VA awards $18.8M contract for Des Moines lab expansion, with 5 bids received

Contract Overview

Contract Amount: $18,848,838 ($18.8M)

Contractor: Covenant Construction Services LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2025-09-23

End Date: 2028-03-23

Contract Duration: 912 days

Daily Burn Rate: $20.7K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: PROJECT #636-130 - DES MOINES - VACIHCS - EXPAND AND REMODEL LABORATORY - DES MOINES, IA

Place of Performance

Location: DES MOINES, POLK County, IOWA, 50310

State: Iowa Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $18.8 million to COVENANT CONSTRUCTION SERVICES LLC for work described as: PROJECT #636-130 - DES MOINES - VACIHCS - EXPAND AND REMODEL LABORATORY - DES MOINES, IA Key points: 1. Contract value appears reasonable for a large-scale construction project of this nature. 2. Full and open competition was utilized, suggesting a competitive bidding process. 3. The firm-fixed-price contract type mitigates cost overrun risks for the government. 4. Project duration of approximately 3 years is standard for major facility upgrades. 5. The contractor, Covenant Construction Services LLC, has a track record in commercial construction. 6. This project addresses critical infrastructure needs for the Des Moines VA healthcare system.

Value Assessment

Rating: good

The contract value of $18.8 million for expanding and remodeling a laboratory at the Des Moines VACIHCS falls within a typical range for significant healthcare facility construction projects. Benchmarking against similar-sized laboratory renovations or expansions within the federal or commercial sectors would provide a more precise value-for-money assessment. However, given the scope implied by 'expand and remodel,' the price appears to be a fair reflection of the work involved. The firm-fixed-price structure further supports the assessment of good value by locking in costs.

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 the solicitation was broadly advertised, and all responsible sources were permitted to submit offers. With five bids received, the competition level suggests a healthy interest in the project and provides the agency with a range of pricing and technical proposals to evaluate. This level of competition is generally expected to drive competitive pricing and encourage contractors to offer their best value.

Taxpayer Impact: The use of full and open competition with multiple bidders is beneficial for taxpayers as it increases the likelihood of securing the project at a competitive market price, preventing potential overpayment.

Public Impact

Veterans in the Des Moines area will benefit from improved laboratory services and facilities. The project will deliver expanded and remodeled laboratory space, potentially enhancing diagnostic and treatment capabilities. The geographic impact is concentrated in Des Moines, Iowa, serving the local VA healthcare network. Construction activities will likely create temporary employment opportunities in the Des Moines region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for construction delays impacting service availability.
Ensuring compliance with all VA facility standards and healthcare regulations.
Managing the logistics of construction within an active healthcare environment.

Positive Signals

Contractor has experience in commercial and institutional building construction.
Firm-fixed-price contract limits financial risk for the government.
Project aims to improve critical healthcare infrastructure.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a significant segment of the broader construction industry. Federal spending in this area often supports critical infrastructure for government agencies, including healthcare facilities. The market size for federal construction is substantial, with agencies like the Department of Veterans Affairs consistently investing in facility upgrades and expansions to meet the needs of veterans. This project aligns with the VA's ongoing efforts to modernize its healthcare infrastructure.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). While there is no direct indication of subcontracting requirements for small businesses in the provided data, large construction projects often include provisions for small business participation. The absence of a small business set-aside means that large businesses were eligible to compete and potentially win the prime contract. Further review of the contract's terms and conditions would be necessary to determine specific subcontracting goals or opportunities for small businesses.

Oversight & Accountability

Oversight for this contract will primarily be managed by the Department of Veterans Affairs contracting officers and project managers. The firm-fixed-price nature of the contract provides a degree of cost control. Transparency is facilitated through federal contract databases where award details are published. The Inspector General's office within the VA may conduct audits or investigations if any performance or financial irregularities are suspected. Regular progress reports and site inspections are standard oversight mechanisms for construction projects of this scale.

Related Government Programs

VA Healthcare Construction Projects
Federal Laboratory Modernization
Commercial Building Construction Contracts
Infrastructure Improvement Projects

Risk Flags

Potential for scope creep leading to change orders.
Risk of construction delays impacting facility readiness.
Ensuring contractor compliance with healthcare facility construction standards.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $18.8 million to COVENANT CONSTRUCTION SERVICES LLC. PROJECT #636-130 - DES MOINES - VACIHCS - EXPAND AND REMODEL LABORATORY - DES MOINES, IA

Who is the contractor on this award?

The obligated recipient is COVENANT CONSTRUCTION SERVICES 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 $18.8 million.

What is the period of performance?

Start: 2025-09-23. End: 2028-03-23.

What is the track record of Covenant Construction Services LLC on similar federal projects?

Covenant Construction Services LLC's track record on similar federal projects would need to be thoroughly reviewed. While the provided data indicates their NAICS code is 236220 (Commercial and Institutional Building Construction), specific details about their past performance on VA or other federal healthcare construction contracts are not included. A deeper dive into contract databases like SAM.gov or FPDS would reveal past awards, performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), and any history of disputes or challenges. Understanding their experience with projects of comparable size, complexity, and regulatory requirements (like healthcare facility construction) is crucial for assessing their capability to successfully execute this Des Moines laboratory expansion.

How does the awarded price compare to similar VA laboratory expansion projects?

To benchmark the $18.8 million award for the Des Moines VACIHCS laboratory expansion, a comparative analysis with similar projects is necessary. This would involve identifying other VA or federal laboratory expansion and remodeling contracts awarded within the last 1-3 years, considering factors such as square footage, scope of work (e.g., specialized equipment installation, HVAC upgrades), geographic location (to account for regional cost differences), and contract type. Without access to a comprehensive database of comparable projects and their specific details, it is difficult to definitively state whether this award represents excellent, good, or fair value. However, the firm-fixed-price nature and the presence of multiple bidders suggest an effort to secure competitive pricing.

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

While firm-fixed-price (FFP) contracts are generally favored for mitigating cost overrun risks for the government, potential risks still exist. For this construction project, risks could include the contractor underestimating costs, leading to potential quality compromises or a desire to seek change orders if unforeseen conditions arise. The contractor might also face challenges in sourcing materials or labor, potentially leading to schedule delays, although FFP contracts typically place the burden of such risks on the contractor. Ensuring the initial scope of work is clearly defined and comprehensive is critical to minimize the need for costly change orders. The government's primary risk is ensuring the contractor has the capability and incentive to deliver the project to the specified quality standards within the fixed price.

How effective are the current oversight mechanisms for ensuring project success?

The effectiveness of oversight mechanisms for this project hinges on the diligence of the Department of Veterans Affairs' contracting officers and project managers. Standard oversight includes regular progress meetings, site inspections, review of payment requests against milestones achieved, and adherence to the contract's specifications and schedule. The firm-fixed-price structure provides a strong incentive for the contractor to manage costs and timelines efficiently. However, the complexity of laboratory construction, which may involve specialized equipment and stringent environmental controls, requires vigilant oversight to ensure compliance with all technical requirements and safety standards. The VA's Inspector General provides an additional layer of oversight for potential fraud, waste, or abuse.

What is the historical spending trend for laboratory construction and renovation within the VA?

Historical spending trends for laboratory construction and renovation within the Department of Veterans Affairs (VA) generally show consistent investment in upgrading healthcare infrastructure to meet the evolving needs of veterans and advancements in medical technology. The VA has a significant portfolio of medical facilities, many of which require periodic modernization. Specific figures for laboratory construction would require detailed analysis of historical VA budget allocations and contract awards across different fiscal years. However, it is reasonable to assume that spending in this category fluctuates based on infrastructure assessments, capital investment plans, and the prioritization of facility upgrades across the VA system. This $18.8 million contract represents a specific investment within that broader trend.

What are the potential workforce implications of this contract?

This contract is expected to have positive workforce implications, primarily in the short to medium term, within the Des Moines, Iowa region. The construction activities required for expanding and remodeling the laboratory will necessitate the hiring of skilled tradespeople, including electricians, plumbers, HVAC technicians, carpenters, and general laborers. Covenant Construction Services LLC, as the prime contractor, will likely employ a significant number of these workers directly or through its subcontractors. This influx of project-based employment can provide economic benefits to the local community. Once the construction is complete, the expanded laboratory facilities may lead to the hiring of additional permanent staff, such as laboratory technicians, scientists, and support personnel, to operate the enhanced services.

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: 36C77625B0043

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2640 BERKSHIRE PKWY STE 100, CLIVE, IA, 50325

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: $18,848,838

Exercised Options: $18,848,838

Current Obligation: $18,848,838

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline