VA awards $82.6M for Cleveland medical center expansion, completed in 2010

Contract Overview

Contract Amount: $82,614,523 ($82.6M)

Contractor: Walsh Demaria Joint Venture IV

Awarding Agency: Department of Veterans Affairs

Start Date: 2007-09-27

End Date: 2010-03-26

Contract Duration: 911 days

Daily Burn Rate: $90.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: CONSTRUCTION OF A NEW 258,080 GSF CARES BED TOWER ADDITION AT THE LOUIS STOKES VA MEDICAL CENTER, CLEVELAND, OH.

Place of Performance

Location: CLEVELAND, CUYAHOGA County, OHIO, 44106

State: Ohio Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $82.6 million to WALSH DEMARIA JOINT VENTURE IV for work described as: CONSTRUCTION OF A NEW 258,080 GSF CARES BED TOWER ADDITION AT THE LOUIS STOKES VA MEDICAL CENTER, CLEVELAND, OH. Key points: 1. Contract awarded for construction of a new medical tower addition. 2. Project aimed to expand capacity at the Louis Stokes VA Medical Center. 3. The contract was awarded under full and open competition. 4. The project duration was 911 days. 5. The contract type was Firm Fixed Price, indicating defined costs. 6. The awarded amount was approximately $82.6 million.

Value Assessment

Rating: good

The contract value of $82.6 million for a 258,080 GSF addition appears reasonable for a healthcare facility construction project of this scale. Benchmarking against similar VA medical center expansions or large-scale institutional construction projects would provide a more precise value-for-money assessment. The firm fixed price structure suggests that cost risks were largely borne by the contractor, which can be beneficial for the government if managed effectively. However, without detailed cost breakdowns or comparisons to industry standards for construction per square foot in that region and time period, a definitive value assessment is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of 3 bidders suggests a moderate level of competition for this significant construction project. A higher number of bidders typically leads to more competitive pricing and a wider range of innovative solutions. However, the fact that it was competed openly is a positive sign for price discovery and ensuring the government receives fair market value.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that drives down prices and encourages efficiency. The presence of multiple bidders suggests that the government had options, potentially leading to a more cost-effective outcome compared to a sole-source or limited competition scenario.

Public Impact

Veterans in the Cleveland area will benefit from expanded medical services and capacity. The project delivered a new 258,080 GSF CARES Bed Tower Addition. The geographic impact is concentrated in Cleveland, Ohio. The construction project likely supported local jobs in the construction sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen construction challenges arose, though mitigated by FFP.
Delays in construction could impact the timely delivery of expanded medical services.
Ensuring quality of construction to meet VA medical facility standards is critical.

Positive Signals

Awarded under full and open competition, suggesting a competitive bidding process.
Firm Fixed Price contract type helps control costs for the government.
Project completion within the specified duration (911 days) indicates effective project management.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector. The construction of large-scale medical facilities is a specialized segment within this industry, requiring adherence to stringent building codes, healthcare regulations, and specific functional requirements. The market for such projects is often characterized by a mix of large general contractors and specialized subcontractors. The spending of $82.6 million on this single project is significant and reflects the substantial investment required for modern healthcare infrastructure.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract, nor does it detail subcontracting plans. As a large-scale construction project awarded through full and open competition, it's possible that large prime contractors were involved. Further analysis would be needed to determine if small businesses participated as subcontractors or if there were specific goals for their involvement. The absence of explicit set-aside information suggests it may not have been a primary focus for this particular award.

Oversight & Accountability

Oversight for this construction project would typically be managed by the Department of Veterans Affairs' contracting officers and project managers. They are responsible for ensuring the contractor adheres to the contract terms, specifications, and schedule. Quality assurance personnel would likely monitor construction progress and compliance. Inspector General oversight may be involved if any allegations of fraud, waste, or abuse arise during or after the contract period. Transparency is generally maintained through contract award databases and public reporting mechanisms.

Related Government Programs

VA Medical Facility Construction
Healthcare Infrastructure Projects
Large-Scale Building Construction
Federal Capital Investments

Risk Flags

Potential for cost overruns if unforeseen site conditions were encountered.
Risk of construction delays impacting service availability.
Ensuring compliance with stringent healthcare facility building codes.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $82.6 million to WALSH DEMARIA JOINT VENTURE IV. CONSTRUCTION OF A NEW 258,080 GSF CARES BED TOWER ADDITION AT THE LOUIS STOKES VA MEDICAL CENTER, CLEVELAND, OH.

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 $82.6 million.

What is the period of performance?

Start: 2007-09-27. End: 2010-03-26.

What was the contractor's track record with the VA prior to this award?

Information regarding the specific track record of Walsh Demaria Joint Venture IV with the Department of Veterans Affairs prior to the award of this $82.6 million contract is not detailed in the provided data. Generally, federal agencies assess past performance as part of the source selection process. This involves reviewing previous contracts, performance evaluations (like Contractor Performance Assessment Reporting System - CPARS), and any history of disputes or litigation. A joint venture's track record would likely be a composite of its individual members' experiences. Without access to the specific past performance reviews for Walsh Demaria Joint Venture IV, it's difficult to definitively assess their prior standing with the VA for similar projects.

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

The contract value was $82,614,523 for 258,080 GSF, resulting in a cost of approximately $320 per square foot. Benchmarking this figure requires comparing it to similar VA medical center construction projects completed around the same time (2007-2010) and in similar geographic regions. Factors like specialized medical equipment integration, seismic requirements, and specific finish levels can significantly influence per-square-foot costs in healthcare construction. Generally, costs for institutional and healthcare facilities tend to be higher than standard commercial buildings due to these complexities. A detailed comparison would involve analyzing data from other VA capital projects or large hospital constructions from that era to determine if $320/GSF was within the expected range or indicated potential over/underpricing.

What were the primary risks identified for this construction project, and how were they managed?

Primary risks for a large-scale construction project like this typically include unforeseen site conditions (e.g., soil issues, hazardous materials), weather delays, labor shortages, material price fluctuations, and design errors or omissions. Given the Firm Fixed Price (FFP) contract type, the contractor, Walsh Demaria Joint Venture IV, bore the primary financial risk for cost overruns. The VA's management of these risks would involve thorough site investigations prior to award, robust contract language addressing unforeseen conditions and change orders, and diligent project oversight to monitor progress and quality. The 911-day duration suggests a planned timeline to mitigate weather impacts. The VA's role would be to ensure the contractor's risk mitigation plans were adequate and to manage risks that fall under the government's purview, such as timely decisions and access to the site.

What was the overall effectiveness of this expansion in meeting the VA's capacity needs?

The effectiveness of the 258,080 GSF CARES Bed Tower Addition in meeting the VA's capacity needs at the Louis Stokes VA Medical Center can only be assessed post-completion and operation. The project's goal was to expand capacity, implying a need for more beds or specialized treatment areas. To evaluate effectiveness, one would need data on patient wait times, bed occupancy rates, and the utilization of new services before and after the expansion. If the expansion successfully alleviated overcrowding, reduced wait times, and allowed for the provision of new or enhanced medical services, it would be considered effective. Without operational data, the effectiveness remains an assumption based on the project's stated objectives.

How has VA spending on construction projects of this magnitude trended over the last decade?

The provided data is for a single project completed in 2010. To analyze VA spending trends on construction projects of this magnitude over the last decade, one would need access to a broader dataset encompassing multiple capital construction awards. Generally, federal spending on infrastructure, including healthcare facilities, can fluctuate based on congressional appropriations, national priorities (like the CARES Act funding potentially influencing this project), and the aging state of existing infrastructure. The VA has historically had significant capital needs for modernization and expansion. Analyzing trends would involve looking at the number and total dollar value of large construction contracts awarded annually by the VA, identifying any patterns related to economic conditions, healthcare demand, or specific legislative initiatives.

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

Address: 929 WEST ADAMS STREET, CHICAGO, IL, 90

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $82,614,523

Exercised Options: $82,614,523

Current Obligation: $82,614,523

Contract Characteristics

Cost or Pricing Data: NO

Timeline