VA awards $3.86M for EHRM Infrastructure Data Center Construction in Grand Junction, CO

Contract Overview

Contract Amount: $3,862,678 ($3.9M)

Contractor: Hawk Contracting Group LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2023-09-29

End Date: 2026-04-27

Contract Duration: 941 days

Daily Burn Rate: $4.1K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: EHRM INFRASTRUCTURE DATA CENTER CONSTRUCTION-GRAND JUNCTION

Place of Performance

Location: GRAND JUNCTION, MESA County, COLORADO, 81501

State: Colorado Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $3.9 million to HAWK CONTRACTING GROUP LLC for work described as: EHRM INFRASTRUCTURE DATA CENTER CONSTRUCTION-GRAND JUNCTION Key points: 1. Contract awarded to HAWK CONTRACTING GROUP LLC for construction services. 2. Project aims to support Electronic Health Record Modernization (EHRM) infrastructure. 3. Definitive contract type with a firm fixed price. 4. Duration of 941 days, ending April 2026. 5. Located in Grand Junction, Colorado, impacting local workforce and economy. 6. This award represents a significant investment in critical healthcare IT infrastructure.

Value Assessment

Rating: good

The contract value of $3.86 million for a data center construction project appears reasonable given the scope and duration. Benchmarking against similar VA or DoD data center construction projects would provide a more precise value-for-money assessment. The firm fixed-price nature of the contract shifts risk to the contractor, which can be beneficial for cost control if managed effectively. However, without detailed cost breakdowns or comparisons to industry standards for construction of this type, a definitive assessment of exceptional value is difficult.

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 a broad solicitation may have occurred, specific sources were excluded, potentially limiting the competitive pool. The number of bidders is not specified, but the 'limited' competition level suggests that price discovery might not have been as robust as with full and open competition. This approach can sometimes lead to higher prices compared to a scenario with a wider range of qualified bidders.

Taxpayer Impact: A limited competition may mean taxpayers did not benefit from the lowest possible price achievable through maximum market participation. This could result in a less efficient use of federal funds compared to a fully open bid process.

Public Impact

Benefits the Department of Veterans Affairs by providing essential infrastructure for EHRM. Services delivered include the construction of a data center facility. Geographic impact is focused on Grand Junction, Colorado, potentially creating local jobs. Workforce implications include construction jobs in the Grand Junction area. Enhances the operational capacity and reliability of the VA's electronic health record system.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may have restricted the number of potential bidders, potentially impacting price.
Firm fixed-price contracts can lead to cost overruns if unforeseen issues arise during construction.
The exclusion of sources in the competition phase warrants further investigation into the justification.

Positive Signals

Award to a single contractor (HAWK CONTRACTING GROUP LLC) can streamline project management.
Firm fixed-price contract provides cost certainty for the government.
Project supports critical healthcare IT infrastructure modernization for veterans.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a vital part of the broader construction industry. The market for data center construction is specialized and growing, driven by increasing demand for digital infrastructure. The VA's investment in this project aligns with broader federal initiatives to modernize IT systems and improve healthcare delivery. Comparable spending benchmarks would involve analyzing costs for similar-sized data center construction projects within government or the private sector, considering factors like square footage, technological requirements, and geographic location.

Small Business Impact

The contract was not set aside for small businesses (ss: false, sb: false). This means that large businesses were eligible to compete and potentially win. There is no explicit mention of subcontracting requirements for small businesses within the provided data. The impact on the small business ecosystem is likely minimal unless HAWK CONTRACTING GROUP LLC voluntarily engages small businesses for specialized construction services or materials.

Oversight & Accountability

Oversight for this contract will primarily reside with the Department of Veterans Affairs contracting officers and project managers. Accountability measures are embedded in the firm fixed-price contract terms, requiring the contractor to deliver the specified construction within the agreed-upon price and timeline. Transparency is facilitated through federal contract databases where this award is recorded. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected during the performance of the contract.

Related Government Programs

Electronic Health Record Modernization (EHRM)
VA IT Infrastructure Projects
Federal Data Center Construction
Department of Veterans Affairs Construction Contracts

Risk Flags

Limited competition may impact price competitiveness.
Potential for cost overruns in firm fixed-price contracts.
Need for robust government oversight during extended construction period.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $3.9 million to HAWK CONTRACTING GROUP LLC. EHRM INFRASTRUCTURE DATA CENTER CONSTRUCTION-GRAND JUNCTION

Who is the contractor on this award?

The obligated recipient is HAWK CONTRACTING 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 $3.9 million.

What is the period of performance?

Start: 2023-09-29. End: 2026-04-27.

What is the track record of HAWK CONTRACTING GROUP LLC with the Department of Veterans Affairs?

A review of federal procurement data indicates that HAWK CONTRACTING GROUP LLC has received multiple awards from the Department of Veterans Affairs, primarily in construction and facilities maintenance. While specific performance details for past contracts are not publicly available in this dataset, the recurring awards suggest a satisfactory performance history or a specialized capability that the VA values. Further investigation into past performance reviews and contract close-out data would be necessary to provide a comprehensive assessment of their track record with the VA.

How does the awarded price compare to similar VA data center construction projects?

Direct comparison of the $3.86 million award for this specific EHRM infrastructure data center construction in Grand Junction is challenging without access to a detailed database of comparable VA projects. Factors such as square footage, specific technological requirements (e.g., cooling, power redundancy), and geographic location significantly influence construction costs. However, for a project of this nature and duration (941 days), the awarded amount appears within a plausible range for federal construction contracts. A more robust analysis would involve benchmarking against projects of similar scale and complexity undertaken by the VA or other federal agencies in recent years.

What are the primary risks associated with this firm fixed-price construction contract?

The primary risks associated with this firm fixed-price contract include potential cost overruns if unforeseen site conditions or material price escalations occur, which the contractor would have to absorb. There's also a risk of schedule delays if the contractor faces labor shortages, supply chain disruptions, or permitting issues. For the government, the risk lies in the contractor potentially cutting corners on quality to maintain profitability, necessitating strong oversight. The 'limited' competition aspect also introduces a risk that the government may not have secured the most competitive pricing available in the market.

How effective is the 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' approach for this type of project?

The effectiveness of 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' is context-dependent. For a specialized project like EHRM infrastructure data center construction, excluding certain sources might be justified if only a few contractors possess the specific technical expertise, security clearances, or past performance required. However, if the exclusions were not strictly necessary, this approach limits the competitive pool, potentially leading to higher prices and reduced innovation compared to a truly open competition. The VA would need to provide a clear justification for the source exclusions to demonstrate the necessity and effectiveness of this procurement strategy.

What is the historical spending pattern for EHRM infrastructure construction by the VA?

Historical spending data for EHRM infrastructure construction by the VA is not detailed in the provided information. However, the VA has been undergoing significant IT modernization efforts, including the implementation of the Oracle Cerner EHRM system, which requires substantial investment in supporting infrastructure. This includes data centers, network upgrades, and related facilities. Spending in this area is likely to be substantial and ongoing as the EHRM rollout progresses across different VA facilities. Analyzing broader VA IT modernization budgets would provide context for this specific construction award.

What are the implications of the 941-day contract duration for project delivery?

A 941-day duration (approximately 2.5 years) for data center construction is substantial and suggests a complex project involving significant planning, site preparation, building, and integration of specialized systems. This extended timeline allows for thorough execution but also increases the risk of market changes, technological obsolescence, and potential cost fluctuations. For the VA, it means a long-term commitment and the need for sustained project oversight. The contractor must manage resources effectively over this period to ensure timely and budget-compliant completion.

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: 36C77623B0027

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2400 E MAIN ST, MONTROSE, CO, 81401

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Self-Certified Small Disadvantaged Business, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $3,862,678

Exercised Options: $3,862,678

Current Obligation: $3,862,678

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline