VA's Denver Replacement Medical Center Facility contract awarded to Kiewit-Turner JV for $678.5M

Contract Overview

Contract Amount: $678,462,349 ($678.5M)

Contractor: Kiewit-Turner a Joint Venture

Awarding Agency: Department of Veterans Affairs

Start Date: 2010-08-31

End Date: 2014-12-09

Contract Duration: 1,561 days

Daily Burn Rate: $434.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIXED PRICE INCENTIVE

Sector: Construction

Official Description: DENVER REPLACEMENT MEDICAL CENTER FACILITY, AURORA, CO

Place of Performance

Location: AURORA, ADAMS County, COLORADO, 80045

State: Colorado Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $678.5 million to KIEWIT-TURNER A JOINT VENTURE for work described as: DENVER REPLACEMENT MEDICAL CENTER FACILITY, AURORA, CO Key points: 1. Contract value of $678.5M for a major medical facility. 2. Awarded via full and open competition, indicating broad market engagement. 3. Fixed Price Incentive contract type suggests shared risk for cost overruns. 4. Construction sector project with significant taxpayer investment.

Value Assessment

Rating: good

The contract value of $678.5M is substantial for a medical center construction project. Benchmarking against similar large-scale federal construction projects would provide further context on its pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded through full and open competition, allowing all responsible sources to submit bids. This method generally promotes competitive pricing and ensures the government receives the best value.

Taxpayer Impact: The significant investment of $678.5M represents a substantial allocation of taxpayer funds for critical infrastructure.

Public Impact

Provides essential healthcare infrastructure for veterans in the Denver area. Supports numerous jobs in the construction sector and related industries. Represents a long-term investment in veteran healthcare services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns due to fixed-price incentive structure.
Complexity of large-scale medical facility construction can lead to unforeseen issues.

Positive Signals

Awarded through full and open competition, maximizing potential for value.
Addresses a critical need for veteran healthcare facilities.

Sector Analysis

This project falls within the Commercial and Institutional Building Construction sector, a significant area of federal spending. Benchmarks for similar large-scale medical facility construction projects would be relevant for assessing cost-effectiveness.

Small Business Impact

While awarded through full and open competition, the prime contractor is a joint venture, Kiewit-Turner. Further analysis would be needed to determine the extent of small business subcontracting participation.

Oversight & Accountability

The Department of Veterans Affairs is responsible for overseeing this contract. Robust oversight is crucial to ensure project completion, quality, and adherence to budget, especially given the contract type.

Related Government Programs

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

Risk Flags

Potential for cost overruns due to FPI contract type.
Complexity of medical facility construction.
Long duration of the project (1561 days).
Lack of detailed risk assessment in provided data.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $678.5 million to KIEWIT-TURNER A JOINT VENTURE. DENVER REPLACEMENT MEDICAL CENTER FACILITY, AURORA, CO

Who is the contractor on this award?

The obligated recipient is KIEWIT-TURNER 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 $678.5 million.

What is the period of performance?

Start: 2010-08-31. End: 2014-12-09.

What was the final cost compared to the initial target cost, and how did the incentive structure impact the final price?

The final cost relative to the target cost and the specific impact of the incentive structure are not detailed in the provided data. A Fixed Price Incentive (FPI) contract aims to share cost savings or overruns between the government and the contractor. Analyzing the final award amount against the initial target cost and understanding the negotiated incentive clauses would reveal the effectiveness of this pricing strategy in controlling expenditures.

What were the primary risks identified during the bidding process, and how were they mitigated in the contract?

The provided data does not detail specific risks identified during the bidding process. However, for a large construction project like a medical center, common risks include design complexities, site conditions, material availability, and labor shortages. The Fixed Price Incentive (FPI) contract structure itself suggests an attempt to mitigate cost overrun risks by sharing them. Further documentation would be needed to assess specific risk mitigation strategies.

How effectively did the full and open competition process ensure the best value for the government and taxpayers?

Full and open competition is designed to maximize the number of bidders, thereby fostering a competitive environment that typically leads to better pricing and value. The award to Kiewit-Turner Joint Venture suggests that their proposal met the government's requirements and offered competitive terms. Evaluating the number of bids received and the final negotiated price against independent cost estimates would provide a clearer picture of the value achieved.

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: 5

Pricing Type: FIXED PRICE INCENTIVE (L)

Evaluated Preference: NONE

Contractor Details

Address: 7200 S ALTON WAY STE A300, ENGLEWOOD, CO, 80112

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

Financial Breakdown

Contract Ceiling: $1,896,785,751

Exercised Options: $1,282,985,798

Current Obligation: $678,462,349

Subaward Activity

Number of Subawards: 517

Total Subaward Amount: $4,871,516,158

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline