VA awards $5.45M contract for B9 renovation to Welch Construction Inc., emphasizing firm fixed-price terms

Contract Overview

Contract Amount: $5,451,658 ($5.5M)

Contractor: Welch Construction Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2025-02-14

End Date: 2027-02-11

Contract Duration: 727 days

Daily Burn Rate: $7.5K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 8

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: RENOVATE B9

Place of Performance

Location: BATH, STEUBEN County, NEW YORK, 14810

State: New York Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $5.5 million to WELCH CONSTRUCTION INC. for work described as: RENOVATE B9 Key points: 1. Contract value of $5.45M for building renovation suggests a significant project scope. 2. The firm fixed-price contract type shifts cost risk to the contractor, potentially benefiting the government. 3. Competition was conducted under 'full and open competition after exclusion of sources,' indicating a potentially limited but still competitive process. 4. The contract duration of 727 days points to a substantial renovation timeline. 5. Awarded by the Department of Veterans Affairs, the project likely aims to improve facilities for veteran services. 6. The North American Industry Classification System (NAICS) code 236220 places this contract within the commercial and institutional building construction sector.

Value Assessment

Rating: good

The contract value of $5.45 million for a building renovation appears reasonable for a project of this scale, especially given the firm fixed-price structure which caps government expenditure. Benchmarking against similar large-scale institutional building renovations would provide a clearer picture of value for money. The absence of specific performance metrics in the provided data makes a definitive value assessment challenging, but the fixed-price nature is a positive indicator for cost control.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'full and open competition after exclusion of sources.' This indicates that while the competition was intended to be open, certain sources were excluded, suggesting a potentially narrowed field of bidders. The number of bidders (8) is a healthy sign of interest, but the exclusion clause warrants further investigation to understand its impact on the breadth of competition and potential price discovery.

Taxpayer Impact: While the competition was not fully open, the presence of 8 bidders suggests that taxpayers likely benefited from competitive pricing. However, understanding the rationale behind the source exclusion is crucial to ensure maximum taxpayer value was achieved.

Public Impact

Veterans and VA staff will benefit from improved facilities at the B9 building. The renovation services will directly impact the operational capacity and environment of the Department of Veterans Affairs. The project's geographic impact is localized to the New York area where the B9 facility is located. The construction workforce in the New York region will be engaged for the duration of the renovation project.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep in renovation projects, which could impact the final cost despite the fixed-price contract.
The 'exclusion of sources' clause in the competition method could limit overall market competition.
Ensuring timely completion within the 727-day duration is critical to avoid service disruptions.
Adequate oversight will be needed to ensure the quality of construction meets VA standards.

Positive Signals

The firm fixed-price contract type provides cost certainty for the government.
Awarding to a single contractor (Welch Construction Inc.) can streamline project management and communication.
The Department of Veterans Affairs has a clear need for facility renovation, indicating strategic alignment.
A defined contract duration (727 days) sets clear expectations for project completion.

Sector Analysis

This contract falls within the commercial and institutional building construction sector, a vital part of the broader construction industry. This sector encompasses the building and renovation of non-residential structures like government facilities, hospitals, and educational institutions. The total federal spending on construction services is substantial, with NAICS code 236220 representing a significant portion of this expenditure. This specific award to Welch Construction Inc. contributes to the overall activity within this market segment.

Small Business Impact

The provided data indicates that small business participation (sb: false) was not a specific set-aside requirement for this contract. Therefore, there are no direct subcontracting implications mandated by a small business set-aside. However, the prime contractor, Welch Construction Inc., may still engage small businesses as subcontractors, contributing to the broader small business ecosystem. Further analysis would be needed to determine if subcontracting plans were part of the bid.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of Veterans Affairs' contracting officers and project managers. Accountability measures are inherent in the firm fixed-price contract, where the contractor is responsible for delivering the specified renovation within the agreed-upon price and timeline. Transparency is generally maintained through contract award databases, though specific project oversight details are not provided. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Department of Veterans Affairs Facility Renovation Projects
Federal Construction Contracts
Commercial Building Construction Services
Institutional Building Construction

Risk Flags

Potential for cost overruns due to unforeseen site conditions.
Risk of quality compromise in a firm fixed-price contract.
Limited competition due to 'exclusion of sources' clause.
Project delays impacting service delivery.
Contractor performance issues.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $5.5 million to WELCH CONSTRUCTION INC.. RENOVATE B9

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 $5.5 million.

What is the period of performance?

Start: 2025-02-14. End: 2027-02-11.

What is the track record of Welch Construction Inc. with federal contracts, particularly with the Department of Veterans Affairs?

A review of federal contract databases would be necessary to fully assess Welch Construction Inc.'s track record. This would involve examining past performance on similar renovation projects, their history of on-time and on-budget delivery, and any past performance issues or awards. Specifically, their experience with the Department of Veterans Affairs would be a key indicator of their suitability for this project, as VA facilities often have unique requirements. Without specific historical data on Welch Construction Inc.'s federal contract performance, it is difficult to provide a detailed assessment of their reliability and expertise.

How does the awarded price of $5.45 million compare to similar VA building renovation projects?

To benchmark the $5.45 million award, one would need to compare it against the contract values of similar-sized building renovations undertaken by the Department of Veterans Affairs or other federal agencies. Key comparison points would include the square footage being renovated, the complexity of the work (e.g., structural, MEP, finishes), and the geographic location, as construction costs vary regionally. If data on comparable projects is available, it would reveal whether this contract represents a fair market price or if it is potentially high or low relative to industry standards for similar scope and quality.

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

The primary risk for the government in a firm fixed-price contract is that the contractor may cut corners on quality or materials to maintain profitability if unforeseen issues arise during the renovation. For Welch Construction Inc., the risk lies in accurately estimating all costs and potential challenges within the fixed price; any significant cost overruns due to unforeseen site conditions, material price escalations, or scope creep would be absorbed by the contractor. The 'exclusion of sources' in the competition also presents a risk if it inadvertently excluded highly capable contractors, potentially leading to suboptimal pricing or performance.

What is the expected impact of this renovation on the VA's service delivery capabilities?

The renovation of Building B9 is expected to enhance the VA's service delivery capabilities by providing a modernized and potentially more functional space. This could lead to improved patient comfort, better workflow for staff, and the ability to accommodate new or expanded services. The duration of 727 days suggests a significant overhaul, which, while potentially disruptive during construction, should ultimately result in a facility better equipped to meet the needs of veterans and staff. The specific services housed in B9 will determine the precise nature of the impact.

How has federal spending on commercial and institutional building construction (NAICS 236220) trended in recent years?

Federal spending on commercial and institutional building construction, categorized under NAICS 236220, has generally seen fluctuations influenced by infrastructure initiatives, agency modernization needs, and overall economic conditions. Historically, periods of increased federal investment in facilities, such as post-recession stimulus or specific agency build-out programs, lead to higher spending. Conversely, budget constraints or shifts in priorities can lead to decreased investment. Analyzing year-over-year data for this NAICS code would reveal trends, such as whether spending has been increasing, decreasing, or remaining stable, providing context for the $5.45 million award.

What does the 'exclusion of sources' in the contract's competition method imply for taxpayer value?

The 'exclusion of sources' clause implies that the competition, while intended to be open, was not fully open to all potential bidders. This could mean that certain types of contractors or specific companies were deliberately excluded from bidding. While the goal might be to ensure specialized capabilities or compliance with specific requirements, it carries a risk of limiting the competitive pool. If the exclusion was too broad or not well-justified, it could lead to less competitive pricing than a truly open competition, potentially resulting in less value for taxpayers. Conversely, if the exclusion targeted specific risks or ensured a highly qualified pool, it could lead to better project outcomes.

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: 36C24225B0006

Offers Received: 8

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: $5,451,658

Exercised Options: $5,451,658

Current Obligation: $5,451,658

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline