VA awards $25.2M design-build contract for outpatient facility, Walsh Construction Company selected

Contract Overview

Contract Amount: $25,244,590 ($25.2M)

Contractor: Walsh Construction Company

Awarding Agency: Department of Veterans Affairs

Start Date: 2010-09-30

End Date: 2015-12-31

Contract Duration: 1,918 days

Daily Burn Rate: $13.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 12

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: DESIGN-BUILD MULTISPECIALTY OUTPATIENT, JONATHAN M. WAINWRIGHT MEMORIAL VA MEDICAL CENTER, WALLA WALLA, WA

Place of Performance

Location: WALLA WALLA, WALLA WALLA County, WASHINGTON, 99362

State: Washington Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $25.2 million to WALSH CONSTRUCTION COMPANY for work described as: DESIGN-BUILD MULTISPECIALTY OUTPATIENT, JONATHAN M. WAINWRIGHT MEMORIAL VA MEDICAL CENTER, WALLA WALLA, WA Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract type is a firm fixed price, which shifts cost risk to the contractor. 3. The project duration of 1918 days indicates a significant, long-term construction undertaking. 4. The award was made by the Department of Veterans Affairs, aligning with its mission to serve veterans. 5. The North American Industry Classification System (NAICS) code 236220 points to commercial and institutional building construction. 6. The contract was awarded to Walsh Construction Company, a known entity in the construction sector.

Value Assessment

Rating: fair

Benchmarking the value of this specific contract is challenging without comparable design-build outpatient facility projects from the same period and region. The total award amount of $25.2 million for a multispecialty outpatient facility suggests a substantial investment in healthcare infrastructure. However, without detailed cost breakdowns or comparisons to similar projects' per-square-foot costs or specific service delivery costs, a definitive value-for-money assessment is difficult. The firm fixed-price nature of the contract implies that the contractor is responsible for cost overruns, which can be a positive indicator for the government if the initial bid was competitive.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'full and open competition,' indicating that all eligible responsible sources were permitted to submit a bid. The presence of 12 bids suggests a healthy level of interest and competition for this project. A higher number of bidders generally leads to more competitive pricing and a wider range of technical solutions, benefiting the government by potentially securing a better value proposition.

Taxpayer Impact: The robust competition for this contract likely resulted in a more favorable price for taxpayers compared to a sole-source or limited competition scenario. It ensures that taxpayer funds are utilized efficiently by driving down costs through market forces.

Public Impact

Veterans in the Walla Walla, WA region will benefit from improved access to multispecialty outpatient healthcare services. The project will deliver a new or significantly upgraded outpatient medical facility, enhancing the capacity and quality of care. The geographic impact is localized to Walla Walla, Washington, and surrounding areas served by the Jonathan M. Wainwright Memorial VA Medical Center. The construction phase will likely create numerous jobs in the local and regional workforce, including skilled trades and support staff. Upon completion, the facility will support healthcare professionals, leading to sustained employment opportunities within the VA system.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for construction delays impacting service delivery timelines.
Risk of cost overruns if unforeseen site conditions or design challenges arise, despite fixed-price contract.
Ensuring the final facility meets all specified functional and technological requirements for modern healthcare delivery.

Positive Signals

Awarded through full and open competition, indicating a competitive bidding process.
Firm fixed-price contract shifts cost risk to the contractor.
Significant investment in healthcare infrastructure for veterans.
Long project duration allows for thorough planning and execution.

Sector Analysis

The construction sector, specifically commercial and institutional building construction (NAICS 236220), is a significant part of the U.S. economy. This contract falls within the government's broader spending on healthcare infrastructure, which often involves large-scale design-build projects. Comparable spending benchmarks would typically involve analyzing other VA medical facility construction projects or similar large public healthcare building endeavors, considering factors like square footage, complexity, and location.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false) and there is no explicit mention of subcontracting plans for small businesses. This suggests that the primary award went to a large contractor, Walsh Construction Company. While large prime contracts can sometimes lead to subcontracting opportunities for small businesses, the absence of specific set-aside provisions or reporting on subcontracting goals means the direct impact on the small business ecosystem for this specific award is not detailed here. Further investigation into subcontracting reports would be needed to assess the actual flow-down to small businesses.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Veterans Affairs' contracting and project management offices. Accountability measures are typically embedded in the contract terms, including performance milestones, quality control requirements, and payment schedules tied to progress. Transparency is generally facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse related to the contract were suspected or reported.

Related Government Programs

VA Medical Facility Construction
Design-Build Contracts
Outpatient Healthcare Facilities
Federal Construction Projects
Department of Veterans Affairs Procurement

Risk Flags

Potential for cost overruns despite fixed-price contract if unforeseen issues arise.
Risk of construction delays impacting operational readiness.
Ensuring the facility meets evolving healthcare technology and patient care standards.
Adequacy of competition level to ensure optimal value for taxpayer funds.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $25.2 million to WALSH CONSTRUCTION COMPANY. DESIGN-BUILD MULTISPECIALTY OUTPATIENT, JONATHAN M. WAINWRIGHT MEMORIAL VA MEDICAL CENTER, WALLA WALLA, WA

Who is the contractor on this award?

The obligated recipient is WALSH CONSTRUCTION COMPANY.

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 $25.2 million.

What is the period of performance?

Start: 2010-09-30. End: 2015-12-31.

What is the track record of Walsh Construction Company with the Department of Veterans Affairs?

Walsh Construction Company has a history of working with the Department of Veterans Affairs on various projects. While this specific contract is for a design-build multispecialty outpatient facility, Walsh has likely been involved in other construction endeavors for the VA. To fully assess their track record, one would need to examine past performance evaluations, any history of contract disputes or claims, and the successful completion of previous VA projects. A review of their portfolio with the VA would reveal their experience with similar healthcare facilities, adherence to schedules and budgets, and overall quality of work. This information is crucial for understanding their reliability and capability in executing large-scale government contracts.

How does the $25.2 million award compare to similar VA outpatient facility projects in terms of cost per square foot or per bed?

Directly comparing the $25.2 million award to similar VA outpatient facility projects requires access to detailed project specifications, including the final square footage, the scope of services offered, and the number of beds or patient visit capacities. Without these specifics, a precise cost-per-unit benchmark is not feasible. However, the total award indicates a significant investment. Generally, the cost per square foot for healthcare facilities can range widely based on complexity, technology integration, and regional labor costs. For large-scale projects, the VA aims for competitive pricing through robust procurement processes. A thorough analysis would involve gathering data on comparable projects awarded around the same time frame and in similar geographic regions to establish a relevant cost benchmark and assess if this contract represents good value.

What are the primary risks associated with a firm fixed-price design-build contract of this magnitude?

A firm fixed-price (FFP) design-build contract of this magnitude, valued at $25.2 million, carries several inherent risks. For the government, the primary risk is that the contractor may cut corners on quality or scope to maximize profit if the initial bid was too low or if unforeseen issues arise. While the FFP shifts cost overrun risk to the contractor, significant contractor failure could lead to delays and the need for contract termination and re-procurement, which would be costly and time-consuming. For the contractor, the risk lies in accurately estimating all costs associated with design, materials, labor, and potential unforeseen conditions over the project's duration. Inadequate risk assessment by the contractor could lead to financial losses or bankruptcy. Effective oversight and clear contract terms are crucial to mitigate these risks.

What is the expected impact of this facility on veteran healthcare access in the Walla Walla region?

This design-build contract for a multispecialty outpatient facility is expected to significantly enhance veteran healthcare access in the Walla Walla, Washington region. By providing a dedicated, modern facility, it aims to consolidate and expand the range of outpatient services available to local veterans. This could lead to reduced travel times, shorter wait times for appointments, and improved continuity of care through integrated services. The increased capacity and potentially advanced medical capabilities of the new facility are designed to meet the growing healthcare needs of the veteran population in the area, ultimately contributing to better health outcomes and satisfaction.

How has VA spending on construction and facilities evolved over the past decade, and where does this contract fit?

VA spending on construction and facilities has generally seen fluctuations over the past decade, influenced by budget allocations, infrastructure needs assessments, and legislative priorities. The VA consistently requires significant investment to maintain, modernize, and expand its healthcare network, which includes hospitals, clinics, and outpatient centers. This $25.2 million contract for a multispecialty outpatient facility represents a specific investment within that broader category. It aligns with the VA's ongoing efforts to upgrade its infrastructure and improve the delivery of care to veterans. Analyzing historical VA construction spending trends would reveal patterns in project types, funding levels, and geographic distribution, contextualizing this particular award within the larger fiscal landscape.

What are the potential workforce implications, both during construction and for ongoing operations?

The workforce implications of this contract are twofold. During the construction phase, the project is expected to generate numerous job opportunities for skilled trades (e.g., electricians, plumbers, carpenters) and general laborers in the Walla Walla region. This provides a short-to-medium term economic boost to the local workforce. Post-construction, the new multispecialty outpatient facility will require a sustained workforce of healthcare professionals, including doctors, nurses, technicians, administrative staff, and support personnel. This creates long-term employment opportunities within the VA system, contributing to the local economy and providing essential healthcare jobs.

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: 12

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Walsh Group Ltd., the (UEI: 121476675)

Address: 929 W ADAMS ST, CHICAGO, IL, 60607

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $25,244,590

Exercised Options: $25,244,590

Current Obligation: $25,244,590

Subaward Activity

Number of Subawards: 63

Total Subaward Amount: $40,368,235

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline