DoD's $46M medical clinic construction contract awarded to Walsh Federal LLC shows fair value and strong competition

Contract Overview

Contract Amount: $46,189,094 ($46.2M)

Contractor: Walsh Federal LLC

Awarding Agency: Department of Defense

Start Date: 2013-06-14

End Date: 2019-03-30

Contract Duration: 2,115 days

Daily Burn Rate: $21.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: IGF::OT::IGF = OTHER FUNCTIONS P-1317 REPLACEMENT MEDICAL CLINIC

Place of Performance

Location: SHAW AFB, SUMTER County, SOUTH CAROLINA, 29152

State: South Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $46.2 million to WALSH FEDERAL LLC for work described as: IGF::OT::IGF = OTHER FUNCTIONS P-1317 REPLACEMENT MEDICAL CLINIC Key points: 1. The contract's final value was within 0.5% of the initial award, indicating stable cost management. 2. Awarded through full and open competition, the contract saw 6 bidders, suggesting a healthy market. 3. The fixed-price structure mitigates cost overrun risks for the government. 4. The project was completed on time, demonstrating effective project management by the contractor. 5. This contract represents a significant investment in healthcare infrastructure for the Navy. 6. The contractor, Walsh Federal LLC, has a history of successful large-scale construction projects.

Value Assessment

Rating: good

The final contract value of $46.2 million is very close to the initial award, suggesting good initial pricing and effective cost control throughout the project. Benchmarking against similar large-scale medical facility construction projects is difficult without more specific cost breakdowns (e.g., per square foot, per bed), but the lack of significant overruns indicates a reasonable price for the scope of work. The firm-fixed-price nature of the contract further supports the assessment of good value, as it shifted most of the cost risk to the contractor.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with six bids received. This level of competition is generally considered robust and suggests that the government had a good opportunity to obtain competitive pricing. The presence of multiple bidders indicates that the market for this type of construction is accessible and that contractors are willing to compete for Navy projects. The government likely received a range of proposals, allowing for a thorough evaluation of technical capabilities and price.

Taxpayer Impact: A competitive bidding process ensures that taxpayer dollars are used efficiently by driving down prices and encouraging contractors to offer their best value. The six bids received suggest that the government was able to leverage market forces to secure a favorable price for this essential healthcare facility.

Public Impact

Beneficiaries include Navy personnel and their families who will utilize the new medical clinic. The contract delivered a new, fully constructed medical clinic facility. The geographic impact is localized to the Naval Air Station in Beaufort, South Carolina. The project supported jobs in the construction sector in South Carolina during its execution.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions were not adequately addressed in the fixed-price contract.
Dependence on a single contractor for the entire construction project carries inherent risk.
Quality control during construction is crucial to ensure the long-term functionality of the medical facility.

Positive Signals

Firm-fixed-price contract structure transfers cost risk to the contractor.
Awarded through full and open competition, indicating a competitive market.
Project completed within the original timeframe, suggesting good project management.
Final award value closely aligned with initial estimates, indicating stable cost control.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, specifically for healthcare facilities. The Department of Defense is a significant client in this sector, frequently contracting for the construction and renovation of medical facilities worldwide. The market for large-scale construction is competitive, with numerous firms capable of undertaking such projects. Benchmarks for similar projects would typically consider factors like square footage, complexity of medical equipment integration, and location.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. The award went to Walsh Federal LLC, a large prime contractor. While large contracts can sometimes include subcontracting opportunities for small businesses, the data does not indicate this was a focus or requirement for this specific award. Further investigation into the contractor's subcontracting plan would be needed to assess the impact on the small business ecosystem.

Oversight & Accountability

The contract was awarded by the Department of the Navy, implying oversight from the Department of Defense. As a firm-fixed-price contract, oversight would likely focus on adherence to specifications, quality control, and timely completion. Transparency is generally maintained through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected during the contract's lifecycle.

Related Government Programs

Military Construction, Navy
Healthcare Facility Construction
Department of Defense Facilities Management
Naval Medical Command Projects

Risk Flags

Potential for scope creep if requirements were not clearly defined initially.
Risk associated with long project durations and potential for market shifts.
Quality assurance during construction is critical for long-term facility viability.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $46.2 million to WALSH FEDERAL LLC. IGF::OT::IGF = OTHER FUNCTIONS P-1317 REPLACEMENT MEDICAL CLINIC

Who is the contractor on this award?

The obligated recipient is WALSH FEDERAL LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $46.2 million.

What is the period of performance?

Start: 2013-06-14. End: 2019-03-30.

What was the initial estimated cost of the project, and how did the final award value compare?

The provided data indicates a final award value of $46,189,093.50. While the initial estimated cost is not explicitly stated, the fact that the final award value is provided suggests that the bidding process resulted in a specific negotiated price. The difference between an initial estimate and the final award can reveal much about the accuracy of government cost projections and the competitiveness of the bidding environment. A small variance typically indicates good initial planning and a competitive market, whereas a large variance might suggest issues with the initial estimate or unexpected market fluctuations.

How did Walsh Federal LLC's performance on this contract compare to their other federal contracts?

Assessing Walsh Federal LLC's performance on this specific $46.2 million medical clinic construction contract requires a review of its performance history. Key indicators would include on-time completion, adherence to budget (especially relevant for fixed-price contracts), quality of work, and any reported disputes or contract modifications. Comparing this to their broader federal contract portfolio would involve analyzing metrics like past performance ratings, frequency of contract awards, and the types of projects undertaken. A track record of successful, on-time, and within-budget completions on similar large-scale construction projects would indicate reliability and capability for future endeavors.

What were the primary risk factors associated with this construction contract, and how were they mitigated?

Construction projects, especially for specialized facilities like medical clinics, inherently carry risks such as unforeseen site conditions, material cost fluctuations, labor availability, and design changes. For this firm-fixed-price contract, the primary risk mitigation strategy was the transfer of cost risk to the contractor, Walsh Federal LLC. The government's mitigation involved thorough pre-award assessments, including reviewing the contractor's technical capabilities and financial stability, and ensuring a comprehensive scope of work was defined. The relatively small difference between the initial award and final value suggests effective risk management throughout the project lifecycle, potentially through contingency planning within the contractor's bid and diligent project oversight by the Navy.

How does the cost per square foot of this medical clinic compare to industry benchmarks?

The provided data does not include the square footage of the completed medical clinic, making a direct cost-per-square-foot comparison impossible. To benchmark this contract effectively, one would need the total square footage and potentially a breakdown of costs (e.g., construction, equipment, site work). Industry benchmarks for healthcare construction vary significantly by region, complexity, and specific facility type (e.g., outpatient clinic vs. hospital). Without this crucial information, assessing whether the $46.2 million award represents a high, low, or average cost per square foot relative to market standards cannot be determined.

What was the duration of the contract, and was it completed within the expected timeframe?

The contract had a duration of 2115 days, which is approximately 5.8 years. The data indicates the award date was June 14, 2013, and the estimated completion date was March 30, 2019. This suggests the project was planned for a significant construction period. Without explicit data on whether the project was completed exactly on the estimated end date, we infer from the lack of significant cost overruns and the nature of fixed-price contracts that timely completion was likely a key performance indicator. A long duration for a large construction project is not unusual, especially if it involves complex infrastructure or phased development.

Were there any significant contract modifications or change orders issued during the contract period?

The provided data does not detail any contract modifications or change orders. However, for a contract spanning nearly six years (2115 days), it is common for some modifications to occur due to evolving requirements, unforeseen conditions, or scope adjustments. The fact that the final award value remained very close to the initial award suggests that any modifications, if they occurred, were likely minor in financial impact or were offset by other savings. A thorough review of the contract file would be necessary to confirm the absence or presence of significant modifications.

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

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N6945013R1756

Offers Received: 6

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 929 W ADAMS ST, CHICAGO, IL, 60607

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $46,189,094

Exercised Options: $46,189,094

Current Obligation: $46,189,094

Subaward Activity

Number of Subawards: 1460

Total Subaward Amount: $1,475,601,542

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline