VA awards $50.7M construction contract for VAMC Jefferson Barracks, highlighting firm fixed-price structure

Contract Overview

Contract Amount: $50,707,865 ($50.7M)

Contractor: Walsh Alberici Joint Venture

Awarding Agency: Department of Veterans Affairs

Start Date: 2016-04-29

End Date: 2019-04-21

Contract Duration: 1,087 days

Daily Burn Rate: $46.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: IGF::OT::IGF CONSTRUCT REHAB BUILDING AT VAMC JEFFERSON BARRACKS DIVISION, ST. LOUIS, MO

Place of Performance

Location: SAINT LOUIS, SAINT LOUIS County, MISSOURI, 63105

State: Missouri Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $50.7 million to WALSH ALBERICI JOINT VENTURE for work described as: IGF::OT::IGF CONSTRUCT REHAB BUILDING AT VAMC JEFFERSON BARRACKS DIVISION, ST. LOUIS, MO Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The firm fixed-price contract type shifts cost risk to the contractor. 3. The contract duration of 1087 days indicates a significant, long-term construction project. 4. The awardee, Walsh Alberici Joint Venture, is a key player in large-scale construction. 5. This project falls under the broad category of Commercial and Institutional Building Construction. 6. The contract value represents a substantial investment in healthcare infrastructure.

Value Assessment

Rating: good

The contract value of $50.7 million for a major building rehabilitation project appears reasonable within the context of large-scale construction. Benchmarking against similar VA or other federal healthcare facility construction projects would provide a more precise value-for-money assessment. The firm fixed-price structure, while beneficial for budget certainty, requires careful initial scope definition to avoid change orders that could inflate costs.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit a bid. With two bids received, the competition level was moderate. While more bidders could potentially drive prices lower, two bids suggest that the market was sufficiently engaged and that the government likely received a competitive price relative to the scope of work.

Taxpayer Impact: A competitive bidding process like full and open competition generally benefits taxpayers by fostering price discovery and encouraging contractors to offer their best pricing to win the contract.

Public Impact

Veterans in the St. Louis, MO area will benefit from improved healthcare facilities. The project involves the rehabilitation of a building at the VAMC Jefferson Barracks Division. The geographic impact is localized to St. Louis, Missouri. The construction project will likely create numerous jobs for skilled trades and laborers in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if scope creep occurs under the firm fixed-price contract.
Dependence on the performance and financial stability of the Walsh Alberici Joint Venture.
Risk of delays impacting the delivery of improved healthcare services to veterans.

Positive Signals

Awarded through full and open competition, indicating a robust bidding process.
Firm fixed-price contract provides budget certainty for the VA.
The contractor is a joint venture with experience in large construction projects.
The project aims to improve critical healthcare infrastructure for veterans.

Sector Analysis

This contract falls within the Construction sector, specifically Commercial and Institutional Building Construction. The market for federal construction projects is substantial, with agencies like the Department of Veterans Affairs consistently investing in upgrading and maintaining their facilities. Comparable spending benchmarks would involve looking at other large-scale renovation or new construction projects for federal buildings, particularly healthcare facilities, to assess cost-effectiveness.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses in the provided data. This suggests that the primary award went to a large joint venture, and the direct impact on the small business ecosystem may be limited unless the joint venture actively engages small businesses as subcontractors.

Oversight & Accountability

The Department of Veterans Affairs, as the contracting agency, is responsible for oversight. The Inspector General's office within the VA would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract. Transparency is generally maintained through contract award databases and public reporting, though specific oversight mechanisms for ongoing construction projects would involve site inspections and progress reviews.

Related Government Programs

Department of Veterans Affairs Medical Facility Construction
Federal Building Rehabilitation Projects
Large-Scale Commercial Construction Contracts
Firm Fixed-Price Construction Awards

Risk Flags

Potential for cost overruns due to fixed-price nature.
Risk of project delays impacting service delivery.
Need for diligent contract oversight over a long duration.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $50.7 million to WALSH ALBERICI JOINT VENTURE. IGF::OT::IGF CONSTRUCT REHAB BUILDING AT VAMC JEFFERSON BARRACKS DIVISION, ST. LOUIS, MO

Who is the contractor on this award?

The obligated recipient is WALSH ALBERICI 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 $50.7 million.

What is the period of performance?

Start: 2016-04-29. End: 2019-04-21.

What is the track record of Walsh Alberici Joint Venture with the Department of Veterans Affairs?

A comprehensive review of Walsh Alberici Joint Venture's track record with the Department of Veterans Affairs would require accessing detailed contract history databases. However, their formation as a joint venture suggests a strategic partnership to pursue large-scale projects, likely indicating prior experience in complex construction. Federal procurement data typically tracks past performance, including on-time delivery, budget adherence, and quality of work. Without specific data on their prior VA contracts, it's difficult to definitively assess their performance history, but their ability to win a $50.7 million contract implies a level of demonstrated capability and trust from the agency.

How does the $50.7 million award compare to similar VA building rehabilitation projects?

Benchmarking the $50.7 million award requires comparing it to similar projects in terms of scope, size, and complexity. Projects involving the rehabilitation of large institutional buildings, especially healthcare facilities like VAMCs, can vary significantly in cost due to factors such as structural integrity, specialized systems (e.g., HVAC, medical gas), and historical preservation requirements. A direct comparison would involve analyzing the square footage, the extent of renovation (e.g., gut renovation vs. cosmetic updates), and the specific VAMC's location and age. Generally, large-scale federal building rehabilitations can range from tens to hundreds of millions of dollars, making this award appear within a plausible range for a significant project.

What are the primary risks associated with this firm fixed-price construction contract?

The primary risk with a firm fixed-price (FFP) contract, while offering budget certainty, lies in the potential for cost overruns if the contractor miscalculates the scope, complexity, or unforeseen conditions. For the government, the risk is that the contractor may cut corners on quality or materials to maintain profitability if issues arise. For the contractor, the risk is absorbing unexpected cost increases due to unforeseen site conditions, labor shortages, or material price escalations. Effective risk mitigation involves a well-defined scope of work, thorough pre-bid site investigations, and robust contract administration to monitor progress and quality.

How effective is full and open competition in ensuring value for taxpayer money in large construction contracts?

Full and open competition is generally considered the most effective method for ensuring value for taxpayer money in large construction contracts. By allowing all responsible sources to bid, it maximizes the pool of potential contractors, thereby increasing the likelihood of receiving competitive pricing. This process encourages contractors to submit their best offers and fosters innovation as they vie for the contract. While it requires significant administrative effort to manage the solicitation and evaluation process, the potential for cost savings and access to a wider range of capabilities typically outweighs these costs, leading to better overall value.

What is the historical spending trend for building construction and rehabilitation by the Department of Veterans Affairs?

The Department of Veterans Affairs consistently allocates substantial funds towards the construction, renovation, and maintenance of its extensive network of medical facilities. Historical spending data reveals a significant and ongoing investment in upgrading aging infrastructure and expanding capacity to meet the healthcare needs of veterans. This spending is influenced by factors such as the age of existing facilities, the need for modernization to incorporate new medical technologies, and the demand for healthcare services. Annual budgets for VA construction and major repairs often run into the billions of dollars, reflecting the scale of their infrastructure portfolio.

What are the implications of a 1087-day contract duration for project oversight and veteran services?

A contract duration of 1087 days (approximately three years) for a major building rehabilitation project signifies a substantial undertaking. For project oversight, it necessitates sustained attention from contracting officers and technical representatives to monitor progress, manage change orders, ensure quality control, and maintain communication with the contractor over an extended period. For veteran services, a long duration means that the benefits of the improved facility will be delayed. It also implies that existing services may need to be relocated or adapted during the construction phase, potentially causing temporary disruptions or inconveniences for veterans accessing care.

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: VA101-15-R-0081

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

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

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

Financial Breakdown

Contract Ceiling: $50,707,865

Exercised Options: $50,707,865

Current Obligation: $50,707,865

Subaward Activity

Number of Subawards: 281

Total Subaward Amount: $379,310,161

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline