VA awards $80.3M contract for Biloxi Building 1 Renovation to ESA South, Inc

Contract Overview

Contract Amount: $80,271,531 ($80.3M)

Contractor: ESA South, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2025-01-07

End Date: 2027-11-10

Contract Duration: 1,037 days

Daily Burn Rate: $77.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: BILOXI BUILDING 1 RENOVATION

Place of Performance

Location: BILOXI, HARRISON County, MISSISSIPPI, 39531

State: Mississippi Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $80.3 million to ESA SOUTH, INC. for work described as: BILOXI BUILDING 1 RENOVATION Key points: 1. Contract value of $80.3M for building renovation indicates a significant investment in infrastructure. 2. The award was made under full and open competition, suggesting a robust bidding process. 3. The firm-fixed-price contract type shifts cost risk to the contractor, potentially stabilizing project expenses. 4. The project duration of over 1000 days suggests a complex and extensive renovation scope. 5. The contract is managed by the Department of Veterans Affairs, aligning with facility improvement needs for veteran services. 6. The North American Industry Classification System (NAICS) code 236220 points to commercial and institutional building construction.

Value Assessment

Rating: good

The contract value of $80.3 million for the Biloxi Building 1 Renovation appears substantial for a single building project. Benchmarking against similar large-scale institutional building renovations would be necessary for a precise value-for-money assessment. However, the firm-fixed-price nature of the contract suggests the VA has negotiated a ceiling price, which is a positive indicator for cost control. The duration of the project (over 1000 days) also implies a comprehensive scope that justifies the investment.

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 fact that it was competed openly suggests that the VA sought the best possible offer in terms of price and technical capability. Without specific bid data, it's difficult to ascertain the exact number of bidders, but open competition generally fosters a more competitive environment, which can lead to better pricing for the government.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it maximizes the potential for competitive pricing and encourages a wider range of contractors to participate, potentially leading to cost savings.

Public Impact

Veterans and VA staff will benefit from improved facilities at the Biloxi facility. The renovation will modernize Building 1, enhancing its functionality and safety. The project is geographically located in Mississippi, potentially impacting the local construction workforce. The construction services delivered will address critical infrastructure needs for the VA. The successful completion of the renovation will support the VA's mission to provide healthcare and other services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long project duration could introduce risks of cost overruns if not managed effectively.
Potential for unforeseen site conditions in an existing building that could impact schedule and budget.
Reliance on a single prime contractor for a large-scale renovation requires robust oversight.

Positive Signals

Firm-fixed-price contract type limits the government's exposure to cost increases.
Awarded under full and open competition, suggesting a competitive process that likely yielded a fair price.
The Department of Veterans Affairs has a vested interest in ensuring the successful and timely completion of this critical infrastructure project.

Sector Analysis

The construction sector, particularly commercial and institutional building construction (NAICS 236220), is a significant area of federal spending. This contract falls within that domain, focusing on the renovation of an existing government facility. Federal spending in this sector often involves large, complex projects requiring specialized expertise. Comparable spending benchmarks would typically look at the cost per square foot for similar renovation projects in the region or for similar types of institutions.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, the primary contractor, ESA South, Inc., is likely a larger entity. There is no explicit information on subcontracting plans for small businesses within this award notice. The absence of a small business set-aside means that opportunities for small businesses would primarily arise through subcontracting, the extent of which is not detailed here.

Oversight & Accountability

Oversight for this contract will be primarily managed by the Department of Veterans Affairs, the contracting agency. As a firm-fixed-price contract, the VA will focus on ensuring the contractor adheres to the scope of work, schedule, and quality standards. Accountability measures will be tied to contract milestones and deliverables. Transparency is generally facilitated through contract award databases, but detailed project progress reports may not be publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

VA Facility Renovations
Federal Building Construction
Infrastructure Modernization Projects
Department of Veterans Affairs Capital Investments

Risk Flags

Potential for schedule delays due to complexity of renovation.
Risk of unforeseen conditions in existing building structure.
Cost management critical due to large contract value and long duration.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $80.3 million to ESA SOUTH, INC.. BILOXI BUILDING 1 RENOVATION

Who is the contractor on this award?

The obligated recipient is ESA SOUTH, INC..

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 $80.3 million.

What is the period of performance?

Start: 2025-01-07. End: 2027-11-10.

What is the track record of ESA South, Inc. with the federal government, particularly with the Department of Veterans Affairs?

A review of federal procurement data would be necessary to fully assess ESA South, Inc.'s track record. This would involve examining past contract awards, performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), and any history of disputes or contract modifications. Understanding their experience with similar-sized renovation projects, especially for government facilities and specifically for the VA, would provide crucial context for evaluating their capability to successfully execute the Biloxi Building 1 Renovation. Without specific historical data, it is difficult to definitively assess their past performance.

How does the awarded amount of $80.3 million compare to the estimated cost or budget for this renovation project?

The provided data lists the award amount as $80,271,531.25. To assess if this represents good value, it would be essential to compare this figure against the government's initial cost estimate or allocated budget for the Biloxi Building 1 Renovation. If the award is significantly below the estimate, it could indicate strong competition or favorable market conditions. Conversely, if it's at or above the estimate, further scrutiny of the estimate's accuracy and the contractor's pricing would be warranted. The absence of the original estimate in the provided data limits this comparative analysis.

What are the primary risks associated with a renovation project of this scale and duration?

Renovating an existing building, especially one as large as implied by an $80.3 million contract and a duration exceeding 1000 days, carries several inherent risks. These include unforeseen structural issues, hazardous materials (like asbestos or lead paint) discovered during demolition, and potential utility conflicts. Schedule risks are also significant, with potential delays caused by weather, supply chain disruptions, or changes in scope. Cost risks, although mitigated by the firm-fixed-price contract, can still arise from change orders if the scope expands or if initial assumptions about existing conditions prove incorrect. Ensuring adequate contingency planning and robust project management by the VA is crucial.

What is the expected impact of this renovation on the VA's ability to provide services at the Biloxi facility?

This renovation is intended to modernize and improve Building 1 at the Biloxi facility, which should ultimately enhance the VA's capacity and efficiency in delivering services. By upgrading infrastructure, the project aims to create a safer, more functional, and potentially more technologically advanced environment. This could lead to improved patient care, better working conditions for staff, and potentially increased capacity for certain services. The specific impact will depend on which parts of Building 1 are being renovated and the types of services it houses. The extended duration suggests a comprehensive overhaul that should yield significant long-term benefits.

How does the firm-fixed-price contract type influence the financial risk for both the VA and ESA South, Inc.?

A firm-fixed-price (FFP) contract is designed to provide price certainty for the buyer (the VA) and shifts the majority of the cost risk to the seller (ESA South, Inc.). Under an FFP agreement, the contractor is obligated to complete the work for the agreed-upon price, regardless of their actual costs. This means ESA South, Inc. bears the risk of cost overruns due to factors like inefficient performance, unexpected material price increases, or labor shortages. The VA benefits from a predictable total cost, assuming no scope changes. However, contractors often build in a contingency premium into FFP bids to account for potential risks, which could result in a higher initial price compared to other contract types.

What does the NAICS code 236220 signify in terms of the scope of work for this contract?

The North American Industry Classification System (NAICS) code 236220 specifically designates 'Commercial and Institutional Building Construction.' This code covers establishments primarily responsible for the construction and remodeling of nonresidential buildings, including commercial buildings, industrial buildings, public administration buildings, and other institutional structures like hospitals and educational facilities. For this VA contract, it indicates that the scope of work for ESA South, Inc. involves the physical construction and renovation activities related to Building 1, encompassing all trades and management necessary to complete the project according to the contract specifications.

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: 36C10F24R50025

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1681 SUCCESS DR, CANTONMENT, FL, 32533

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

Financial Breakdown

Contract Ceiling: $80,271,531

Exercised Options: $80,271,531

Current Obligation: $80,271,531

Actual Outlays: $13,672,680

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline