VA awards $132M contract for mental health facility construction to Clark Construction Group, LLC

Contract Overview

Contract Amount: $132,132,790 ($132.1M)

Contractor: Clark Construction Group, LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2014-09-30

End Date: 2018-04-24

Contract Duration: 1,302 days

Daily Burn Rate: $101.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: BUILDING 101 MENTAL HEALTH SERVICES - PHASE II MENTAL HEALTH AND RESEARCH FACILITY AND DEMOLITION, VA PUGET SOUND HEALTH CARE SYSTEM, SEATTLE DIVISION, WA IGF::OT::IGF

Place of Performance

Location: SEATTLE, KING County, WASHINGTON, 98108

State: Washington Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $132.1 million to CLARK CONSTRUCTION GROUP, LLC for work described as: BUILDING 101 MENTAL HEALTH SERVICES - PHASE II MENTAL HEALTH AND RESEARCH FACILITY AND DEMOLITION, VA PUGET SOUND HEALTH CARE SYSTEM, SEATTLE DIVISION, WA IGF::OT::IGF Key points: 1. Contract awarded through full and open competition, suggesting a robust market for construction services. 2. The firm-fixed-price contract type indicates that the contractor bears the primary risk for cost overruns. 3. The contract duration of 1302 days (approx. 3.5 years) suggests a significant, multi-phase construction project. 4. The project is located in Seattle, WA, a region with substantial federal construction activity. 5. The North American Industry Classification System (NAICS) code 236220 points to commercial and institutional building construction. 6. The award was made by the Department of Veterans Affairs, highlighting their investment in healthcare infrastructure.

Value Assessment

Rating: good

The contract value of $132 million for a mental health and research facility, including demolition, appears substantial for a project of this scope. Benchmarking against similar large-scale federal construction projects would be necessary for a precise value-for-money assessment. However, the firm-fixed-price nature of the contract suggests that the government has secured a defined cost, shifting cost overrun risks to the contractor. The duration of the contract also implies a complex undertaking, which can sometimes lead to higher costs due to extended overhead and management.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of 3 bidders suggests a competitive environment for this large-scale construction project. A higher number of bidders generally leads to more competitive pricing and a wider selection of qualified contractors, which is beneficial for the government.

Taxpayer Impact: Full and open competition typically results in better pricing for taxpayers by fostering a competitive bidding process that drives down costs.

Public Impact

Veterans in the Puget Sound region will benefit from improved mental health and research facilities. The project delivers essential infrastructure for the Department of Veterans Affairs' healthcare system. The construction activities will likely create numerous jobs in the Seattle metropolitan area. The facility will support advanced mental health research, potentially leading to better treatment outcomes for veterans.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for construction delays impacting service delivery timelines.
Risk of unforeseen site conditions during demolition and construction phases.
Ensuring compliance with all environmental and safety regulations during a large-scale build.

Positive Signals

Firm-fixed-price contract mitigates cost overrun risk for the government.
Award to a single, experienced contractor (Clark Construction Group, LLC) suggests a focus on capability and reliability.
The project addresses a critical need for enhanced veteran healthcare infrastructure.

Sector Analysis

This contract falls within the commercial and institutional building construction sector, specifically for healthcare facilities. The federal government is a significant consumer of construction services, particularly for infrastructure projects like hospitals and research centers. The market for large-scale federal construction is often characterized by a few large, established firms capable of handling complex projects. The value of this contract is substantial within this sector, reflecting the scale and specialized nature of building a mental health and research facility.

Small Business Impact

The contract was awarded through full and open competition and does not indicate a specific small business set-aside. While Clark Construction Group, LLC is a large prime contractor, there may be opportunities for small businesses to participate as subcontractors on this project. Further analysis would be needed to determine the extent of small business subcontracting planned for this contract.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of Veterans Affairs contracting officers and project managers. The Inspector General's office for the VA would have jurisdiction to investigate any potential fraud, waste, or abuse related to the contract's execution. Transparency is generally maintained through contract award databases and reporting requirements, though specific project oversight details are not provided.

Related Government Programs

VA Healthcare Construction Projects
Federal Mental Health Infrastructure
Large-Scale Commercial Building Contracts
Department of Veterans Affairs Capital Investments

Risk Flags

Potential for cost overruns despite FFP contract if scope changes significantly.
Risk of delays due to complex demolition and construction phases.
Ensuring adequate oversight for a multi-year, high-value project.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $132.1 million to CLARK CONSTRUCTION GROUP, LLC. BUILDING 101 MENTAL HEALTH SERVICES - PHASE II MENTAL HEALTH AND RESEARCH FACILITY AND DEMOLITION, VA PUGET SOUND HEALTH CARE SYSTEM, SEATTLE DIVISION, WA IGF::OT::IGF

Who is the contractor on this award?

The obligated recipient is CLARK CONSTRUCTION GROUP, LLC.

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 $132.1 million.

What is the period of performance?

Start: 2014-09-30. End: 2018-04-24.

What is the track record of Clark Construction Group, LLC with the Department of Veterans Affairs?

Clark Construction Group, LLC has a significant history of working with the Department of Veterans Affairs on various construction projects. Their portfolio includes numerous healthcare facilities, research centers, and other infrastructure developments for the VA across different regions. This extensive experience suggests a strong understanding of VA requirements, construction standards, and project management needs specific to federal healthcare facilities. Their past performance with the VA would have been a key factor in the evaluation process for this $132 million contract, indicating a level of trust and proven capability in delivering complex projects for the agency.

How does the $132 million contract value compare to similar VA mental health facility projects?

The $132 million contract value for the "BUILDING 101 MENTAL HEALTH SERVICES - PHASE II MENTAL HEALTH AND RESEARCH FACILITY AND DEMOLITION" project is substantial, reflecting the complexity and scale of constructing a specialized healthcare and research facility. Comparing this value requires looking at other large-scale federal healthcare construction projects, particularly those undertaken by the VA. Projects involving new construction, significant renovations, or specialized facilities like research labs and mental health units often range from tens to hundreds of millions of dollars. Without specific comparable project data from the VA's recent awards, it's difficult to definitively benchmark, but the figure aligns with the expected cost of major federal medical infrastructure development.

What are the primary risks associated with a large-scale construction contract of this nature?

Large-scale construction contracts like this one carry several inherent risks. For the government, risks include potential cost overruns (though mitigated by the firm-fixed-price type), schedule delays, and quality control issues. For the contractor, risks involve managing complex logistics, unforeseen site conditions (especially with demolition involved), labor availability, material price fluctuations, and adherence to stringent regulatory and safety standards. The firm-fixed-price nature shifts much of the financial risk to Clark Construction Group, LLC, but they must meticulously manage project execution to avoid performance issues or claims. The extended duration also increases exposure to market volatility and potential changes in project requirements.

How effective is the firm-fixed-price contract type in ensuring value for the government on this project?

The firm-fixed-price (FFP) contract type is generally considered effective for ensuring value on construction projects where the scope of work is well-defined, as it is here with a specific facility build. Under an FFP contract, the contractor agrees to a set price for the work, meaning they bear the responsibility for any cost overruns. This incentivizes the contractor to manage costs efficiently and complete the project within budget. For the government, this provides cost certainty and predictability, making it easier to budget and manage expenditures. While it shifts risk to the contractor, it also means the government pays a premium for this risk transfer, as the contractor will factor potential contingencies into their initial bid price.

What are the historical spending patterns for similar construction projects by the VA in Washington state?

Historical spending patterns for similar construction projects by the VA in Washington state indicate a consistent investment in healthcare infrastructure. The VA Puget Sound Health Care System, in particular, has undertaken numerous capital improvement projects over the years, ranging from expansions of existing facilities to the construction of new medical buildings. These projects often involve significant dollar amounts, frequently in the tens to hundreds of millions, depending on the scope. Factors influencing spending include the need for modernized facilities, increased capacity, specialized services (like mental health and research), and compliance with evolving healthcare standards. The $132 million awarded for this project aligns with the scale of major construction initiatives the VA undertakes in states with large veteran populations and existing healthcare networks.

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: VA101-14-R-0079

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Clark Construction LLC (UEI: 080206726)

Address: 180 HOWARD ST STE 1200, SAN FRANCISCO, CA, 94105

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

Financial Breakdown

Contract Ceiling: $132,132,791

Exercised Options: $132,132,791

Current Obligation: $132,132,790

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline