VA awards $60.5M for architectural services in Kentucky, spanning over 12 years

Contract Overview

Contract Amount: $60,527,436 ($60.5M)

Contractor: Urs-Smithgroup Joint Venture

Awarding Agency: Department of Veterans Affairs

Start Date: 2009-06-10

End Date: 2021-10-31

Contract Duration: 4,526 days

Daily Burn Rate: $13.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 10

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: LOUISVILLE

Place of Performance

Location: LOUISVILLE, JEFFERSON County, KENTUCKY, 40201

State: Kentucky Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $60.5 million to URS-SMITHGROUP JOINT VENTURE for work described as: LOUISVILLE Key points: 1. Contract value represents a significant investment in facility design and planning. 2. Long duration suggests a need for sustained architectural support for VA projects. 3. Firm Fixed Price contract type offers cost certainty for the government. 4. Full and Open Competition indicates a broad market solicitation. 5. The contract was awarded to a joint venture, potentially leveraging specialized expertise. 6. Geographic focus on Kentucky highlights regional infrastructure development needs.

Value Assessment

Rating: good

The contract's value of $60.5 million over 12 years averages to approximately $5 million annually, which is a reasonable figure for comprehensive architectural services supporting a large agency like the VA. Benchmarking against similar large-scale architectural contracts for federal agencies reveals this spending is within expected ranges for multi-year, complex projects. The Firm Fixed Price structure provides a degree of cost control, though the long duration necessitates careful monitoring of scope creep and potential change orders to ensure continued value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under Full and Open Competition, suggesting that the Department of Veterans Affairs sought proposals from all responsible sources. This approach typically leads to a wider pool of potential bidders and encourages competitive pricing. The fact that 10 bids were received indicates a healthy level of interest and competition for this type of federal work.

Taxpayer Impact: A competitive bidding process generally benefits taxpayers by driving down costs and ensuring the government receives the best possible value for its investment in architectural services.

Public Impact

Veterans in Kentucky will benefit from improved healthcare facilities designed under this contract. The contract supports the modernization and expansion of VA infrastructure in the region. Architectural and engineering firms, including potentially small businesses through subcontracting, will be engaged. The project contributes to the local economy in Kentucky through employment and related services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (12+ years) increases risk of cost overruns due to inflation and scope changes.
Potential for contractor performance degradation over an extended period.
Dependence on a single joint venture for critical architectural services over a long timeframe.

Positive Signals

Firm Fixed Price contract provides cost predictability.
Full and Open Competition suggests a robust selection process and potential for competitive pricing.
Award to a joint venture may indicate access to specialized skills and resources.

Sector Analysis

This contract falls within the Architectural Services sector, a critical component of the broader Construction and Engineering industry supporting federal infrastructure development. The market for federal architectural services is competitive, with numerous firms vying for government contracts. Spending in this area is often driven by the need to maintain, upgrade, or build new facilities for various agencies. Comparable spending benchmarks for large federal architectural contracts can range from tens to hundreds of millions of dollars, depending on the scope and duration.

Small Business Impact

While the contract was awarded under Full and Open Competition and there is no explicit small business set-aside indicated (ss: false, sb: false), the joint venture structure could potentially involve small business participation through subcontracting. The impact on the small business ecosystem would depend on the specific subcontracting plans of the URS-Smithgroup Joint Venture. Without explicit set-aside goals, direct benefits to small businesses are not guaranteed but are possible through the prime contractor's procurement practices.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of Veterans Affairs contracting officers and program managers. Accountability is established through the Firm Fixed Price contract terms, requiring delivery of specified architectural services. Transparency is generally maintained through federal contract databases where award details are published. Inspector General jurisdiction would apply if any fraud, waste, or abuse related to the contract is suspected.

Related Government Programs

VA Capital Asset Realignment for Enhanced Services (CARES) Act projects
Federal Buildings Fund
Military Construction, Veterans Affairs, and Related Agencies Appropriations Act
Architectural and Engineering Services Contracts

Risk Flags

Long contract duration may lead to scope creep and cost overruns.
Potential for performance degradation over an extended period.
Dependence on a single joint venture for critical services.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $60.5 million to URS-SMITHGROUP JOINT VENTURE. LOUISVILLE

Who is the contractor on this award?

The obligated recipient is URS-SMITHGROUP 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 $60.5 million.

What is the period of performance?

Start: 2009-06-10. End: 2021-10-31.

What is the historical spending trend for architectural services by the Department of Veterans Affairs?

The Department of Veterans Affairs (VA) consistently allocates significant funds towards architectural and engineering services to support its vast network of healthcare facilities and administrative buildings. Historically, VA spending in this category has fluctuated based on infrastructure needs, modernization initiatives, and specific capital investment programs. For instance, major projects like the VA MISSION Act and various facility upgrades have driven substantial contract awards. Analyzing historical data reveals a trend of increasing investment in facility modernization and expansion, particularly in areas requiring specialized design for healthcare environments. The average annual spending on architectural services can range from several hundred million to over a billion dollars, depending on the fiscal year and the scale of ongoing projects. This particular $60.5 million contract represents a notable, albeit specific, allocation within that broader spending pattern, likely tied to a defined set of projects or a long-term facility development plan in Kentucky.

How does the awarded price compare to similar architectural service contracts for federal agencies?

The awarded price of $60.5 million over approximately 12 years, averaging around $5 million annually, is generally considered within a reasonable range for comprehensive architectural services supporting a major federal agency like the VA. Federal architectural contracts can vary widely in cost based on project complexity, geographic location, duration, and the specific services required (e.g., design, planning, construction oversight). Contracts for large-scale hospital renovations, new medical center designs, or extensive campus planning can easily reach tens or even hundreds of millions of dollars. When compared to similar multi-year, full-service architectural contracts awarded by agencies such as the General Services Administration (GSA) or the Department of Defense for comparable facility types, this VA contract appears to be benchmarked appropriately. The Firm Fixed Price structure also suggests an effort to control costs, although the long duration necessitates careful management to ensure the final price remains competitive.

What are the primary risks associated with a contract of this duration and value?

A contract valued at $60.5 million and spanning over 12 years presents several inherent risks. Firstly, the extended duration increases the likelihood of significant changes in project scope, requirements, or technological advancements, which could lead to costly change orders and potentially exceed the initial budget if not managed meticulously. Inflation over such a long period can also erode the value of the fixed price if escalation clauses are not adequately addressed or if market conditions change drastically. Secondly, there's a risk of contractor performance degradation; maintaining consistent quality and responsiveness over more than a decade can be challenging. Key personnel might leave, or the contractor's focus could shift. Thirdly, the long-term commitment to a single joint venture might limit the agency's flexibility to adopt new solutions or engage with different providers if circumstances change. Finally, the sheer scale and duration necessitate robust oversight to prevent potential fraud, waste, or abuse, as well as to ensure the contractor remains financially stable and operationally capable throughout the contract term.

What is the track record of URS Corporation and SmithGroup in securing federal architectural contracts?

URS Corporation, prior to its acquisition by AECOM, and SmithGroup are both established firms with significant experience in federal contracting, including architectural and engineering services. URS, as a large engineering and construction firm, had a substantial portfolio of government contracts across various agencies, including the Department of Defense and the VA, often involved in large-scale infrastructure and facility projects. SmithGroup, a renowned architecture and engineering firm, also has a strong history of working with federal clients, particularly on healthcare, research, and higher education facilities, where their design expertise is highly valued. The joint venture formation suggests a strategic partnership to combine their respective strengths, likely leveraging URS's project management capabilities and federal contracting experience with SmithGroup's specialized design acumen. Both entities have demonstrated the capacity to handle complex, high-value projects, making their joint venture a credible contender for significant federal awards like this VA contract.

How does the geographic focus on Kentucky impact the contract's overall value and execution?

The geographic focus on Kentucky for this $60.5 million architectural services contract implies that the Department of Veterans Affairs has specific infrastructure needs within that state. This concentration allows for a deeper understanding of local conditions, regulations, and the specific requirements of VA facilities operating in Kentucky. It can lead to more tailored and efficient design solutions, potentially reducing unforeseen issues during the planning and execution phases. For the contractor, a defined geographic area can streamline operations, reduce travel costs, and foster stronger relationships with local stakeholders and regulatory bodies. However, it also means the contract's success is heavily tied to the VA's strategic plans for its facilities in Kentucky. If those plans change, or if there are significant economic or environmental factors unique to Kentucky that impact construction, it could affect the contract's value and execution. The award to a joint venture suggests the need for broad expertise to address potentially diverse facility types or project scales within the state.

What are the implications of the 'FULL AND OPEN COMPETITION' award type for taxpayer value?

Awarding a contract under 'Full and Open Competition' is generally a positive indicator for taxpayer value. This method requires the contracting agency, in this case, the VA, to solicit proposals from all responsible sources, ensuring a wide range of potential bidders can participate. This broad solicitation typically fosters a competitive environment where multiple companies vie for the contract, driving down prices and encouraging innovation. The presence of 10 bidders for this $60.5 million architectural services contract suggests that the competition was robust. A competitive landscape incentivizes bidders to offer their best pricing and most effective solutions to win the award. Consequently, taxpayers are more likely to benefit from cost savings and higher quality services compared to sole-source or limited competition awards, where the government may have fewer options and potentially pay a premium.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Architectural Services

Product/Service Code: ARCHITECT/ENGINEER SERVICES › ARCH-ENG SVCS - GENERAL

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: ARCHITECT-ENGINEER FAR 6.102

Offers Received: 10

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: AECOM Global II, LLC (UEI: 043271568)

Address: 500 W JEFFERSON ST STE 1600, LOUISVILLE, KY, 40202

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

Financial Breakdown

Contract Ceiling: $60,527,436

Exercised Options: $60,527,436

Current Obligation: $60,527,436

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Timeline