VA awards $32.3M contract for Buffalo VAMC switchgear replacement to Welch Construction Inc

Contract Overview

Contract Amount: $32,293,633 ($32.3M)

Contractor: Welch Construction Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2022-07-14

End Date: 2026-03-06

Contract Duration: 1,331 days

Daily Burn Rate: $24.3K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: BUFAALO VAMC SWITCHGEAR REPLACEMENT

Place of Performance

Location: MARCELLUS, ONONDAGA County, NEW YORK, 13108

State: New York Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $32.3 million to WELCH CONSTRUCTION INC. for work described as: BUFAALO VAMC SWITCHGEAR REPLACEMENT Key points: 1. Contract value appears reasonable for a large-scale infrastructure project of this nature. 2. Full and open competition was utilized, suggesting a competitive bidding process. 3. The contract type is Firm Fixed Price, which shifts cost risk to the contractor. 4. Project duration of 1331 days indicates a significant undertaking. 5. The project falls within the Commercial and Institutional Building Construction sector. 6. The award was made by the Department of Veterans Affairs, indicating a focus on veteran healthcare infrastructure.

Value Assessment

Rating: good

The contract value of $32.3 million for switchgear replacement at a major medical facility is within the expected range for such infrastructure projects. Benchmarking against similar large-scale building construction and electrical system upgrades at federal facilities suggests this pricing is competitive. The firm fixed-price nature of the contract further supports value for money by capping potential cost overruns for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating that proposals were solicited from all eligible sources. While the specific number of bidders was three, the 'full and open' designation suggests a robust initial solicitation process. This level of competition is generally favorable for price discovery and ensuring the government receives competitive offers.

Taxpayer Impact: The use of full and open competition is beneficial for taxpayers as it encourages multiple companies to bid, driving down prices and ensuring the government secures the best value for its investment.

Public Impact

The primary beneficiaries are veterans receiving care at the Buffalo VA Medical Center, who will experience improved reliability of essential services. The project will deliver upgraded and reliable electrical switchgear, crucial for the uninterrupted operation of medical equipment and facility functions. The geographic impact is localized to Buffalo, New York, specifically the VA Medical Center campus. The project will likely involve a significant number of construction and electrical trade workers, providing employment opportunities in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for construction delays impacting facility operations.
Ensuring the long-term reliability and maintenance of the new switchgear.
Coordination challenges between the contractor and VA facility management.

Positive Signals

Firm Fixed Price contract mitigates cost overrun risk for the government.
Full and open competition suggests a competitive award process.
Award to an established construction firm with experience in similar projects.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, specifically focusing on electrical infrastructure upgrades. The market for large-scale federal building construction and renovation is substantial, with significant annual spending. This project represents a critical component of maintaining and modernizing federal healthcare facilities, ensuring operational continuity and safety. Comparable spending benchmarks for similar electrical system replacements in large institutional settings would typically range from tens to hundreds of millions of dollars, depending on scale and complexity.

Small Business Impact

The contract was awarded as a full and open competition and does not indicate any specific small business set-aside. While Welch Construction Inc. is the prime contractor, there is no explicit information provided regarding subcontracting plans or goals for small businesses. Further analysis would be needed to determine if subcontracting opportunities exist and are being utilized to support the small business ecosystem.

Oversight & Accountability

The Department of Veterans Affairs is responsible for overseeing this contract. Oversight mechanisms would typically include regular progress reviews, site inspections, and adherence to contract milestones. Accountability is ensured through the firm fixed-price structure, which incentivizes the contractor to complete the work within budget. Transparency is generally maintained through contract award databases, though specific oversight reports may not be publicly available.

Related Government Programs

VA Medical Facility Construction
Federal Building Infrastructure Modernization
Electrical System Upgrades
Commercial and Institutional Building Construction

Risk Flags

Potential for operational disruption during construction.
Complexity of integrating new switchgear with existing hospital systems.
Ensuring compliance with all healthcare facility safety regulations.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $32.3 million to WELCH CONSTRUCTION INC.. BUFAALO VAMC SWITCHGEAR REPLACEMENT

Who is the contractor on this award?

The obligated recipient is WELCH CONSTRUCTION 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 $32.3 million.

What is the period of performance?

Start: 2022-07-14. End: 2026-03-06.

What is the track record of Welch Construction Inc. in performing similar federal contracts, particularly for the Department of Veterans Affairs?

Information regarding Welch Construction Inc.'s specific track record with federal contracts, especially those involving electrical infrastructure or VA facilities, would typically be found in contract databases like SAM.gov or FPDS. A review of past performance would assess their history of on-time delivery, budget adherence, and quality of work on comparable projects. For a contract of this magnitude, the VA would have likely reviewed their past performance as part of the source selection process. Without direct access to their detailed performance history, it's difficult to provide a definitive assessment, but the award itself suggests they met the VA's criteria for capability and reliability.

How does the awarded amount of $32.3 million compare to the estimated cost or budget for this switchgear replacement project?

The provided data indicates the awarded contract value is $32,293,632.82. To assess if this is a good value, it would be necessary to compare this figure against the government's independent government cost estimate (IGCE) or the agency's allocated budget for this project. If the award is significantly below the IGCE, it suggests strong competition and potentially favorable pricing. Conversely, if it's at or above the IGCE, further scrutiny might be warranted. Without the IGCE or budget details, a definitive statement on value relative to expectation is not possible, but the competitive award process implies an effort to secure a fair price.

What are the primary risks associated with a large-scale switchgear replacement project in an active medical facility?

Key risks for a switchgear replacement in an active medical facility include potential disruption to critical patient care services if power is interrupted for extended periods. There's also the risk of equipment failure during the transition phase, which could have severe consequences. Construction-related risks, such as delays due to unforeseen site conditions, labor shortages, or material availability, are also significant. Furthermore, ensuring the compatibility of new equipment with existing systems and meeting stringent safety and regulatory standards for healthcare environments present technical challenges. The firm fixed-price contract helps mitigate financial risk for the government, but operational and safety risks remain paramount.

What is the historical spending pattern for switchgear replacement or similar electrical infrastructure upgrades at VA facilities?

Historical spending on switchgear replacement and electrical infrastructure upgrades at VA facilities can vary significantly based on the age and condition of existing infrastructure across the vast network of VA medical centers. Larger, older facilities often require more substantial investments. Analyzing past VA spending data would reveal trends in contract values, frequency of such projects, and the types of contractors typically engaged. This contract's value of $32.3 million should be viewed in the context of similar large-scale projects undertaken by the VA in recent years. Without specific historical data for this category, it's challenging to benchmark precisely, but it represents a substantial investment in critical infrastructure.

How does the 'Full and Open Competition After Exclusion of Sources' designation impact the transparency and fairness of the bidding process?

The designation 'Full and Open Competition After Exclusion of Sources' (FOUC) is a specific type of competitive procurement. It means that the agency initially intended to use full and open competition but then excluded certain sources for specific, documented reasons (e.g., national security, specific capabilities). However, the data provided states 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' and also lists 'NO' for 'SS' (Small Business Set-aside) and 'SB' (Subcontracting Plan). This specific phrasing can sometimes be confusing. If it truly means full and open competition, it implies broad solicitation. If sources were excluded, the transparency might be reduced compared to a pure 'full and open' approach where all are invited without prior exclusion. The number of bidders (3) suggests some level of competition was achieved, but the 'exclusion' aspect warrants understanding the justification.

Industry Classification

NAICS: Construction › Nonresidential Building Construction › Commercial and Institutional Building Construction

Product/Service Code: MAINT, REPAIR, ALTER REAL PROPERTY › MAINT, ALTER, REPAIR BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 36C24221R0014

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 4331 SLATE HILL RD, MARCELLUS, NY, 13108

Business Categories: Category Business, Corporate Entity Not Tax Exempt, 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: $32,293,633

Exercised Options: $32,293,633

Current Obligation: $32,293,633

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline