VA Southern Nevada Healthcare System nursing home contract awarded to Clark Construction Group for nearly $50 million

Contract Overview

Contract Amount: $49,906,276 ($49.9M)

Contractor: Clark Construction Group, LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2007-09-28

End Date: 2012-12-31

Contract Duration: 1,921 days

Daily Burn Rate: $26.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: NEW VA SOUTHERN NEVADA HEALTHCARE SYSTEM, PHASE III, 120 BED NURSING HOME

Place of Performance

Location: NORTH LAS VEGAS, CLARK County, NEVADA, 89030

State: Nevada Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $49.9 million to CLARK CONSTRUCTION GROUP, LLC for work described as: NEW VA SOUTHERN NEVADA HEALTHCARE SYSTEM, PHASE III, 120 BED NURSING HOME Key points: 1. Contract value of $49.9 million for a 120-bed nursing home. 2. Awarded under full and open competition, suggesting a competitive bidding process. 3. Firm Fixed Price contract type indicates defined costs and potential for contractor risk. 4. Project duration of 1921 days (over 5 years) for construction. 5. Construction services fall under NAICS code 236220. 6. Geographic location is Nevada, serving veterans in the region.

Value Assessment

Rating: good

The contract value of approximately $50 million for a 120-bed nursing home appears reasonable for a large-scale construction project of this nature. Without specific benchmarks for similar VA nursing home constructions in the region or detailed cost breakdowns, a precise value-for-money assessment is challenging. However, the firm fixed-price nature of the contract suggests that the contractor assumed significant cost risk, which can be a positive indicator for the government if managed effectively. The award amount is within the expected range for major healthcare infrastructure development.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of two bidders suggests a moderate level of competition for this significant construction project. While two bidders are better than one, a higher number of bids typically leads to more robust price discovery and potentially lower prices for the government. The specific details of the bidding process and the nature of the proposals submitted would provide further insight into the effectiveness of the competition.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down costs and encourage innovation. The presence of multiple bidders increases the likelihood that the government secured a fair market price for the construction services.

Public Impact

Benefits veterans in Southern Nevada by providing a new 120-bed nursing home facility. Enhances healthcare infrastructure for the Department of Veterans Affairs. Supports the local economy through construction jobs and related services in Nevada. Provides long-term care services for aging and infirm veterans in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for construction cost overruns if unforeseen issues arise during the multi-year project.
Ensuring timely completion within the 5-year timeframe is critical for service delivery.
Quality of construction must meet stringent healthcare facility standards.

Positive Signals

Firm Fixed Price contract helps control costs and provides budget certainty.
Awarded to a reputable construction firm, Clark Construction Group, LLC.
Full and open competition suggests a fair market price was likely obtained.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, specifically for healthcare facilities. The construction of large-scale healthcare infrastructure, such as nursing homes, is a significant segment of the construction market. The total contract value of nearly $50 million is substantial for a single project, reflecting the complexity and scale of building a 120-bed facility. Comparable spending benchmarks would involve analyzing other large healthcare construction projects, particularly those undertaken by government agencies or for similar patient populations.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting requirements for small businesses mandated by a set-aside. However, the prime contractor, Clark Construction Group, LLC, may engage small businesses as subcontractors as part of their overall project execution strategy. The impact on the small business ecosystem would depend on the extent to which they are utilized in the supply chain for this project.

Oversight & Accountability

Oversight for this construction contract would typically be managed by the Department of Veterans Affairs' project management and contracting officers. Accountability measures would include adherence to the contract terms, specifications, and schedule. Transparency is generally maintained through contract award databases and public reporting. Inspector General jurisdiction would apply if any fraud, waste, or abuse related to the contract were suspected or identified.

Related Government Programs

VA Major Medical Facility Lease Program
VA Capital Asset Realignment and Enhancement Act (CAREA)
Department of Defense Construction Contracts
Federal Healthcare Facility Construction

Risk Flags

Potential for schedule delays impacting service delivery.
Risk of cost overruns despite fixed-price contract if unforeseen issues arise.
Ensuring adherence to stringent healthcare facility construction standards.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $49.9 million to CLARK CONSTRUCTION GROUP, LLC. NEW VA SOUTHERN NEVADA HEALTHCARE SYSTEM, PHASE III, 120 BED NURSING HOME

Who is the contractor on this award?

The obligated recipient is CLARK CONSTRUCTION GROUP, LLC.

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 $49.9 million.

What is the period of performance?

Start: 2007-09-28. End: 2012-12-31.

What is the track record of Clark Construction Group, LLC with the Department of Veterans Affairs?

Clark Construction Group, LLC has a significant history of working with federal agencies, including the Department of Veterans Affairs. While specific details on past VA projects, their value, and performance ratings are not provided in this data snippet, their selection as a prime contractor for a project of this magnitude suggests they have met VA's pre-qualification requirements. A deeper dive into contract databases like SAM.gov or FPDS would reveal the extent and nature of their prior VA engagements, including any performance issues or commendations. Their ability to secure such a large contract implies a generally positive or at least acceptable track record with the government.

How does the cost per bed for this nursing home compare to similar federal or private facilities?

The total contract value is approximately $49.9 million for a 120-bed facility. This equates to a construction cost of roughly $415,833 per bed ($49,900,000 / 120 beds). Benchmarking this figure requires comparing it against the construction costs of similar nursing homes, particularly those built for federal agencies or in the same geographic region. Construction costs for healthcare facilities can vary widely based on location, complexity, technology integration, and finish levels. Without specific comparable data points for VA nursing homes or other institutional healthcare facilities of similar scale and vintage, it is difficult to definitively state whether this cost per bed represents excellent value, is average, or is on the higher side. However, for a large, modern healthcare facility, this figure is within a plausible range.

What are the primary risks associated with a large, multi-year construction project like this?

Large, multi-year construction projects inherently carry several risks. For this VA nursing home, key risks include: 1) **Cost Overruns:** Unforeseen site conditions, material price fluctuations, labor shortages, or design changes can escalate costs beyond the initial fixed price, although the contractor bears much of this risk. 2) **Schedule Delays:** Weather, permitting issues, supply chain disruptions, or contractor performance problems can push back the completion date, impacting the VA's ability to provide services. 3) **Quality Control:** Ensuring the construction meets the rigorous standards for a healthcare facility, especially regarding infection control, accessibility, and structural integrity, is paramount. 4) **Contractor Performance:** The financial stability and management capacity of Clark Construction Group, LLC are critical. 5) **Regulatory Changes:** Evolving building codes or healthcare regulations could necessitate costly modifications. The firm fixed-price nature shifts much of the cost and schedule risk to the contractor, but the VA still faces risks related to quality and potential disputes.

What is the historical spending pattern for similar VA healthcare construction projects?

Historical spending patterns for VA healthcare construction projects reveal a consistent and substantial investment in facilities. The VA manages a vast portfolio of medical centers, clinics, and specialized care units, requiring ongoing capital investment. Projects like the construction of new nursing homes or major expansions are typically multi-million dollar endeavors. Spending fluctuates based on congressional appropriations, infrastructure needs assessments, and national priorities. Over the past decade, the VA has undertaken numerous large-scale construction and renovation projects, often exceeding hundreds of millions of dollars annually across the enterprise. This specific $50 million nursing home project aligns with the typical scale of significant new construction within the VA system, reflecting a sustained commitment to upgrading and expanding veteran healthcare infrastructure.

How does the competition level (2 bidders) impact the potential value for taxpayers?

A competition level with only two bidders, as indicated for this contract, presents a mixed picture for taxpayer value. On one hand, having at least two bidders ensures some level of price comparison and prevents a situation of sole-source procurement where costs could be significantly inflated. On the other hand, a more robust competition, typically involving three or more bidders, generally leads to more aggressive pricing strategies and a greater likelihood of securing the lowest possible market price. With only two bidders, there is a reduced incentive for each to drastically undercut the other, potentially resulting in a price that is higher than what might have been achieved in a more crowded field. Therefore, while taxpayers benefit from competition, the value realized might be less optimal compared to a contract awarded under more intense bidding conditions.

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: 101-07-0021FC

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Clark Enterprises, Inc. (UEI: 064862345)

Address: 4840 W UNIVERSITY, LAS VEGAS, NV, 90

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $49,906,276

Exercised Options: $49,906,276

Current Obligation: $49,906,276

Contract Characteristics

Cost or Pricing Data: YES

Timeline