VA awards $33.7M contract for new 120-bed nursing home in Washington state

Contract Overview

Contract Amount: $33,663,887 ($33.7M)

Contractor: PCL Construction Services Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2008-08-01

End Date: 2011-06-30

Contract Duration: 1,063 days

Daily Burn Rate: $31.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: CONSTRUCT A NEW 120-BED NURSING HOME.

Place of Performance

Location: TACOMA, PIERCE County, WASHINGTON, 98493

State: Washington Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $33.7 million to PCL CONSTRUCTION SERVICES INC for work described as: CONSTRUCT A NEW 120-BED NURSING HOME. Key points: 1. Contract awarded via full and open competition, suggesting a robust bidding process. 2. The project aims to enhance healthcare infrastructure for veterans. 3. Fixed-price contract type may offer cost certainty but could limit flexibility. 4. The duration of 1063 days indicates a significant construction undertaking. 5. The contractor, PCL Construction Services Inc., has a substantial presence in the construction sector.

Value Assessment

Rating: good

The contract value of $33.7 million for a 120-bed nursing home appears within a reasonable range for such a facility, considering construction costs and the scope of services. Benchmarking against similar healthcare construction projects would provide a more precise value-for-money assessment. The firm fixed-price structure suggests the government sought cost predictability, which is generally positive for taxpayer investment.

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 a bid. With three bids received, the competition level suggests a healthy market response for this type of construction project. This level of competition is generally favorable for price discovery and achieving a competitive market price.

Taxpayer Impact: The full and open competition process likely resulted in a more competitive bid, potentially saving taxpayer dollars compared to a less competitive procurement.

Public Impact

Veterans in Washington state will benefit from improved access to long-term care facilities. The project will deliver a new 120-bed nursing home, enhancing healthcare capacity. The construction will likely create numerous jobs in the local Washington workforce. The facility will serve as a critical piece of healthcare infrastructure for the Department of Veterans Affairs.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen construction challenges arise, despite fixed-price contract.
Delays in construction could impact the timely delivery of essential veteran healthcare services.
Ensuring the quality of construction meets the specific needs of a healthcare facility is paramount.

Positive Signals

Award to an experienced contractor like PCL Construction Services Inc. suggests a lower risk of execution issues.
The firm fixed-price contract provides budget certainty for the Department of Veterans Affairs.
The project addresses a clear need for enhanced veteran healthcare infrastructure.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a significant segment of the broader construction industry. The market for healthcare facility construction is driven by demand for new facilities, upgrades, and expansions, often influenced by government funding and demographic trends. The value of this contract is substantial for a single project within this specialized niche.

Small Business Impact

The contract was awarded under full and open competition and does not indicate any specific small business set-aside provisions. While the prime contractor is PCL Construction Services Inc., a large entity, there may be opportunities for small businesses to participate as subcontractors. Further analysis would be needed to determine the extent of small business subcontracting planned for this project.

Oversight & Accountability

The Department of Veterans Affairs is responsible for overseeing this construction project. Oversight mechanisms would typically include regular site inspections, progress reviews, and adherence to contract milestones. Transparency is generally maintained through contract award databases and public reporting, though specific day-to-day oversight details are internal.

Related Government Programs

VA Medical Centers
Veterans Health Administration Facilities
Healthcare Infrastructure Projects
Government Construction Contracts

Risk Flags

Potential for cost increases due to change orders
Risk of construction delays impacting service delivery
Ensuring adherence to healthcare facility construction standards

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $33.7 million to PCL CONSTRUCTION SERVICES INC. CONSTRUCT A NEW 120-BED NURSING HOME.

Who is the contractor on this award?

The obligated recipient is PCL CONSTRUCTION SERVICES INC.

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 $33.7 million.

What is the period of performance?

Start: 2008-08-01. End: 2011-06-30.

What is the track record of PCL Construction Services Inc. on similar government healthcare construction projects?

PCL Construction Services Inc. has a significant track record in constructing large-scale facilities, including healthcare and institutional buildings. Their experience with government contracts, particularly for agencies like the Department of Veterans Affairs, suggests familiarity with federal procurement regulations and construction standards. A review of their past performance on similar projects would likely reveal a history of successful project completion, though specific details on cost performance and adherence to schedule on prior VA nursing home projects would require deeper investigation into contract performance reports and historical data.

How does the per-bed construction cost of this project compare to national averages for similar facilities?

The total contract value is $33,663,887 for a 120-bed facility, equating to approximately $280,532 per bed. National averages for constructing new nursing homes can vary widely based on location, quality of finishes, and specific amenities, but often range from $200,000 to $500,000 per bed. This project's per-bed cost appears to be within the lower to mid-range of this spectrum, suggesting potentially good value, assuming the specifications and location are not exceptionally low-cost drivers. However, a precise comparison requires detailed cost breakdowns and consideration of regional construction market conditions.

What are the primary risks associated with this firm fixed-price construction contract for the VA?

The primary risk for the VA with a firm fixed-price contract is that the contractor may seek change orders or claims if unforeseen issues arise during construction, potentially increasing the total cost beyond the initial $33.7 million. While the price is fixed, scope creep or unexpected site conditions (e.g., environmental issues, subsurface problems) can lead to disputes and additional expenditures. Another risk is that the contractor might cut corners on quality to maintain profitability if facing cost pressures, necessitating robust government oversight to ensure standards are met. The long duration also increases the risk of material price fluctuations impacting the contractor's margins, potentially leading to claims.

What is the historical spending pattern of the Department of Veterans Affairs on nursing home construction?

The Department of Veterans Affairs has a consistent history of investing in healthcare infrastructure, including nursing homes and long-term care facilities, to meet the needs of the veteran population. Historical spending patterns show significant annual outlays for construction and renovation projects aimed at modernizing existing facilities and building new ones. This specific contract for a 120-bed facility in Washington is part of a broader, ongoing effort by the VA to expand and improve its healthcare network nationwide. Analyzing past VA construction budgets and awarded contracts for similar facilities would reveal trends in project scale, cost per bed, and geographic distribution of investments.

How does the competition level (3 bidders) impact the final price and value for taxpayers?

A competition involving three bidders is generally considered moderate to good, providing a reasonable level of price discovery. With three bids, there is likely enough competition to drive the price down from what might be offered in a sole-source or limited competition scenario. However, it may not be as intensely competitive as a situation with five or more bidders, where the pressure to offer the lowest possible price is often greater. For taxpayers, this level of competition suggests a fair market price was likely achieved, balancing the need for multiple bids with the practicalities of finding qualified contractors for specialized projects like healthcare construction.

What are the potential workforce implications of this $33.7 million construction project?

A construction project of this magnitude, valued at $33.7 million and spanning over 1000 days, will have significant positive workforce implications for the local economy in Washington state. It is expected to create numerous direct jobs for skilled tradespeople (carpenters, electricians, plumbers, masons, etc.), general laborers, project managers, and administrative staff. Indirect job creation is also likely in supporting industries such as material suppliers, equipment rental companies, and transportation services. The project duration suggests sustained employment opportunities over several years, contributing to local economic activity and potentially attracting skilled labor to the region.

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

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: PCL U.S. Holdings Inc (UEI: 245222591)

Address: 15405 SE 37TH ST STE 200, BELLEVUE, WA, 90

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

Financial Breakdown

Contract Ceiling: $33,663,887

Exercised Options: $33,663,887

Current Obligation: $33,663,887

Timeline