HHS awards $2M renovation contract to Lacreek Development Corp for Rosebud Women's Health facility

Contract Overview

Contract Amount: $2,024,479 ($2.0M)

Contractor: Lacreek Development Corp

Awarding Agency: Department of Health and Human Services

Start Date: 2024-09-20

End Date: 2026-07-31

Contract Duration: 679 days

Daily Burn Rate: $3.0K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: ROSEBUD WOMEN HEALTH RENOVATION CONSTRUCTION (BID PACK 2), GP21RB100H07, PA# 130650

Place of Performance

Location: ROSEBUD, TODD County, SOUTH DAKOTA, 57570

State: South Dakota Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $2.0 million to LACREEK DEVELOPMENT CORP for work described as: ROSEBUD WOMEN HEALTH RENOVATION CONSTRUCTION (BID PACK 2), GP21RB100H07, PA# 130650 Key points: 1. Contract awarded to a single vendor, raising questions about competition and potential cost savings. 2. The fixed-price contract structure aims to control costs, but the absence of competition limits price discovery. 3. Performance is scheduled over 679 days, indicating a significant renovation project. 4. The contract is for commercial and institutional building construction, a common sector for federal spending. 5. Geographic focus on South Dakota may indicate specific regional needs or contractor availability. 6. The lack of small business set-aside suggests this was not specifically targeted for small business participation.

Value Assessment

Rating: questionable

The contract value of $2,024,479 for a renovation project of this duration (679 days) requires further benchmarking against similar construction projects. Without competitive bidding, it is difficult to assess if the pricing represents fair market value. The fixed-price nature provides cost certainty for the government, but the lack of competition means there's no direct comparison to gauge value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not openly competed. This approach is typically used when only one vendor can meet specific requirements, or in cases of urgent need. The limited competition means there were no other bidders to compare against, potentially leading to higher costs than if multiple firms had vied for the contract.

Taxpayer Impact: The lack of competition means taxpayers may not have received the benefit of a lower price that could have resulted from a competitive bidding process.

Public Impact

The primary beneficiaries are likely the women served by the Rosebud Women's Health facility, who will receive improved infrastructure. The services delivered include comprehensive renovation and construction of the healthcare facility. The geographic impact is concentrated in South Dakota, specifically serving the Rosebud Indian Reservation area. The contract will likely involve local labor and subcontractors, providing economic benefits to the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Absence of small business set-aside may reduce opportunities for smaller firms.
Long performance period could introduce risks related to material cost fluctuations or unforeseen construction challenges.

Positive Signals

Firm fixed-price contract provides cost certainty.
Award to a specific contractor suggests they possess unique capabilities or are strategically located for this project.
Renovation of a healthcare facility addresses a critical need for improved infrastructure.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a significant area of federal procurement. The Indian Health Service (IHS) frequently awards contracts for facility upgrades and construction to serve Native American communities. Benchmarking this contract's value would involve comparing it to similar renovation projects undertaken by IHS or other federal agencies in similar geographic locations and for comparable facility types.

Small Business Impact

The contract was not awarded as a small business set-aside, nor is there an indication of mandatory subcontracting goals for small businesses. This suggests that the primary contractor, Lacreek Development Corp, was selected without specific provisions to ensure small business participation. The impact on the small business ecosystem is neutral to negative, as opportunities for subcontracting may not have been prioritized.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of Health and Human Services (HHS) and the Indian Health Service (IHS). Accountability measures are inherent in the firm fixed-price contract, requiring the contractor to complete the work within the agreed-upon scope and price. Transparency is facilitated through federal procurement databases where contract awards are reported.

Related Government Programs

Indian Health Service Facility Construction
Rural Healthcare Infrastructure Projects
Department of Health and Human Services Construction Contracts
Native American Health Services Facilities

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns without competitive bidding

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $2.0 million to LACREEK DEVELOPMENT CORP. ROSEBUD WOMEN HEALTH RENOVATION CONSTRUCTION (BID PACK 2), GP21RB100H07, PA# 130650

Who is the contractor on this award?

The obligated recipient is LACREEK DEVELOPMENT CORP.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Indian Health Service).

What is the total obligated amount?

The obligated amount is $2.0 million.

What is the period of performance?

Start: 2024-09-20. End: 2026-07-31.

What is the track record of Lacreek Development Corp in completing federal construction contracts, particularly those with the Indian Health Service?

Information regarding Lacreek Development Corp's specific track record with federal contracts, especially those awarded by the Indian Health Service, is not detailed in the provided data. A comprehensive review would require examining past performance evaluations, contract completion history, and any reported disputes or challenges. Understanding their experience with similar-sized projects and facility types would be crucial for assessing their capability to successfully execute this renovation. Without this historical data, the assessment of risk associated with the contractor's performance remains incomplete.

How does the awarded amount of $2,024,479 compare to similar renovation projects for healthcare facilities of this size and scope?

The awarded amount of $2,024,479 for a 679-day renovation project at the Rosebud Women's Health facility needs to be benchmarked against comparable federal construction contracts. Without access to a database of similar projects, a precise comparison is difficult. However, for a project of this duration and nature, the cost per day or per square foot would be key metrics. Given it's a sole-source award, there's a higher likelihood that the price may not reflect the most competitive market rate. Further analysis would involve identifying similar IHS or other agency renovation projects in rural areas and comparing their total costs, duration, and scope.

What are the specific risks associated with a sole-source award for a construction project of this magnitude?

The primary risk associated with a sole-source award for a construction project of this magnitude is the potential for inflated pricing due to the lack of competitive pressure. Without multiple bids, the government cannot be assured it is receiving the best possible value. Other risks include potential quality issues if the contractor is not adequately vetted or incentivized to perform at a high level, and delays if the contractor faces unforeseen challenges without the competitive drive to overcome them efficiently. The absence of competition also limits the government's leverage in negotiating terms and scope.

What is the expected impact of this renovation on the delivery of women's health services in the Rosebud area?

This renovation is expected to significantly improve the delivery of women's health services by modernizing the facility. Enhanced infrastructure can lead to better patient comfort, improved workflow for medical staff, and potentially the ability to offer a wider range of services or accommodate more patients. A well-renovated facility can also contribute to a more positive and healing environment, indirectly impacting patient satisfaction and health outcomes. The project directly addresses the need for updated healthcare infrastructure in the region.

What is the historical spending pattern for facility renovations by the Indian Health Service in South Dakota?

Analyzing historical spending patterns for facility renovations by the Indian Health Service (IHS) in South Dakota would provide context for this $2.02 million contract. This would involve examining previous IHS contracts for construction and renovation in the state, noting the average contract values, project durations, and types of facilities. Understanding whether this award is consistent with, higher than, or lower than historical averages for similar projects would be insightful. It would also help determine if there's a trend of sole-source awards for such projects in the region or if competitive bidding is more common.

Are there any specific regulatory or unique circumstances that justified the sole-source award for this particular renovation?

The justification for a sole-source award typically stems from specific circumstances outlined in federal acquisition regulations. For this contract, potential justifications could include the unique capabilities of Lacreek Development Corp, the urgent need for renovation that precluded a full solicitation process, or the project's location on or near the Rosebud Indian Reservation, which might have specific tribal considerations or require a contractor with specialized knowledge of working within that environment. Without explicit documentation from the agency, the precise reason for the sole-source designation remains speculative but would likely fall under one of these regulatory exceptions.

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: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: 75H70124R00038

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 21617 US HWY 18, MARTIN, SD, 57551

Business Categories: American Indian Owned Business, Category Business, Corporate Entity Not Tax Exempt, HUBZone Firm, Minority Owned Business, Native American Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $2,024,479

Exercised Options: $2,024,479

Current Obligation: $2,024,479

Actual Outlays: $741,688

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline