VA awards $14.1M for Buffalo VAMC renovation to Welch Construction Inc

Contract Overview

Contract Amount: $14,149,382 ($14.1M)

Contractor: Welch Construction Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2023-03-15

End Date: 2026-01-29

Contract Duration: 1,051 days

Daily Burn Rate: $13.5K/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: 9C RENOVATION BUFFALO VAMC

Place of Performance

Location: MARCELLUS, ONONDAGA County, NEW YORK, 13108

State: New York Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $14.1 million to WELCH CONSTRUCTION INC. for work described as: 9C RENOVATION BUFFALO VAMC Key points: 1. Contract value appears reasonable for a large-scale renovation 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 transfers risk to the contractor. 4. Project duration of 1051 days indicates a significant scope of work. 5. The award is for commercial and institutional building construction. 6. The contractor, Welch Construction Inc., is a new awardee for this agency.

Value Assessment

Rating: good

The contract value of $14.1 million for the Buffalo VAMC renovation seems within a reasonable range for a project of this scale. Benchmarking against similar large-scale healthcare facility renovations would provide a more precise value-for-money assessment. The Firm Fixed Price contract type is standard for construction projects and helps control costs by shifting risk to the contractor. Without specific cost breakdowns or comparisons to similar projects, a definitive value assessment is challenging, but the overall price appears justifiable for the scope.

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 while the competition was broad, specific sources may have been excluded prior to the final award. The presence of 3 bidders suggests a moderate level of competition. A higher number of bidders typically leads to more competitive pricing, but three bidders can still result in a fair market price, especially for specialized construction services.

Taxpayer Impact: The use of full and open competition, even with exclusions, generally benefits taxpayers by encouraging multiple firms to bid, which can drive down costs and ensure the government receives competitive pricing.

Public Impact

Veterans in the Buffalo, NY region will benefit from improved facilities at the VAMC. The renovation will likely enhance the quality and safety of healthcare services provided. The project will create construction jobs in the New York area. The local economy may see a boost from the construction activities and associated spending.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen issues arise during renovation.
Dependence on contractor performance for timely completion and quality.
Risk of scope creep if project requirements change significantly.

Positive Signals

Firm Fixed Price contract mitigates cost uncertainty for the government.
Full and open competition suggests a potentially competitive price.
The project addresses critical infrastructure needs for a healthcare facility.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a significant segment of the U.S. economy. Federal spending in this sector often involves large-scale projects for government facilities, including healthcare, administrative, and research buildings. The market is characterized by a mix of large general contractors and specialized subcontractors. The $14.1 million award is substantial for a single project, reflecting the complexity and scale typical of major government construction initiatives.

Small Business Impact

The data indicates that small business participation was not a primary focus for this specific award, as the 'sb' field is false. There is no explicit mention of small business set-asides or subcontracting plans in the provided data. Further investigation into the contractor's subcontracting practices would be necessary to determine the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of Veterans Affairs' contracting officers and project managers. The Firm Fixed Price nature of the contract shifts much of the performance risk to the contractor. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

VA Medical Facility Construction
Government Building Renovations
Healthcare Infrastructure Projects
Commercial Construction Contracts

Risk Flags

Contractor performance history with VA unknown.
Potential for disruption to VAMC operations due to long duration.
Scope of 'exclusions' in competition method requires clarification.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $14.1 million to WELCH CONSTRUCTION INC.. 9C RENOVATION BUFFALO VAMC

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 $14.1 million.

What is the period of performance?

Start: 2023-03-15. End: 2026-01-29.

What is the track record of Welch Construction Inc. with the Department of Veterans Affairs?

Based on the provided data, this appears to be a new award for Welch Construction Inc. with the Department of Veterans Affairs. Without access to historical contract databases or past performance reviews, it is difficult to assess their prior experience, success rate, or any potential issues encountered on previous VA projects. Further research into federal procurement records would be necessary to understand their established relationship and performance history with the agency. This lack of established history could represent a moderate risk factor, as their performance on a project of this magnitude for the VA is yet to be proven.

How does the $14.1 million contract value compare to similar VAMC renovation projects?

Directly comparing the $14.1 million contract value to similar VAMC renovation projects requires access to a database of comparable federal construction contracts. Factors such as the size of the facility, the scope of renovation (e.g., structural, MEP, cosmetic), the geographic location (which impacts labor and material costs), and the specific year of award all influence project costs. Generally, renovations of this scale for major medical centers can range from several million to tens of millions of dollars. The provided value seems plausible for a significant renovation, but a precise benchmark would necessitate a detailed analysis of similar projects awarded by the VA or other federal agencies in recent years.

What are the primary risks associated with this Firm Fixed Price contract for the VA?

While a Firm Fixed Price (FFP) contract is advantageous for cost control, the primary risks for the VA lie in potential contractor underperformance or unforeseen circumstances. If Welch Construction Inc. underestimates the project's complexity or encounters unexpected issues (e.g., hazardous materials, structural problems), they might face financial strain, potentially leading to delays or quality compromises if they attempt to cut corners. The VA's risk is mitigated by thorough initial planning and robust oversight, but the contractor bears the primary financial risk of cost overruns. Ensuring clear contract specifications and performance standards is crucial to manage these risks effectively.

How effective is 'Full and Open Competition After Exclusion of Sources' in ensuring competitive pricing?

This contracting method aims to balance broad competition with specific needs or capabilities. By excluding certain sources, the agency might be targeting specific expertise or ensuring compliance with certain regulations. While it's a form of full and open competition, the exclusion of some potential bidders could theoretically limit the number of competitive offers received, potentially impacting price discovery. However, if the exclusions are justified and a sufficient number of qualified bidders remain (in this case, 3), the competition can still be effective in driving a fair market price. The key is whether the exclusions were necessary and did not unduly restrict competition.

What is the historical spending trend for VAMC renovations by the Department of Veterans Affairs?

Analyzing historical spending trends for VAMC renovations by the Department of Veterans Affairs requires access to multi-year federal procurement data. The VA consistently invests in maintaining and upgrading its extensive network of medical facilities. Spending on renovations can fluctuate annually based on budget allocations, infrastructure needs assessments, and the prioritization of specific projects. Factors like the age of facilities, technological advancements in healthcare, and evolving patient care models drive the need for ongoing renovations. Without specific historical data, it's challenging to pinpoint trends, but it's reasonable to assume consistent, significant investment in facility modernization.

What are the potential implications of the 1051-day project duration on the VAMC's operations?

A project duration of 1051 days (approximately 2.8 years) for a VAMC renovation indicates a substantial and potentially disruptive undertaking. The VA must carefully plan phased construction or temporary relocations to minimize disruption to ongoing patient care and essential services. This extended timeline increases the risk of encountering unforeseen issues, potential delays due to weather or supply chain disruptions, and the need for sustained project management oversight. Effective communication with staff, patients, and the surrounding community will be critical throughout the project lifecycle to manage expectations and mitigate operational impacts.

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: SEALED BID

Solicitation ID: 36C24222B0069

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: $14,149,382

Exercised Options: $14,149,382

Current Obligation: $14,149,382

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline