VA awards $66M contract for schematic design of new bed tower to Ellerbe Becket Company

Contract Overview

Contract Amount: $66,088,227 ($66.1M)

Contractor: Ellerbe Becket Company, the

Awarding Agency: Department of Veterans Affairs

Start Date: 2005-07-01

End Date: 2018-02-28

Contract Duration: 4,625 days

Daily Burn Rate: $14.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: SCHEMATIC DESIGN FOR NEW BED TOWER.

Place of Performance

Location: ORLANDO, ORANGE County, FLORIDA, 32801

State: Florida Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $66.1 million to ELLERBE BECKET COMPANY, THE for work described as: SCHEMATIC DESIGN FOR NEW BED TOWER. Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract type is a definitive contract with a firm fixed price, indicating cost certainty. 3. The duration of the contract is over 12 years, suggesting a long-term project. 4. The contract was awarded to a single contractor, Ellerbe Becket Company. 5. The contract is for architectural services, a critical component of construction projects. 6. The contract is located in Florida, indicating a specific geographic focus.

Value Assessment

Rating: fair

The contract value of $66 million for schematic design services appears substantial. Benchmarking this against similar large-scale healthcare construction projects would be necessary to determine if the price is competitive. The firm fixed-price structure offers some cost predictability, but the long duration (over 12 years) could introduce risks if initial estimates do not account for inflation or unforeseen design changes. Without specific cost breakdowns or comparisons to industry standards for schematic design of major hospital facilities, a definitive value assessment is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit a bid. With 6 bidders, this suggests a reasonable level of competition for the architectural services required. A competitive process generally helps in achieving better pricing and selecting the most qualified bidder. The presence of multiple bidders implies that the market for such specialized architectural services is active.

Taxpayer Impact: A competitive award process is beneficial for taxpayers as it typically drives down costs and ensures the government receives the best value for its investment through a selection of qualified and competitively priced proposals.

Public Impact

The primary beneficiary is the Department of Veterans Affairs, which will receive the schematic design for a new bed tower. The services delivered are architectural design, crucial for the planning and eventual construction of healthcare facilities. The geographic impact is concentrated in Florida, where the new bed tower will be located. The contract supports the architecture and engineering workforce, specifically within the firm Ellerbe Becket Company and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (over 12 years) may lead to cost overruns due to inflation or scope creep if not managed tightly.
Reliance on a single contractor for an extended period could limit flexibility in adapting to evolving design needs or technological advancements.
The substantial contract value necessitates robust oversight to ensure adherence to the fixed-price agreement and prevent unnecessary expenditures.

Positive Signals

Awarded through full and open competition, indicating a fair and transparent selection process.
Firm fixed-price contract provides cost certainty for the government.
The contract is for a critical infrastructure project (new bed tower) that will likely improve healthcare services for veterans.

Sector Analysis

This contract falls within the Architectural Services sector, a subset of the broader Construction and Engineering industry. The market for large-scale healthcare facility design is specialized, often dominated by firms with demonstrated experience in hospital and medical center projects. The value of this contract, $66 million, is significant and indicative of a major infrastructure undertaking. Comparable spending benchmarks would involve analyzing other large hospital design contracts awarded by federal agencies or large healthcare systems.

Small Business Impact

The contract details do not indicate any specific small business set-asides or subcontracting requirements. Given the specialized nature and significant value of architectural services for a major hospital bed tower, it is possible that the prime contractor may engage subcontractors for specific aspects of the design. However, without explicit set-aside provisions, the direct impact on small businesses as prime contractors is likely limited, though opportunities may exist through subcontracting.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Veterans Affairs' contracting and project management offices. As a definitive contract with a firm fixed price, the primary accountability measure is adherence to the agreed-upon scope and price. Transparency would be enhanced through regular progress reports and potential site visits during the schematic design phase. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

VA Major Medical Facility Lease Program
VA Capital Asset Realignment and Enhancement Act (CAREA)
Federal Buildings Fund
Military Construction, Veterans Affairs, and Related Agencies Appropriations Act

Risk Flags

Long contract duration
Potential for cost escalation over time
Reliance on a single contractor for an extended period

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $66.1 million to ELLERBE BECKET COMPANY, THE. SCHEMATIC DESIGN FOR NEW BED TOWER.

Who is the contractor on this award?

The obligated recipient is ELLERBE BECKET COMPANY, THE.

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 $66.1 million.

What is the period of performance?

Start: 2005-07-01. End: 2018-02-28.

What is the track record of Ellerbe Becket Company with the Department of Veterans Affairs or similar federal healthcare projects?

Ellerbe Becket Company, now part of AECOM, has a significant history of designing large-scale healthcare facilities, including numerous projects for the Department of Defense and various hospital systems. Their experience with federal agencies, particularly the VA, would be a key factor in their selection for this schematic design contract. A review of past performance evaluations and any past disputes or contract modifications on similar VA projects would provide further insight into their reliability and capability. Assessing their portfolio of completed VA medical facilities would help determine if their past performance aligns with the scale and complexity required for a new bed tower schematic design.

How does the $66 million contract value compare to industry benchmarks for schematic design of large hospital bed towers?

Determining the precise value benchmark for schematic design is complex as it depends heavily on project scope, size (square footage), complexity of services, and location. However, schematic design costs typically represent a fraction of the total construction cost, often ranging from 1% to 5%. If this $66 million represents the total contract value for schematic design only, it would suggest a very large and complex facility. For context, total construction costs for hospital bed towers can range from hundreds of millions to over a billion dollars. Therefore, $66 million for the initial schematic design phase alone would need to be carefully evaluated against the projected total construction cost and the specific deliverables outlined in the contract to ascertain its reasonableness.

What are the primary risks associated with a firm fixed-price contract spanning over 12 years for schematic design?

The primary risks with a firm fixed-price contract over such an extended duration (4625 days, approximately 12.7 years) for schematic design include potential scope creep, inflation, and the contractor's potential to become entrenched, leading to reduced innovation or responsiveness. While the fixed price offers cost certainty, if the initial scope is not meticulously defined or if unforeseen design challenges arise, the contractor may resist changes without additional compensation, or conversely, the government may feel locked into a potentially outdated design. Inflation over such a long period could erode the real value of the contractor's compensation if not adequately factored into the initial pricing. Furthermore, maintaining contractor engagement and quality over such a long design phase requires diligent oversight.

What is the expected effectiveness of this schematic design in facilitating the subsequent construction phases?

The effectiveness of this schematic design will be measured by its clarity, completeness, and accuracy in guiding the subsequent design development, construction document, and actual construction phases. A well-executed schematic design should clearly define the project's scope, scale, and relationships between spaces, establish major building systems, and provide a solid foundation for detailed engineering. Its effectiveness will be crucial in minimizing changes, delays, and cost overruns during later stages. The VA will likely assess effectiveness through reviews at key milestones, ensuring the design meets functional requirements, regulatory standards, and the overall vision for the new bed tower.

How has VA spending on architectural services for major construction projects trended historically?

Historically, the VA's spending on architectural services for major construction projects fluctuates based on its capital investment priorities, congressional appropriations, and the overall healthcare infrastructure needs. The VA undertakes significant modernization and expansion efforts, often requiring substantial investments in design and planning. Analyzing historical spending patterns for similar large-scale projects, such as new hospital wings, bed towers, or major renovations, would reveal trends in contract values, types of services procured, and the competitive landscape for architectural firms serving the VA. This context helps in evaluating whether the $66 million award is consistent with past spending or represents a significant increase or decrease.

What are the implications of awarding a definitive contract versus other contract types for this schematic design project?

A definitive contract, in this context, likely refers to a contract that is considered final and binding, often used for services that are well-defined. Awarding a definitive contract for schematic design suggests that the VA had a clear understanding of the required services and expected outcomes. Compared to other contract types like indefinite-delivery/indefinite-quantity (IDIQ) or cost-plus contracts, a definitive contract, especially when firm fixed-price, offers greater predictability in terms of cost and schedule for the government. This structure is generally preferred when the scope of work is well-understood and risks can be reasonably assessed upfront, aiming to achieve a specific outcome at a predetermined price.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Architectural Services

Product/Service Code: ARCHITECT/ENGINEER SERVICES › ARCH-ENG SVCS - CONSTRUCTION

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: ARCHITECT-ENGINEER FAR 6.102

Solicitation ID: 673PR2950

Offers Received: 6

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1001 G STREET NW, WASHINGTON, DC, 20001

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $66,088,227

Exercised Options: $66,088,227

Current Obligation: $66,088,227

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Timeline