VA awards $24.9M for West Haven VAMC sterile processing renovation, highlighting construction sector activity

Contract Overview

Contract Amount: $24,901,146 ($24.9M)

Contractor: Richard Group LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2024-10-03

End Date: 2026-12-30

Contract Duration: 818 days

Daily Burn Rate: $30.4K/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: RELOCATION AND RENOVATION OF STERILE PROCESSING SERVICES MINOR CONSTRUCTION PROJECT AT THE WEST HAVEN VAMC IN WEST HAVEN, CT

Place of Performance

Location: WEST HAVEN, NEW HAVEN County, CONNECTICUT, 06516

State: Connecticut Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $24.9 million to RICHARD GROUP LLC for work described as: RELOCATION AND RENOVATION OF STERILE PROCESSING SERVICES MINOR CONSTRUCTION PROJECT AT THE WEST HAVEN VAMC IN WEST HAVEN, CT Key points: 1. Project focuses on critical healthcare infrastructure, ensuring sterile processing capabilities. 2. Contract awarded through full and open competition, suggesting a competitive bidding process. 3. The definitive contract type indicates a clear scope and pricing structure. 4. Duration of 818 days suggests a significant construction undertaking. 5. Geographic focus on Connecticut aligns with regional healthcare facility needs. 6. The project's value places it within a moderate spending range for facility upgrades.

Value Assessment

Rating: good

The contract value of $24.9 million for the relocation and renovation of sterile processing services at the West Haven VAMC appears reasonable for a minor construction project of this scope. Benchmarking against similar healthcare facility renovation projects would provide a more precise value-for-money assessment. The firm-fixed-price structure helps control costs for the government, assuming the scope is well-defined. The award to RICHARD GROUP LLC warrants a review of their past performance on similar federal contracts.

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 while the competition was intended to be broad, specific sources may have been excluded for defined reasons. With 3 bidders, the competition level suggests a moderate level of interest, which can contribute to price discovery. However, the exclusion of sources warrants further investigation to ensure it did not unduly limit competition and potentially impact pricing.

Taxpayer Impact: A competitive process, even with exclusions, generally benefits taxpayers by encouraging multiple firms to offer their best pricing. The presence of multiple bidders suggests that the government received a range of proposals, allowing for selection of the most cost-effective option.

Public Impact

Patients at the West Haven VAMC will benefit from improved sterile processing capabilities, enhancing the safety and efficiency of medical procedures. Healthcare staff will have access to updated and potentially more functional sterile processing facilities, improving their working environment. The project's geographic impact is concentrated in West Haven, Connecticut, supporting local economic activity through construction. The construction workforce in the region will see employment opportunities during the project's duration.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep in renovation projects, which could lead to cost overruns if not managed tightly.
Dependence on the contractor's ability to meet the demanding 818-day schedule without significant delays.
Ensuring compliance with all federal regulations and building codes during the renovation process.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Awarded through a competitive process, indicating potential for good value.
Project addresses a critical need for sterile processing infrastructure within a VA facility.

Sector Analysis

The healthcare construction sector is a significant part of the broader construction industry, characterized by specialized requirements for facilities like hospitals and clinics. Projects often involve stringent regulatory compliance, infection control measures, and the integration of complex medical equipment. The $24.9 million award for this minor construction project at the West Haven VAMC falls within the typical range for facility upgrades and renovations in healthcare settings. Comparable spending benchmarks would involve looking at other VA facility renovation contracts or similar projects at other healthcare institutions.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). While there is no direct indication of small business subcontracting requirements in the provided data, large construction projects often include provisions for small business participation. The impact on the small business ecosystem would depend on whether RICHARD GROUP LLC actively seeks out and utilizes small business subcontractors for specialized services or materials.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of Veterans Affairs contracting officers and project managers. Accountability measures are inherent in the firm-fixed-price contract type, which obligates the contractor to deliver the specified work within the agreed-upon price. Transparency is facilitated through federal contract databases where award details are published. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

VA Healthcare Facility Construction
Medical Equipment Renovation
Commercial and Institutional Building Construction
Federal Construction Contracts
Healthcare Infrastructure Projects

Risk Flags

Potential for cost overruns due to extended project duration.
Risk of delays impacting facility operational readiness.
Adequacy of justification for excluding certain sources in competition.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $24.9 million to RICHARD GROUP LLC. RELOCATION AND RENOVATION OF STERILE PROCESSING SERVICES MINOR CONSTRUCTION PROJECT AT THE WEST HAVEN VAMC IN WEST HAVEN, CT

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 $24.9 million.

What is the period of performance?

Start: 2024-10-03. End: 2026-12-30.

What is the track record of RICHARD GROUP LLC on similar federal construction contracts, particularly within the Department of Veterans Affairs?

A review of federal procurement data would be necessary to fully assess RICHARD GROUP LLC's track record. Key metrics to examine include the number of previous federal contracts awarded, their total value, performance ratings (if available), and any history of contract disputes or terminations. Specifically, their experience with VA projects, especially those involving healthcare facilities or renovations of sensitive areas like sterile processing, would be highly relevant. Understanding their past performance in terms of schedule adherence, budget management, and quality of work on similar projects would provide crucial context for evaluating the current contract's risk and potential success.

How does the awarded price of $24.9 million compare to the market rates for similar minor construction projects in the West Haven, CT area?

To benchmark the $24.9 million award, one would need to gather data on recent, comparable minor construction projects in the West Haven, Connecticut region. This would involve identifying projects with similar scope (e.g., renovation of specialized functional spaces), size (square footage), and complexity (e.g., integration of specific systems). Market research reports, construction cost indices, and data from private sector construction firms could provide insights into typical per-square-foot costs or unit costs for specific construction elements. A significant deviation from established market rates, either higher or lower, would warrant further investigation into the specific project requirements, prevailing economic conditions, and the competitive landscape at the time of bidding.

What are the primary risks associated with the 818-day duration of this construction project, and what mitigation strategies are in place?

The extended duration of 818 days for this minor construction project presents several potential risks. These include the possibility of escalating material and labor costs over time, increased potential for unforeseen site conditions or design changes, and the risk of project delays due to weather, supply chain disruptions, or contractor performance issues. Mitigation strategies typically involve robust project management, contingency planning for cost and schedule overruns, clear change order processes, and regular progress monitoring. The firm-fixed-price nature of the contract places the cost risk largely on the contractor, but the government must ensure adequate oversight to prevent scope creep and ensure timely completion.

How effective is the 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' approach in ensuring optimal value for taxpayers in this specific contract?

The effectiveness of 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' in ensuring optimal value for taxpayers hinges on the justification for excluding certain sources and the rigor of the remaining competition. If the exclusions were based on legitimate technical requirements or past performance issues, and if the remaining competition involved a sufficient number of qualified bidders (in this case, 3), then it can still lead to competitive pricing and good value. However, if the exclusions were arbitrary or overly restrictive, it could limit the pool of potential bidders, potentially leading to higher prices than a truly open competition might yield. A thorough review of the exclusion rationale and the bid analysis is necessary to confirm value for taxpayers.

What are the historical spending patterns for similar minor construction projects at the West Haven VAMC or other VA facilities in Connecticut?

Analyzing historical spending patterns for similar minor construction projects at the West Haven VAMC and other VA facilities in Connecticut would provide valuable context for the $24.9 million award. This involves examining past contracts for renovations, upgrades, or minor construction within VA medical centers in the region. Key data points to look for include contract values, project durations, types of work performed, and the number of bidders. Understanding these historical trends can help identify whether the current award is consistent with previous spending, if costs have escalated, or if this project represents a significant investment compared to prior similar undertakings. Such analysis aids in assessing the reasonableness of the current contract's price and scope.

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: 36C77624R0041

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 566 W LAKE STREET, CHICAGO, IL, 60661

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: $24,901,146

Exercised Options: $24,901,146

Current Obligation: $24,901,146

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline