VA awards $34.7M for Martinsburg data center construction, completed in 2016

Contract Overview

Contract Amount: $34,690,967 ($34.7M)

Contractor: Hitt Contracting, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2008-09-30

End Date: 2016-03-02

Contract Duration: 2,710 days

Daily Burn Rate: $12.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: CONSTRUCTION OF MARTINSBURG, WV DATA CENTER

Place of Performance

Location: BLUEFIELD, MERCER County, WEST VIRGINIA, 24701

State: West Virginia Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $34.7 million to HITT CONTRACTING, INC. for work described as: CONSTRUCTION OF MARTINSBURG, WV DATA CENTER Key points: 1. Contract value represents a significant investment in federal data infrastructure. 2. Competition dynamics suggest a potentially competitive bidding process for this project. 3. Project duration of 2710 days indicates a long-term construction undertaking. 4. Fixed-price contract type aims to control costs for the government. 5. The data center construction falls within the broader IT and construction sectors. 6. Geographic focus on West Virginia highlights regional infrastructure development.

Value Assessment

Rating: fair

The total award of $34.7 million for the construction of a data center is a substantial figure. Without specific benchmarks for data center construction costs in the Martinsburg area or comparable VA facilities, a precise value-for-money assessment is challenging. However, the duration of the contract (2710 days) suggests a complex and lengthy project, which can impact overall cost. The firm fixed-price nature of the contract provides cost certainty, but the final value should be compared against similar projects of equivalent scale and complexity.

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 bids. With six bidders participating, the level of competition appears healthy, which typically leads to more competitive pricing. This broad competition suggests the government likely received a range of proposals, allowing for selection of the best value.

Taxpayer Impact: A competitive bidding process for this construction project likely resulted in a more favorable price for taxpayers compared to a sole-source or limited competition award.

Public Impact

The primary beneficiary is the Department of Veterans Affairs, which gains enhanced data center capabilities. The project delivers critical infrastructure for storing and processing sensitive veteran data. The geographic impact is concentrated in Martinsburg, West Virginia, potentially creating local construction jobs. The construction services provided support the broader federal mission of serving veterans.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (2710 days) could indicate potential for cost overruns or scope creep if not managed effectively.
Lack of specific details on the data center's capacity or technological specifications makes it difficult to benchmark value.
The firm fixed-price contract, while offering cost certainty, might have led to higher initial bids to account for contractor risk.

Positive Signals

Awarded under full and open competition with six bidders, suggesting a robust and competitive process.
Firm fixed-price contract type provides cost control and predictability for the government.
The project addresses a critical infrastructure need for the Department of Veterans Affairs.

Sector Analysis

The construction of data centers is a significant undertaking within the commercial and institutional building construction sector, often intersecting with the IT infrastructure market. This contract represents a specific investment in federal data storage and processing capabilities. Comparable spending benchmarks would typically involve analyzing the cost per square foot or cost per megawatt of similar data center constructions, both federal and private, though such specific data is not provided here.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses in the provided data. This suggests that the primary contractor, HITT CONTRACTING, INC., likely handled the majority of the work, and the direct impact on the small business ecosystem for this specific contract may be limited unless they were utilized as subcontractors.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Veterans Affairs' contracting and program management offices. Accountability measures are inherent in the firm fixed-price contract structure, which penalizes deviations from agreed-upon costs. Transparency is generally facilitated through contract award databases, though detailed project progress and spending reports may not be publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Federal Data Center Consolidation Initiative
Department of Veterans Affairs IT Infrastructure Modernization
Government Building Construction Projects
Critical Infrastructure Investments

Risk Flags

Long project duration may indicate potential for cost escalation or scope creep if not meticulously managed.
Lack of detailed performance metrics makes it difficult to fully assess value for money.
Construction projects of this scale can be susceptible to unforeseen site conditions or regulatory changes.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $34.7 million to HITT CONTRACTING, INC.. CONSTRUCTION OF MARTINSBURG, WV DATA CENTER

Who is the contractor on this award?

The obligated recipient is HITT CONTRACTING, 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 $34.7 million.

What is the period of performance?

Start: 2008-09-30. End: 2016-03-02.

What was the specific purpose and capacity of the Martinsburg, WV data center constructed under this contract?

The provided data does not specify the exact purpose or capacity of the Martinsburg, WV data center. However, data centers are critical infrastructure for storing, processing, and managing vast amounts of digital information. For the Department of Veterans Affairs (VA), such a facility would likely support the secure housing of electronic health records (EHR), benefits claims data, and other sensitive veteran information. The capacity would be measured in terms of server racks, power, cooling, and network bandwidth, all designed to meet the VA's operational requirements and future growth projections. Without more detailed project documentation, the precise scale and intended use remain unspecified.

How does the cost per square foot or per unit of capacity for this data center compare to industry benchmarks?

A precise comparison of cost per square foot or per unit of capacity for this data center is not feasible with the provided data. The total award of $34.7 million is for the construction itself, but the square footage, power density, cooling infrastructure, and specific technological fit-out are not detailed. Industry benchmarks for data center construction vary widely based on location, Tier level (reliability), power usage effectiveness (PUE), and customization. Generally, data center construction is a high-cost endeavor due to specialized requirements for power, cooling, security, and redundancy. To perform a benchmark, one would need to know the total square footage, the power capacity (e.g., in megawatts or kW per rack), and the specific construction standards met by the facility.

What were the key performance indicators (KPIs) used to evaluate the success of this construction project?

The provided data does not explicitly list the Key Performance Indicators (KPIs) used to evaluate the success of this construction project. However, for a construction contract of this nature, typical KPIs would likely include adherence to the project schedule (though the long duration suggests flexibility or phased completion), compliance with building codes and safety standards, quality of workmanship, and final cost within the firm fixed-price agreement. For the VA, successful completion would also mean the facility met all operational requirements for security, power, cooling, and network connectivity, enabling the intended data processing and storage functions without disruption.

Were there any significant challenges or delays encountered during the construction of the data center, and how were they managed?

The provided data indicates a contract duration of 2710 days, which is approximately 7.4 years. This extended period suggests that the project likely encountered challenges or was planned with multiple phases. Common challenges in large construction projects include unforeseen site conditions, weather delays, supply chain disruptions, labor shortages, and changes in requirements. Without specific project reports or post-award contract modifications, it's impossible to detail the exact challenges faced. However, the firm fixed-price contract structure implies that the contractor bore the primary risk for cost overruns related to most delays, unless specific contract clauses allowed for adjustments due to government-caused delays or significant scope changes.

How does the VA's spending on data center construction compare to other federal agencies or previous investments?

The provided data focuses solely on this specific contract and does not offer comparative spending information across federal agencies or historical VA investments in data centers. To make such a comparison, one would need access to broader federal procurement data, such as the Federal Procurement Data System (FPDS) or agency-specific budget and spending reports. Analyzing this would involve looking at the total dollar amounts awarded for similar construction projects, the number of data centers built or upgraded, and the technological capabilities they represent across different administrations. This single contract of $34.7 million represents one component of the VA's overall IT infrastructure investment strategy.

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: VA-101-08-RP-0062

Offers Received: 6

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2704 DORR AVE, FAIRFAX, VA, 22031

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

Financial Breakdown

Contract Ceiling: $34,694,587

Exercised Options: $34,694,587

Current Obligation: $34,690,967

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Timeline