VA awards $86.6M for new CARES bed tower addition, a large construction project in Ohio

Contract Overview

Contract Amount: $86,555,647 ($86.6M)

Contractor: Walsh Demaria Joint Venture IV

Awarding Agency: Department of Veterans Affairs

Start Date: 2007-09-27

End Date: 2011-05-26

Contract Duration: 1,337 days

Daily Burn Rate: $64.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: CONSTRUCT A NEW 258,080 GSF CARES BED TOWER ADDITION. TOWER INCLUDES 8 FLOORS WITH A PENTHOUSE.

Place of Performance

Location: CLEVELAND, CUYAHOGA County, OHIO, 44106

State: Ohio Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $86.6 million to WALSH DEMARIA JOINT VENTURE IV for work described as: CONSTRUCT A NEW 258,080 GSF CARES BED TOWER ADDITION. TOWER INCLUDES 8 FLOORS WITH A PENTHOUSE. Key points: 1. The contract represents a significant investment in healthcare infrastructure, aiming to expand critical patient capacity. 2. The project's fixed-price nature suggests a defined scope and budget, potentially mitigating cost overruns. 3. A single award for a large construction project may indicate specialized contractor requirements or market consolidation. 4. The duration of the contract (over three years) points to the complexity and scale of the construction. 5. The project's success hinges on timely completion and adherence to building codes and healthcare facility standards. 6. The absence of small business set-asides warrants further investigation into subcontracting opportunities.

Value Assessment

Rating: good

The $86.6 million award for a 258,080 GSF bed tower addition appears to be a substantial investment in healthcare infrastructure. Benchmarking this against similar large-scale hospital construction projects would provide a clearer picture of value for money. The firm-fixed-price contract type suggests that the contractor assumed most of the risk for cost overruns, which is generally favorable for the government. However, without specific cost breakdowns or comparisons to industry standards for similar square footage and complexity, 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 offers. With three bidders, the competition level suggests a moderately competitive environment for this specialized construction project. While multiple bidders are positive, the specific number (three) might be on the lower side for a project of this magnitude, potentially influenced by the specialized nature of healthcare construction and the required expertise.

Taxpayer Impact: Full and open competition, even with three bidders, generally leads to better price discovery and potentially more favorable pricing for taxpayers compared to sole-source or limited competition scenarios.

Public Impact

The primary beneficiaries are patients requiring expanded care capacity at the VA facility in Ohio. The project delivers a new, multi-floor bed tower addition, enhancing medical services and infrastructure. The geographic impact is localized to the specific VA medical center in Ohio where the construction is taking place. The construction phase will likely involve a significant number of skilled trades and construction workers, providing employment opportunities. The long-term impact includes improved healthcare delivery and potentially reduced wait times for veterans.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for construction delays impacting patient care timelines.
Risk of unforeseen site conditions or design changes increasing costs, despite fixed-price contract.
Ensuring compliance with stringent healthcare facility building codes and standards.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Full and open competition suggests a robust bidding process.
Award to a joint venture may indicate capacity to handle large-scale projects.

Sector Analysis

This contract falls within the commercial and institutional building construction sector, specifically focused on healthcare facilities. The market for healthcare construction is substantial, driven by the need for modernization, expansion, and specialized equipment integration. Large projects like this often involve complex coordination between architects, engineers, and specialized construction firms. Benchmarks for similar hospital expansions can vary widely based on location, complexity, and specific medical services offered.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This suggests that the scale and specialized nature of the project likely favored larger, established construction firms. Further analysis would be needed to determine if the prime contractor has a subcontracting plan that includes opportunities for small businesses to participate in various aspects of the construction.

Oversight & Accountability

Oversight for this definitive contract would typically be managed by the Department of Veterans Affairs contracting officers and project managers. The firm-fixed-price nature provides a degree of accountability for the contractor to deliver the project within the agreed-upon cost. Transparency would be enhanced through regular progress reports and site inspections. The VA's Office of Inspector General may also conduct audits or investigations if any concerns regarding performance or financial integrity arise.

Related Government Programs

VA Medical Facility Construction
Healthcare Infrastructure Projects
Large-Scale Building Construction
Department of Veterans Affairs Capital Investments

Risk Flags

Potential for cost overruns if unforeseen site conditions arise, despite fixed-price contract.
Risk of project delays impacting the timely availability of increased patient capacity.
Ensuring adequate small business subcontracting opportunities within a large prime contract.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $86.6 million to WALSH DEMARIA JOINT VENTURE IV. CONSTRUCT A NEW 258,080 GSF CARES BED TOWER ADDITION. TOWER INCLUDES 8 FLOORS WITH A PENTHOUSE.

Who is the contractor on this award?

The obligated recipient is WALSH DEMARIA JOINT VENTURE IV.

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 $86.6 million.

What is the period of performance?

Start: 2007-09-27. End: 2011-05-26.

What is the track record of Walsh Demaria Joint Venture IV in completing large-scale healthcare construction projects?

Information on the specific track record of 'Walsh Demaria Joint Venture IV' for large-scale healthcare construction projects is not directly available in the provided data snippet. As a joint venture, its performance would be a composite of its constituent companies' capabilities and past project execution. To assess their track record, one would need to research the individual companies within the joint venture, their history with VA contracts, their performance on similar-sized healthcare facilities, and any past performance evaluations or disputes. A review of federal procurement databases (like SAM.gov or FPDS) and industry news could reveal their experience with complex medical building projects, adherence to schedules, and budget management on prior endeavors.

How does the cost per square foot for this project compare to similar VA hospital construction projects?

The total award amount is $86,555,647.16 for 258,080 gross square feet (GSF). This equates to approximately $335 per GSF. Comparing this to similar VA hospital construction projects requires access to a database of recent VA capital construction awards with detailed cost breakdowns. Factors such as location (labor and material costs vary significantly by region), the complexity of the medical equipment and systems being installed, and the specific type of facility (e.g., acute care, long-term care, research) heavily influence cost per square foot. Generally, healthcare construction is more expensive than standard commercial construction due to specialized requirements. A preliminary assessment suggests this figure is within a plausible range for modern healthcare facilities, but a definitive benchmark comparison would necessitate a detailed analysis of comparable projects.

What are the primary risks associated with a firm-fixed-price contract for a project of this scale and duration?

While a firm-fixed-price (FFP) contract is generally advantageous for the government by capping costs, it shifts significant risk to the contractor. For a large-scale, multi-year construction project like this VA bed tower, the primary risks for the contractor include unforeseen site conditions (e.g., unexpected soil issues, hazardous materials), escalation of material and labor costs beyond projections, design errors or omissions requiring costly rework, and delays caused by factors outside their control (e.g., permitting issues, extreme weather). If these risks materialize and the contractor cannot absorb the additional costs, it could lead to contractor default, project delays, or disputes, potentially impacting the government's ability to receive the facility on time and within the originally intended scope, despite the FFP structure.

What is the expected impact of this new bed tower addition on the VA's overall capacity and service delivery in Ohio?

The addition of a 258,080 GSF bed tower is designed to significantly increase the healthcare facility's capacity. While the exact number of beds is not specified, such an expansion typically aims to accommodate more patients, potentially reducing wait times for admissions and specialized treatments. This could lead to improved service delivery by providing state-of-the-art facilities and potentially allowing for the introduction of new medical services or the expansion of existing ones. The impact on service delivery in Ohio would be concentrated at the specific VA medical center receiving the addition, enhancing its ability to serve the veteran population in that region.

How has VA spending on healthcare construction projects trended over the past five years, and does this award align with those trends?

Analyzing VA spending trends on healthcare construction requires access to historical budget and contract data. Generally, the VA has faced consistent needs for infrastructure modernization and expansion to meet the healthcare demands of the veteran population. Spending in this area is often influenced by congressional appropriations, infrastructure initiatives, and the condition of existing facilities. A $86.6 million award for a major construction project like a bed tower addition suggests a continued commitment to capital investments in healthcare facilities. Without specific trend data, it's difficult to definitively say if this award aligns perfectly, but it represents a significant single investment consistent with the ongoing need for facility upgrades and capacity expansion within the VA system.

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: TWO STEP

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 929 WEST ADAMS STREET, CHICAGO, IL, 60607

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $86,555,687

Exercised Options: $86,555,687

Current Obligation: $86,555,647

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Timeline