RJS Construction awarded $3.4M contract for CNC Hospital Phase I in Reno, Montana

Contract Overview

Contract Amount: $3,398,562 ($3.4M)

Contractor: RJS Construction Inc

Awarding Agency: Department of Health and Human Services

Start Date: 2025-09-23

End Date: 2027-04-30

Contract Duration: 584 days

Daily Burn Rate: $5.8K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: CNC HOSPITAL PHASE I RENO

Place of Performance

Location: CROW AGENCY, BIG HORN County, MONTANA, 59022

State: Montana Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $3.4 million to RJS CONSTRUCTION INC for work described as: CNC HOSPITAL PHASE I RENO Key points: 1. Contract value appears reasonable for a hospital construction project of this scope. 2. Limited competition may have impacted final pricing. 3. Project duration of 584 days suggests a significant undertaking. 4. Fixed-price contract shifts risk to the contractor. 5. Project is located in a region with specific healthcare needs. 6. No small business set-aside noted, potentially limiting broader economic impact.

Value Assessment

Rating: fair

The contract value of approximately $3.4 million for a hospital construction project's initial phase seems within a typical range for such endeavors. However, without specific details on the project's scope (e.g., square footage, specific facilities included), a precise value-for-money assessment is challenging. Benchmarking against similar hospital construction projects in similar geographic areas would be necessary for a more definitive evaluation. The firm fixed-price nature of the contract suggests that the contractor bears the risk of cost overruns, which can be a positive indicator for the government if the contractor has accurately estimated costs.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor can provide the required goods or services, or in specific circumstances like emergency procurements or when justified by the agency. The lack of competition means that the government did not benefit from a bidding process that could have potentially driven down prices through market forces. The justification for this sole-source award would need to be thoroughly reviewed to ensure it was appropriate and in the government's best interest.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as the government does not have the benefit of competitive bidding to ensure the lowest possible price. It also raises questions about whether alternative solutions or contractors were adequately considered.

Public Impact

The primary beneficiaries of this contract are the patients and healthcare providers in the Reno, Montana area who will gain access to improved medical facilities. The contract will deliver the first phase of construction for the CNC Hospital, laying the groundwork for future expansion and services. The geographic impact is concentrated in Reno, Montana, addressing local healthcare infrastructure needs. The project will likely create temporary construction jobs in the region, contributing to the local economy during the construction period.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases cost to taxpayers.
Lack of transparency in the justification for sole-source procurement.
Potential for cost overruns if the sole-source justification was not robust.
Limited opportunity for small businesses to participate due to non-competitive nature.

Positive Signals

Firm fixed-price contract shifts cost overrun risk to the contractor.
Project addresses critical healthcare infrastructure needs.
Contract award provides clarity on project timeline and funding.

Sector Analysis

The construction sector is a significant part of the federal spending landscape, encompassing a wide range of projects from infrastructure to facility development. This contract falls under commercial and institutional building construction, a sub-sector that includes the building of hospitals, schools, and other public facilities. Federal spending in this area is often driven by the need to maintain and upgrade existing infrastructure or to provide new facilities in underserved areas. Benchmarking this contract's value against similar hospital construction projects would require data on square footage, complexity, and location-specific construction costs.

Small Business Impact

This contract does not appear to have a small business set-aside. The sole-source nature of the award further limits opportunities for small businesses to participate, either as prime contractors or subcontractors, unless they are specifically engaged by the prime contractor. This could mean that the economic benefits of this contract are less distributed within the small business ecosystem. Future contracts related to this project or similar healthcare infrastructure developments should explore set-aside options to ensure small business participation.

Oversight & Accountability

Oversight for this contract would primarily fall under the Indian Health Service (IHS) within the Department of Health and Human Services. The agency's contracting officers and program managers are responsible for monitoring performance, ensuring compliance with contract terms, and approving payments. Given the sole-source nature, a robust justification and thorough review process would be expected. Transparency regarding the contract award and performance metrics would be crucial for public accountability. Any Inspector General (IG) jurisdiction would depend on the specific findings or allegations of fraud, waste, or abuse related to the contract.

Related Government Programs

Indian Health Service Construction Projects
Department of Health and Human Services Facilities
Rural Healthcare Infrastructure Development
Federal Building and Construction Contracts

Risk Flags

Sole-source award raises concerns about competition and potential cost inflation.
Lack of detailed scope information hinders comprehensive value assessment.
Contract duration requires monitoring to ensure timely completion.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $3.4 million to RJS CONSTRUCTION INC. CNC HOSPITAL PHASE I RENO

Who is the contractor on this award?

The obligated recipient is RJS CONSTRUCTION INC.

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 $3.4 million.

What is the period of performance?

Start: 2025-09-23. End: 2027-04-30.

What is the specific scope of work for CNC Hospital Phase I, and how does it compare to industry standards for similar projects?

The provided data does not detail the specific scope of work for CNC Hospital Phase I beyond it being a 'Commercial and Institutional Building Construction' project. To assess its alignment with industry standards, we would need information such as the total square footage of the facility, the number of beds or treatment rooms planned, the complexity of the medical equipment to be installed, and the specific types of services the hospital will offer. Benchmarking would involve comparing these metrics against recently completed hospital construction projects of similar size and complexity in comparable geographic regions. Without this granular detail, it's difficult to definitively state how the scope compares to industry standards or to precisely evaluate the value for money.

What was the justification for awarding this contract on a sole-source basis, and were alternative procurement methods considered?

The data indicates this contract was awarded on a 'NOT AVAILABLE FOR COMPETITION' basis, which typically signifies a sole-source or limited-source justification. Federal procurement regulations require agencies to justify sole-source awards, often citing reasons such as unique capabilities of a single contractor, urgent and compelling needs, or specific statutory authority. To understand the full rationale, one would need to review the official Justification for Other Than Full and Open Competition (JOFOC) document filed by the Indian Health Service. This document should outline the specific circumstances necessitating a sole-source award and explain why other potential contractors or competitive bidding were not feasible or appropriate for this particular project. Without access to this justification, it is impossible to assess the validity of the sole-source determination.

How does the contract duration of 584 days compare to typical timelines for similar hospital construction phases?

A contract duration of 584 days, approximately 19 months, for a hospital construction phase is a significant period. Typical timelines for hospital construction can vary widely based on the project's scale, complexity, and specific phase. Phase I often involves foundational work, site preparation, and potentially the initial structural elements. For a project of this nature, a duration of 1.5 to 2 years is not uncommon, especially considering potential weather delays, regulatory approvals, and the specialized requirements of healthcare facilities. To provide a more precise comparison, we would need to know the specific deliverables expected within this timeframe and the total planned duration for the entire hospital project. However, the duration itself does not immediately suggest an anomaly without further context on the project's scope.

What are the potential risks associated with a firm fixed-price contract for a project of this nature?

A firm fixed-price (FFP) contract is generally favorable to the government as it shifts the risk of cost overruns to the contractor. However, for complex projects like hospital construction, there are still potential risks. If the contractor's initial cost estimate was too low due to unforeseen circumstances (e.g., material price volatility, unexpected site conditions, design changes), they might face financial losses, potentially impacting their ability to complete the project to the required standards or leading to disputes. Conversely, if the price was set too high due to a lack of competition or overly conservative bidding, the government may overpay. The risk for the government in an FFP contract primarily lies in ensuring the initial price accurately reflects the scope and market conditions, and that the contractor has the capacity and incentive to deliver quality work within that price.

What is the historical spending pattern for similar hospital construction projects by the Indian Health Service or HHS?

Analyzing historical spending patterns for similar hospital construction projects by the Indian Health Service (IHS) or the broader Department of Health and Human Services (HHS) would provide crucial context for this $3.4 million contract. This would involve examining past awards for facility construction, renovation, or expansion, noting contract values, durations, competition levels, and project outcomes. Understanding the typical cost per square foot, the average duration for different project phases, and the prevalence of sole-source versus competitive awards within IHS/HHS would help determine if this contract represents a fair price and efficient procurement. Without access to historical spending data specific to IHS/HHS construction projects, it is difficult to benchmark this award effectively or identify any significant deviations from past practices.

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

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: RJS Construction, Inc.

Address: 1618 RUDKIN RD STE B, UNION GAP, WA, 98901

Business Categories: American Indian Owned Business, Category Business, Corporate Entity Not Tax Exempt, DoT Certified Disadvantaged Business Enterprise, Minority Owned Business, Native American Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business, Woman Owned Business, Women Owned Small Business

Financial Breakdown

Contract Ceiling: $3,398,562

Exercised Options: $3,398,562

Current Obligation: $3,398,562

Actual Outlays: $29,625

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline