VA awards $50.8M design-build contract for New York construction, with a 2025 completion date

Contract Overview

Contract Amount: $50,765,099 ($50.8M)

Contractor: MGC Services a Joint Venture LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2018-09-21

End Date: 2025-10-29

Contract Duration: 2,595 days

Daily Burn Rate: $19.6K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: DESIGN-BUILD CONSTRUCTION

Place of Performance

Location: CALVERTON, SUFFOLK County, NEW YORK, 11933

State: New York Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $50.8 million to MGC SERVICES A JOINT VENTURE LLC for work described as: DESIGN-BUILD CONSTRUCTION Key points: 1. Contract value of $50.8 million represents a significant investment in infrastructure. 2. The contract is a definitive contract with a firm fixed price, indicating defined scope and cost. 3. Awarded to MGC Services A Joint Venture LLC, a single entity. 4. The contract duration is 2595 days, spanning over 7 years. 5. The North American Industry Classification System (NAICS) code 237990 suggests a focus on heavy civil engineering construction. 6. The contract was awarded under full and open competition after exclusion of sources. 7. The contract is not set aside for small businesses.

Value Assessment

Rating: fair

The contract value of $50.8 million for a design-build construction project over seven years requires careful benchmarking against similar VA or other federal projects. Without specific details on the scope of work, it's challenging to assess value for money. The firm fixed-price nature suggests cost certainty, but the long duration could introduce risks if not managed effectively. The absence of small business set-aside status means competition was open, which can be a positive indicator for pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition after exclusion of sources.' This indicates that while the competition was intended to be broad, certain sources may have been excluded based on specific criteria. The number of bidders is not provided, which limits the assessment of the level of competition. A robust competition typically leads to better price discovery and potentially lower costs for the government.

Taxpayer Impact: The open competition, even with exclusions, suggests an effort to obtain competitive pricing for taxpayer funds. However, the specific reasons for excluding sources could impact the final price and the range of innovative solutions available.

Public Impact

The primary beneficiaries are likely the Department of Veterans Affairs, which will receive the constructed facility or infrastructure. The project will deliver heavy and civil engineering construction services. The geographic impact is localized to New York, where the construction will take place. The contract will likely create or sustain jobs in the construction sector in New York. Veterans may indirectly benefit from improved facilities or services resulting from this construction.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (over 7 years) increases the risk of cost overruns due to inflation or unforeseen project changes.
The 'exclusion of sources' in the competition method warrants further investigation to ensure fair market access and optimal pricing.
Lack of specific details on the project scope makes it difficult to assess the true value for money.
Firm fixed-price contracts can be disadvantageous if the scope is not perfectly defined, potentially leading to change orders.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Full and open competition, even with exclusions, aims to leverage market forces for better pricing.
The contract is awarded to a joint venture, potentially bringing diverse expertise to the project.

Sector Analysis

This contract falls within the heavy and civil engineering construction sector, specifically under NAICS code 237990. This sector includes a wide range of projects such as highways, streets, bridges, tunnels, and other infrastructure. The market for federal construction contracts is substantial, with significant annual spending across various agencies. Benchmarking this $50.8 million contract would involve comparing its cost and scope to similar large-scale infrastructure projects undertaken by the VA or other federal entities like the Army Corps of Engineers or GSA.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This means that the competition was open to all eligible contractors, including large businesses. While this can foster broad competition, it may limit opportunities for small businesses to secure prime contracts of this magnitude. Subcontracting opportunities for small businesses may arise, but this is not explicitly detailed in the provided data.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Veterans Affairs. As a definitive contract with a firm fixed price, oversight would focus on ensuring adherence to the contract terms, quality of work, and timely completion. Transparency would be facilitated through contract reporting mechanisms. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

VA Major Construction Projects
Federal Design-Build Contracts
Civil Engineering Construction Contracts
Department of Veterans Affairs Capital Investments

Risk Flags

Long contract duration may increase cost risk.
Competition method 'after exclusion of sources' requires scrutiny.
Lack of detailed scope limits value assessment.
Potential for cost increases due to inflation over 7+ years.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $50.8 million to MGC SERVICES A JOINT VENTURE LLC. DESIGN-BUILD CONSTRUCTION

Who is the contractor on this award?

The obligated recipient is MGC SERVICES A JOINT VENTURE 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 $50.8 million.

What is the period of performance?

Start: 2018-09-21. End: 2025-10-29.

What specific construction project is this contract for, and what are the key deliverables?

The provided data identifies the contract as 'DESIGN-BUILD CONSTRUCTION' under NAICS code 237990 (Other Heavy and Civil Engineering Construction) awarded by the Department of Veterans Affairs. However, the specific project details, such as the type of facility or infrastructure being built, its location within New York, and the precise scope of work (e.g., new building, renovation, specific infrastructure), are not included. Key deliverables would typically include the completed design documents and the fully constructed facility or infrastructure according to those specifications. Without more information, a detailed assessment of the project's purpose and expected outcomes is not possible.

How does the $50.8 million contract value compare to similar VA construction projects?

Benchmarking the $50.8 million contract value requires comparison with similar large-scale design-build construction projects undertaken by the Department of Veterans Affairs or other federal agencies for comparable infrastructure. For instance, if this contract is for a new hospital wing, it should be compared to other hospital construction projects of similar size and complexity. If it's for infrastructure like roads or utilities, comparisons should be made within that category. The seven-year duration also suggests a substantial project. Without specific project scope details, a precise comparison is difficult, but $50.8 million represents a significant investment for a single construction contract, placing it in the mid-to-large category for federal projects.

What are the potential risks associated with the long contract duration of over seven years?

A contract duration of 2595 days (over seven years) for a design-build construction project presents several potential risks. Firstly, inflation could significantly increase material and labor costs over such an extended period, potentially impacting the firm fixed-price if not adequately accounted for in the initial pricing. Secondly, unforeseen site conditions or changes in regulatory requirements could necessitate costly modifications. Thirdly, maintaining consistent project management oversight and contractor performance over many years can be challenging. Finally, technological advancements in construction methods or materials might emerge during the contract period, making the completed project potentially outdated or less efficient compared to newer methods if the design is not forward-looking.

What does 'full and open competition after exclusion of sources' imply for cost and efficiency?

The term 'full and open competition after exclusion of sources' suggests that the solicitation was initially intended for broad competition, but specific sources were subsequently excluded. The implications for cost and efficiency are mixed. On one hand, 'full and open' competition generally drives down prices through market forces. On the other hand, the exclusion of sources could limit the number of potential bidders, potentially reducing the competitive pressure and possibly leading to higher prices than if all capable sources were allowed to compete. The rationale behind the exclusion is critical; if based on legitimate technical requirements or past performance, it might ensure a more qualified pool. However, if arbitrary, it could stifle competition and increase costs.

What is the track record of MGC SERVICES A JOINT VENTURE LLC with federal contracts?

Information regarding the specific track record of 'MGC SERVICES A JOINT VENTURE LLC' with federal contracts is not provided in the given data. To assess their reliability and past performance, one would need to consult federal procurement databases like SAM.gov or FPDS. This would involve reviewing their history of awarded contracts, contract values, performance ratings, and any instances of disputes or terminations. A joint venture's track record can also be influenced by the performance history of its individual member companies. Without this data, it's impossible to evaluate their experience and likelihood of successful project completion.

Are there any specific performance metrics or milestones tied to this contract?

The provided data does not specify any performance metrics or milestones for this contract. Typically, definitive contracts, especially long-term construction projects, include detailed schedules with key milestones (e.g., design completion, foundation work, structural completion, final inspection) and performance standards related to quality, safety, and timeliness. These are crucial for monitoring progress and ensuring the contractor meets obligations. The firm fixed-price nature implies that the contractor is responsible for meeting these standards within the agreed-upon price. Further details would likely be found in the contract's statement of work or performance work statement.

Industry Classification

NAICS: Construction › Other Heavy and Civil Engineering Construction › Other Heavy and Civil Engineering Construction

Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCTION OF BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 36C10F18R0494

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 5324 VAN DYKE RD, LUTZ, FL, 33558

Business Categories: Category Business, Corporate Entity Not Tax Exempt, DoT Certified Disadvantaged Business Enterprise, Hispanic American Owned Business, Limited Liability Corporation, Minority Owned Business, Self-Certified Small Disadvantaged Business, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $50,765,318

Exercised Options: $50,765,318

Current Obligation: $50,765,099

Actual Outlays: $4,783,411

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline