of the existing infrastructure, the specific scope of work required for EHRM integration, and regional construction cost variations can significantly influence project costs. A detailed comparison would involve identifying projects with similar square footage, technological requirements, and contract durations to establish a relevant cost per square foot or per upgrade component.

What are the primary risks associated with this firm-fixed-price contract for infrastructure upgrades?

The primary risks associated with this firm-fixed-price contract revolve around scope definition and unforeseen conditions. While the fixed-price nature provides cost certainty, if the 'related services' are not meticulously defined, the contractor may face challenges in execution or seek change orders, potentially increasing costs. Unforeseen site conditions (e.g., structural issues, hazardous materials, outdated existing systems not initially identified) discovered during construction can lead to delays and necessitate contract modifications, impacting the overall budget and timeline. Additionally, the contractor's financial stability and capacity to manage a project of this scale over nearly two years are inherent risks that need continuous monitoring.

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

The 'Full and Open Competition After Exclusion of Sources' method aims to balance broad competition with specific requirements. It ensures that all responsible sources are permitted to compete, but it allows for the exclusion of sources that do not meet specific, justified criteria. This can be effective in ensuring that bidders have the specialized capabilities needed for complex projects like VAMC infrastructure upgrades. However, if the exclusion criteria are overly restrictive or not well-justified, it could inadvertently limit the number of potential bidders, potentially reducing the competitive pressure on pricing compared to unrestricted full and open competition. The effectiveness hinges on the appropriateness of the exclusion criteria.

What is the historical spending trend for EHRM-related infrastructure projects at the VA?

Historical spending trends for EHRM-related infrastructure projects at the VA indicate a significant and sustained investment as the department modernizes its IT systems and facilities. The EHRM initiative itself represents a multi-billion dollar undertaking, and the associated infrastructure upgrades are a critical component. Spending in this area has likely increased over the past several years and is expected to continue as VAMCs nationwide require physical and technological enhancements to support the new system. Analyzing aggregate VA spending on construction and IT infrastructure projects over the last 5-10 years, specifically those tagged with EHRM or similar modernization keywords, would reveal the scale and growth of this investment.

What are the potential long-term benefits of these EHRM infrastructure upgrades for patient care?

The long-term benefits of these EHRM infrastructure upgrades for patient care are substantial. A robust and modern IT infrastructure is the backbone of the Electronic Health Record Modernization (EHRM) system, enabling seamless access to patient data, improved care coordination among providers, and enhanced telehealth capabilities. This translates to more efficient diagnoses, reduced medical errors, and better-informed treatment decisions. For patients, it means a more integrated and potentially safer healthcare experience, with their medical history readily available to clinicians regardless of location within the VAMC system. Ultimately, these upgrades support the VA's mission to provide high-quality, comprehensive care to veterans.

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: 36C77623B0002

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1906 LIVINGSTON AVE, SAINT PAUL, MN, 55118

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $16,266,732

Exercised Options: $16,266,732

Current Obligation: $16,266,732

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline