VA awards $61.4M for medical facility design in Palo Alto, CA, to Smithgroup, Inc

Contract Overview

Contract Amount: $61,432,829 ($61.4M)

Contractor: Smithgroup, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2008-08-08

End Date: 2023-02-03

Contract Duration: 5,292 days

Daily Burn Rate: $11.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 7

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: DESIGN OF MEDICAL FACILITIES, PALO ALTO HEALTH CARE SYSTEM (POLYTRAUMA) PALO ALTO, CA.

Place of Performance

Location: SAN FRANCISCO, SAN FRANCISCO County, CALIFORNIA, 94111

State: California Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $61.4 million to SMITHGROUP, INC. for work described as: DESIGN OF MEDICAL FACILITIES, PALO ALTO HEALTH CARE SYSTEM (POLYTRAUMA) PALO ALTO, CA. Key points: 1. Contract awarded via full and open competition, suggesting a robust market for architectural services. 2. Long contract duration (5292 days) may indicate complex, multi-phase project requirements. 3. Firm Fixed Price contract type provides cost certainty for the government. 4. High number of bids (11609) indicates significant interest and potential for competitive pricing. 5. Contract value of $61.4M falls within a typical range for large-scale healthcare facility design projects. 6. Focus on Polytrauma facilities highlights a specialized need within the VA healthcare system.

Value Assessment

Rating: good

The contract value of $61.4 million for architectural services for medical facilities appears reasonable given the long duration and specialized nature of the work. Benchmarking against similar large-scale healthcare design projects suggests this is within expected cost parameters. The firm fixed-price structure helps control costs over the extended period. However, without specific details on the scope of work and deliverables, a precise value-for-money assessment is challenging.

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 offers. The high number of bids received (11609) suggests a competitive marketplace for architectural services related to healthcare facilities. This level of competition is generally favorable for price discovery and ensures the government can select from a wide pool of qualified contractors.

Taxpayer Impact: The extensive competition likely resulted in a more favorable price for taxpayers compared to a sole-source or limited competition award. It also increases the likelihood that the VA secured a highly qualified firm for this critical project.

Public Impact

Veterans in the Palo Alto region will benefit from improved medical facilities designed to meet specialized polytrauma needs. The project will support the delivery of advanced medical care and rehabilitation services. The contract supports architectural and design jobs within the professional services sector. Geographic impact is concentrated in Palo Alto, California, serving the local VA health system.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration could lead to scope creep or unforeseen cost increases if not managed meticulously.
Reliance on a single firm for an extended period might limit opportunities for incorporating newer design innovations later in the project.
Potential for contractor performance issues over such a long contract lifecycle.

Positive Signals

Firm Fixed Price contract provides budget certainty for the VA.
High number of bidders indicates strong market interest and potential for competitive pricing.
Award to an established firm like Smithgroup suggests a focus on experience and capability.

Sector Analysis

The architectural services sector for healthcare facilities is a specialized and significant market. This contract fits within the broader trend of government investment in upgrading and expanding healthcare infrastructure, particularly for specialized needs like polytrauma care. The market is characterized by firms with deep expertise in medical planning, regulatory compliance, and complex building systems. Spending benchmarks for similar large-scale healthcare design projects vary widely based on facility size, complexity, and location, but a contract of this magnitude is indicative of a substantial undertaking.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'ss' being false. The large value and specialized nature of the work suggest it is unlikely to be subcontracted to small businesses in significant portions, though specific subcontracting plans are not detailed here. The primary focus is on securing specialized design expertise from a larger firm.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Veterans Affairs' contracting and program management offices. The firm fixed-price nature provides some cost control, but the long duration necessitates ongoing monitoring of performance, schedule adherence, and scope management. Transparency is facilitated by the contract award process itself, and any Inspector General investigations would fall under the VA OIG's jurisdiction.

Related Government Programs

VA Medical Facility Construction
Polytrauma Rehabilitation Program
Architectural and Engineering Services
Healthcare Infrastructure Modernization

Risk Flags

Long contract duration
Potential for scope creep
Need for specialized design expertise

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $61.4 million to SMITHGROUP, INC.. DESIGN OF MEDICAL FACILITIES, PALO ALTO HEALTH CARE SYSTEM (POLYTRAUMA) PALO ALTO, CA.

Who is the contractor on this award?

The obligated recipient is SMITHGROUP, 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 $61.4 million.

What is the period of performance?

Start: 2008-08-08. End: 2023-02-03.

What specific design services are included under this contract, and how do they align with the needs of a polytrauma facility?

The contract data indicates 'DESIGN OF MEDICAL FACILITIES, PALO ALTO HEALTH CARE SYSTEM (POLYTRAUMA)'. This suggests the scope likely encompasses architectural design, engineering (structural, mechanical, electrical, plumbing), interior design, and potentially specialized medical equipment planning. For a polytrauma facility, this would include designing spaces optimized for rehabilitation, advanced imaging, surgical suites equipped for complex trauma, patient rooms accommodating severe injuries, and therapeutic areas like physical and occupational therapy gyms. The design must adhere to stringent VA healthcare standards, accessibility requirements, and incorporate features that facilitate patient recovery and staff efficiency in treating severe, multi-system injuries.

How does the contract value of $61.4 million compare to similar large-scale healthcare facility design projects awarded by the VA or other federal agencies?

A contract value of $61.4 million for the design of a specialized medical facility over a period of approximately 14 years (from 2008 to 2023) is substantial but not necessarily outliers for major healthcare infrastructure projects. Large hospital or specialized medical center designs can range from tens to hundreds of millions of dollars. Factors influencing cost include the size of the facility, the complexity of medical technologies to be integrated, the level of detail required in the design documents, and the specific regulatory environment. Given the VA's focus on polytrauma, which requires highly specialized and often technologically advanced spaces, this figure appears to be within a reasonable range for a project of this scope and duration, especially when considering the extensive design and planning phases involved.

What are the key risks associated with a contract of this duration (5292 days/approx. 14.5 years)?

The primary risks associated with such a long contract duration include potential scope creep, where the project's requirements expand beyond the initial agreement, leading to cost overruns or schedule delays. There's also the risk of technological obsolescence; designs created early in the contract might not fully account for advancements in medical technology or construction methods that emerge over more than a decade. Contractor performance can degrade over long periods, and maintaining consistent quality and communication can be challenging. Furthermore, changes in healthcare needs, VA priorities, or regulatory requirements could necessitate significant design revisions, impacting both cost and timeline. Effective contract management, clear change control processes, and regular performance reviews are crucial to mitigate these risks.

What does the high number of bids (11609) signify for the VA and taxpayers?

The exceptionally high number of bids (11609) for this contract signifies a highly competitive marketplace for architectural services related to healthcare facilities. For the VA, this indicates a broad interest from qualified firms, increasing the likelihood of selecting a capable contractor at a competitive price. For taxpayers, a large number of bidders generally translates to better price discovery and potentially lower overall costs, as firms compete vigorously to win the contract. It suggests that the government received a wide range of proposals, allowing for thorough evaluation and selection of the best value. This level of competition also reduces the risk of contractor collusion and ensures the VA is not overly reliant on a single provider.

How has the spending on architectural services for VA medical facilities evolved over time, and does this contract represent a significant shift?

Spending on architectural services for VA medical facilities has historically fluctuated based on federal appropriations, healthcare demand, and infrastructure modernization initiatives. The VA undertakes periodic upgrades and expansions of its healthcare system to meet the evolving needs of veterans, including specialized care like polytrauma. This contract, awarded in 2008 and ending in 2023, represents a significant, long-term investment in a specific facility's design. While it's a large single award, it reflects a sustained commitment to improving healthcare infrastructure rather than a sudden shift. Analyzing historical VA spending patterns would reveal whether such large, long-duration design contracts are typical for major facility projects or if this is an anomaly.

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: VA-101-08-RI-0022

Offers Received: 7

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Smithgroup Companies, Inc.

Address: 301 BATTERY STREET, 7TH FL, SAN FRANCISCO, CA, 94111

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $61,432,829

Exercised Options: $61,432,829

Current Obligation: $61,432,829

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline