VA awards $7.56M contract for EHRM infrastructure upgrades in Prescott, AZ to Panacea Construction Group LLC

Contract Overview

Contract Amount: $7,565,372 ($7.6M)

Contractor: Panacea Construction Group LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2024-10-11

End Date: 2026-09-08

Contract Duration: 697 days

Daily Burn Rate: $10.9K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 9

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: EHRM INFRASTRUCTURE UPGRADES - TIER 2 - PRESCOTT, AZ (VA-24-00011412)

Place of Performance

Location: PRESCOTT, YAVAPAI County, ARIZONA, 86313

State: Arizona Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $7.6 million to PANACEA CONSTRUCTION GROUP LLC for work described as: EHRM INFRASTRUCTURE UPGRADES - TIER 2 - PRESCOTT, AZ (VA-24-00011412) Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract is for infrastructure upgrades related to Electronic Health Record Modernization (EHRM). 3. The duration of the contract is approximately 697 days. 4. The award amount of $7.56 million is for a firm-fixed-price definitive contract. 5. The contractor, Panacea Construction Group LLC, is a new entity in federal contracting based on available data. 6. The project is located in Prescott, Arizona, serving the VA's healthcare infrastructure needs.

Value Assessment

Rating: fair

The contract value of $7.56 million for EHRM infrastructure upgrades appears to be within a reasonable range for a project of this nature, though specific benchmarks for EHRM infrastructure are not readily available. The firm-fixed-price structure shifts risk to the contractor, which can be beneficial for cost control if managed effectively. However, without more detailed cost breakdowns or comparisons to similar VA infrastructure projects, a definitive assessment of value for money is challenging. The number of bids received (9) suggests some level of market interest.

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,' which indicates that the solicitation was publicly advertised, and all responsible sources were permitted to submit offers. Nine bids were received, demonstrating a healthy level of competition for this requirement. The competitive process is expected to have driven pricing towards market rates and ensured a broad selection of potential contractors.

Taxpayer Impact: The use of full and open competition is generally favorable for taxpayers as it promotes competitive pricing and encourages a wider pool of contractors to participate, potentially leading to better value.

Public Impact

The primary beneficiaries are the Department of Veterans Affairs and the veterans who will be served by improved electronic health record systems. The services delivered include construction and infrastructure work essential for the functioning of the EHRM system. The geographic impact is specific to the VA facility in Prescott, Arizona. The contract supports the construction workforce in the Prescott, Arizona area.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Contractor's limited federal contracting history may present execution risks.
The firm-fixed-price contract requires careful oversight to ensure quality and scope adherence.
Dependence on specific infrastructure upgrades for EHRM could introduce project delays if not managed efficiently.

Positive Signals

Awarded through full and open competition, indicating a robust bidding process.
The firm-fixed-price contract provides cost certainty for the government.
The project directly supports the critical EHRM initiative for veteran healthcare.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, specifically supporting IT infrastructure for healthcare. The construction industry is a significant component of federal spending, with a substantial portion allocated to facility maintenance, upgrades, and new builds. Benchmarking this specific contract is difficult without more granular data on EHRM-related construction costs, but it aligns with broader trends in government investment in modernization and technology infrastructure.

Small Business Impact

The contract was awarded to Panacea Construction Group LLC and does not indicate any specific small business set-aside provisions. The data does not provide information on subcontracting plans or the extent to which small businesses might be involved in fulfilling this contract. Further analysis would be needed to determine the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of Veterans Affairs contracting and program officials. As a definitive contract, it is subject to standard federal procurement regulations and oversight mechanisms. Transparency is generally maintained through contract award databases like FPDS. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Electronic Health Record Modernization (EHRM)
VA Healthcare Infrastructure Projects
Federal Construction Contracts
IT Infrastructure Support

Risk Flags

Contractor's limited federal performance history.
Potential for scope creep or change orders in infrastructure projects.
Dependence on EHRM system integration.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $7.6 million to PANACEA CONSTRUCTION GROUP LLC. EHRM INFRASTRUCTURE UPGRADES - TIER 2 - PRESCOTT, AZ (VA-24-00011412)

Who is the contractor on this award?

The obligated recipient is PANACEA CONSTRUCTION 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 $7.6 million.

What is the period of performance?

Start: 2024-10-11. End: 2026-09-08.

What is the track record of Panacea Construction Group LLC in federal contracting?

Based on the provided data, Panacea Construction Group LLC appears to be a relatively new entrant into federal contracting. The award details do not suggest a long history of performance with the federal government. This limited track record could present potential risks related to project execution, adherence to federal regulations, and timely delivery. Future performance on this contract will be crucial in establishing their federal contracting history. It is advisable to monitor their performance closely and review any past performance information that becomes available through federal databases or agency reports.

How does the $7.56 million award compare to similar EHRM infrastructure upgrade contracts?

Direct comparisons for EHRM infrastructure upgrade contracts are challenging due to the specialized nature of the work and variations in project scope, location, and specific technological requirements. However, the $7.56 million figure for a definitive contract with a duration of approximately 697 days (about 1.9 years) suggests a significant investment. Larger-scale IT infrastructure projects can range from millions to tens of millions of dollars. The firm-fixed-price nature of this contract implies that the scope of work and associated costs were well-defined at the time of award. Without access to a broader database of comparable EHRM construction projects, it's difficult to definitively benchmark this award, but it appears to be a substantial commitment for a single facility upgrade.

What are the primary risks associated with this contract award?

The primary risks associated with this contract include the contractor's potentially limited federal contracting experience, which could lead to execution challenges, delays, or cost overruns if not managed effectively. The firm-fixed-price contract, while offering cost certainty, requires meticulous oversight to ensure the contractor meets quality standards and adheres to the defined scope. Furthermore, any delays in the infrastructure upgrades could impact the functionality and efficiency of the Electronic Health Record Modernization (EHRM) system, potentially affecting veteran care delivery. Dependence on specialized construction services also introduces risks related to material availability and skilled labor.

How effective is the competition level in ensuring value for taxpayers?

The contract was awarded under full and open competition after exclusion of sources, with nine bids received. This level of competition is generally considered robust and is expected to drive pricing towards market efficiency, thereby enhancing value for taxpayers. A larger number of bidders typically increases the likelihood that the government receives competitive offers, reducing the potential for inflated pricing. The competitive process allows the VA to select the best value proposal, which may consider factors beyond just price, such as technical approach and past performance, although the specific evaluation criteria are not detailed here. This competitive environment is a positive indicator for taxpayer value.

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

Historical spending patterns for EHRM infrastructure upgrades by the VA are complex and have evolved significantly with the broader EHRM initiative. The VA has been investing substantial resources into modernizing its health IT systems, including the EHRM program, which has seen multi-billion dollar investments over several years. This specific contract for infrastructure upgrades in Prescott, AZ, at $7.56 million, represents a localized component of this larger, ongoing modernization effort. Tracking historical spending requires analyzing numerous contracts across different fiscal years and geographic locations, focusing on construction, IT integration, and related services that support the EHRM system's physical and digital infrastructure.

What are the implications of the firm-fixed-price contract type for this project?

The firm-fixed-price (FFP) contract type means that the contractor, Panacea Construction Group LLC, is obligated to complete the work for a predetermined price, regardless of the actual costs incurred. This shifts the primary cost risk from the government to the contractor. For the VA, this offers budget certainty and predictability. However, it necessitates a well-defined scope of work and clear specifications at the outset to avoid disputes or change orders. The success of an FFP contract relies heavily on the contractor's ability to manage its costs effectively and the government's diligent oversight to ensure the contractor delivers the required quality and scope within the agreed-upon price.

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: 36C77624B0008

Offers Received: 9

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 30 PINION CT, DUBOIS, WY, 82513

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

Financial Breakdown

Contract Ceiling: $15,126,920

Exercised Options: $15,126,920

Current Obligation: $7,565,372

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline