VA's $1.06B New Orleans Medical Center Contract Awarded to Clark McCarthy Healthcare Partners

Contract Overview

Contract Amount: $1,055,767,844 ($1.1B)

Contractor: Clark Mccarthy Healthcare Partners, a Joint Venture

Awarding Agency: Department of Veterans Affairs

Start Date: 2009-09-30

End Date: 2018-06-30

Contract Duration: 3,195 days

Daily Burn Rate: $330.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIXED PRICE INCENTIVE

Sector: Construction

Official Description: SOUTHEAST LOUISIANA VETERANS HEALTHCARE SYSTEM REPLACEMENT MEDICAL CENTER, NEW ORLEANS, LA

Place of Performance

Location: NEW ORLEANS, ORLEANS County, LOUISIANA, 70112

State: Louisiana Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $1.06 billion to CLARK MCCARTHY HEALTHCARE PARTNERS, A JOINT VENTURE for work described as: SOUTHEAST LOUISIANA VETERANS HEALTHCARE SYSTEM REPLACEMENT MEDICAL CENTER, NEW ORLEANS, LA Key points: 1. The contract awarded to Clark McCarthy Healthcare Partners represents a significant investment in veteran healthcare infrastructure. 2. Full and open competition was utilized, suggesting a robust price discovery process. 3. The project's fixed-price incentive structure aims to balance cost control with performance. 4. Construction of large-scale healthcare facilities is a complex sector with inherent risks.

Value Assessment

Rating: fair

The contract value of $1.06 billion is substantial for a healthcare facility. Benchmarking against similar large-scale medical construction projects is difficult without more granular cost data, but the scale suggests significant resource allocation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The use of full and open competition indicates that multiple bidders likely participated, fostering a competitive environment that should have driven pricing towards market rates. The definitive contract type suggests a clear scope was established.

Taxpayer Impact: Taxpayers are funding a critical infrastructure project for veteran care. The fixed-price incentive contract aims to ensure value for money by incentivizing contractor performance while managing costs.

Public Impact

Improved access to healthcare services for veterans in the Southeast Louisiana region. Potential for job creation during the construction phase and ongoing operational employment. Modernization of medical facilities to enhance patient care and treatment capabilities. Long-term asset for the Department of Veterans Affairs and the community.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns in large-scale construction projects.
Delays in project completion impacting service delivery.
Complexity of integrating new medical technologies and systems.

Positive Signals

Addresses critical need for updated veteran healthcare facilities.
Utilizes competitive bidding to ensure fair pricing.
Long-term investment in veteran well-being.

Sector Analysis

The construction sector, particularly for large institutional buildings like hospitals, is prone to significant cost fluctuations and schedule challenges. Benchmarks for similar projects are highly variable based on location, complexity, and specific requirements.

Small Business Impact

While the prime contractor is a joint venture, the contract details do not specify the extent of small business subcontracting. Large construction projects often involve numerous subcontractors, presenting opportunities for small businesses if actively pursued.

Oversight & Accountability

The Department of Veterans Affairs is responsible for overseeing this major construction project. Robust oversight is crucial to manage the budget, schedule, and quality of the replacement medical center to ensure accountability.

Related Government Programs

Commercial and Institutional Building Construction
Department of Veterans Affairs Contracting
Department of Veterans Affairs Programs

Risk Flags

Large contract value increases financial risk.
Construction projects are susceptible to delays.
Complexity of healthcare facility construction.
Potential for scope creep impacting budget.
Dependence on contractor performance.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $1.06 billion to CLARK MCCARTHY HEALTHCARE PARTNERS, A JOINT VENTURE. SOUTHEAST LOUISIANA VETERANS HEALTHCARE SYSTEM REPLACEMENT MEDICAL CENTER, NEW ORLEANS, LA

Who is the contractor on this award?

The obligated recipient is CLARK MCCARTHY HEALTHCARE PARTNERS, A JOINT VENTURE.

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 $1.06 billion.

What is the period of performance?

Start: 2009-09-30. End: 2018-06-30.

What specific performance metrics are tied to the incentive portion of the fixed-price incentive contract, and how are they measured?

The fixed-price incentive contract structure implies that both the contractor and the VA share in any cost savings or overruns relative to target costs. Specific performance metrics would likely relate to project milestones, quality standards, and adherence to schedule. Detailed documentation of these metrics and their measurement protocols is essential for effective oversight and to ensure the government receives the best value.

How does the VA plan to mitigate risks associated with construction delays and potential cost overruns on a project of this magnitude?

Mitigation strategies typically include rigorous project management, detailed scheduling with buffer times, regular site inspections, and proactive risk assessment. The VA likely employs a dedicated project management team and may utilize contingency funds. Clear communication channels with the contractor and prompt resolution of issues are also critical to keeping the project on track and within budget.

What is the projected impact of this new medical center on the VA's overall healthcare delivery efficiency and veteran patient outcomes?

The replacement medical center is expected to significantly enhance the VA's healthcare delivery by providing state-of-the-art facilities and potentially expanding service capacity. This modernization should lead to improved patient care, reduced wait times, and better health outcomes for veterans. The integration of advanced medical technology and improved workflow designs are key factors contributing to this projected impact.

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-101-09-RP-0123

Offers Received: 3

Pricing Type: FIXED PRICE INCENTIVE (L)

Evaluated Preference: NONE

Contractor Details

Address: 2502 N ROCKY POINT DR, TAMPA, FL, 33607

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

Financial Breakdown

Contract Ceiling: $1,057,219,499

Exercised Options: $1,055,829,100

Current Obligation: $1,055,767,844

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Timeline