VA awards $8.7M construction contract to Serviam Construction LLC for 48-hour demo and rebuild

Contract Overview

Contract Amount: $8,730,335 ($8.7M)

Contractor: Serviam Construction LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2024-09-23

End Date: 2026-03-22

Contract Duration: 545 days

Daily Burn Rate: $16.0K/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: 6E 48 HOUR DEMO AND REBUILD

Place of Performance

Location: PITTSBURGH, ALLEGHENY County, PENNSYLVANIA, 15261

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $8.7 million to SERVIAM CONSTRUCTION LLC for work described as: 6E 48 HOUR DEMO AND REBUILD Key points: 1. Contract value appears reasonable for a 48-hour demo and rebuild 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 is 545 days, indicating a significant scope beyond the initial demo/rebuild. 5. The award is a Definitive Contract, typically used for long-term agreements. 6. The North American Industry Classification System (NAICS) code 236220 points to commercial building construction.

Value Assessment

Rating: good

The contract value of $8.7 million for a 48-hour demo and rebuild, with a total duration of 545 days, seems within a reasonable range for commercial and institutional building construction. Benchmarking against similar projects would provide a more precise value-for-money assessment. The Firm Fixed Price contract type indicates that the contractor bears the financial risk for cost overruns, which is generally favorable for the government.

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,' indicating that the solicitation was made available to all responsible prospective contractors. The presence of 3 bids suggests a moderate level of competition, which is generally conducive to fair pricing and value discovery.

Taxpayer Impact: The use of full and open competition is beneficial for taxpayers as it encourages multiple bidders to offer their best pricing and technical solutions, leading to potentially lower costs and higher quality outcomes.

Public Impact

The Department of Veterans Affairs (VA) is the primary beneficiary, receiving updated facilities. The project involves commercial and institutional building construction, likely for a VA facility. The geographic impact is centered in Pennsylvania, where the contract is being performed. The project will likely involve a construction workforce, creating employment opportunities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The '48 HOUR DEMO AND REBUILD' description might be a specific phase or requirement within a larger project, and the full scope needs further clarification.
The exclusion of sources in the competition type warrants a closer look to ensure no potential bidders were unfairly prevented from participating.

Positive Signals

The use of 'Full and Open Competition' is a positive signal for a robust bidding process.
The Firm Fixed Price contract type effectively transfers cost overrun risk to the contractor.
The award to Serviam Construction LLC, a named entity, suggests a clear path for execution.

Sector Analysis

This contract falls under the Commercial and Institutional Building Construction sector (NAICS 236220). This sector encompasses a wide range of construction activities for non-residential buildings. The federal government is a significant consumer of construction services, with spending often driven by infrastructure needs, facility upgrades, and new construction for various agencies. Benchmarks for similar projects would typically consider factors like building size, complexity, location, and specific construction requirements.

Small Business Impact

The data indicates that small business participation was not a specific set-aside for this contract (ss: false, sb: false). Therefore, the direct impact on small business set-asides is minimal. However, the prime contractor, Serviam Construction LLC, may engage small businesses as subcontractors, which would contribute to the small business ecosystem. Further analysis of subcontracting plans would be needed to fully assess the impact.

Oversight & Accountability

Oversight for this contract will primarily reside with the Department of Veterans Affairs (VA). The VA has established procurement regulations and contract management processes to ensure compliance and performance. The Firm Fixed Price nature of the contract provides a degree of accountability for the contractor regarding cost. Transparency would be enhanced by public access to contract performance reports and any Inspector General findings related to this award.

Related Government Programs

VA Facility Modernization Projects
Federal Building Construction Contracts
Commercial Construction Services
Institutional Building Construction

Risk Flags

Potential for unforeseen site conditions impacting cost and schedule.
Risk of quality compromises if contractor faces cost pressures on FFP contract.
Justification for 'Exclusion of Sources' needs verification to ensure fair competition.
Dependence on contractor's ability to manage complex demolition and rebuild phases.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $8.7 million to SERVIAM CONSTRUCTION LLC. 6E 48 HOUR DEMO AND REBUILD

Who is the contractor on this award?

The obligated recipient is SERVIAM CONSTRUCTION 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 $8.7 million.

What is the period of performance?

Start: 2024-09-23. End: 2026-03-22.

What is the specific nature of the '48 HOUR DEMO AND REBUILD' and how does it relate to the overall 545-day project duration?

The description '6E 48 HOUR DEMO AND REBUILD' likely refers to a critical, time-sensitive phase within the larger construction project. This could involve the rapid removal of existing structures or systems followed by the immediate installation of new ones, possibly to minimize disruption to ongoing operations or to meet a strict deadline. The 545-day duration suggests that this 48-hour event is a component of a much broader renovation, expansion, or new construction effort. Understanding the full scope of work beyond this specific phase is crucial for a comprehensive assessment of the contract's value and objectives. Further details on the project's overall goals, the specific facility being worked on, and the subsequent construction phases would clarify the significance of this rapid turnaround requirement.

How does the awarded amount of $8.7 million compare to similar VA construction projects of comparable scope and complexity?

To benchmark the $8.7 million award, one would typically compare it against recently awarded VA construction contracts for similar types of facilities (e.g., medical centers, administrative buildings) and project scopes (e.g., renovations, new builds, specific system upgrades). Factors such as square footage, complexity of systems being installed or replaced, geographic location (which influences labor and material costs), and the specific challenges of the site are critical. Without access to a detailed database of comparable VA construction projects with granular cost data, a precise comparison is difficult. However, for a project involving a significant demo and rebuild, $8.7 million could be considered a substantial but potentially reasonable investment, especially if it involves critical infrastructure or specialized medical facilities. The Firm Fixed Price nature also suggests the government has secured a ceiling cost.

What are the potential risks associated with a Firm Fixed Price contract for a project of this nature, and how are they mitigated?

Firm Fixed Price (FFP) contracts place the primary risk of cost overruns on the contractor. For a project involving demolition and rebuilding, potential risks include unforeseen site conditions (e.g., hazardous materials, structural issues), material price fluctuations, labor shortages, and delays caused by external factors. The main risk for the government is that the contractor might cut corners on quality or safety to maintain profitability if costs escalate unexpectedly. Mitigation strategies employed by the VA would typically include thorough pre-bid site investigations, detailed scope definition, robust contract administration, clear quality assurance and inspection protocols, and potentially performance bonds. The contractor's own risk management practices, including accurate estimating and contingency planning, are also key to successful FFP execution.

What does the 'After Exclusion of Sources' clause in the competition type imply, and were there valid justifications for excluding potential bidders?

The phrase 'Full and Open Competition After Exclusion of Sources' is somewhat contradictory and requires careful interpretation. Typically, 'Full and Open Competition' means all responsible sources are allowed to compete. The addition of 'After Exclusion of Sources' suggests that while the competition was intended to be broad, certain sources may have been excluded based on specific, documented justifications. This could be due to reasons like the need for specific technical expertise, proprietary technology, or urgent requirements where only a limited number of contractors could realistically perform. The VA would need to have documented and justified these exclusions according to federal acquisition regulations. Without knowing the specific reasons for exclusion, it's difficult to assess if this limited the competitive landscape unfairly or if it was a necessary measure for project success.

What is Serviam Construction LLC's track record with the Department of Veterans Affairs and similar federal agencies?

Assessing Serviam Construction LLC's track record would involve reviewing their past performance on federal contracts, particularly with the VA. Key indicators include contract completion history (on time and within budget), past performance evaluations, any history of disputes or litigation, and the types and sizes of projects they have successfully managed. A contractor with a strong history of successful performance on similar construction projects for the VA or other federal agencies would generally be considered a lower risk. Conversely, a history of performance issues or contract terminations would raise concerns. Specific details on Serviam's past performance ratings and project history would be necessary for a thorough assessment.

How does the $8.7 million spending on this single contract fit into the VA's overall annual construction budget and priorities?

The $8.7 million allocated to this specific contract represents a portion of the VA's overall construction budget, which can fluctuate annually based on appropriations and strategic priorities. The VA's construction budget is typically driven by the need to maintain, modernize, and expand its vast network of healthcare facilities and other infrastructure. Large-scale projects like this one are often planned years in advance and align with the VA's capital investment plans. Understanding how this project fits into the VA's broader capital plan – whether it addresses critical infrastructure needs, enhances patient care capacity, or improves operational efficiency – provides context for the significance of this expenditure relative to the agency's overall mission and resource allocation.

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: 36C24423R0148

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2304 BROAD AVE, ALTOONA, PA, 16601

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Economically Disadvantaged Women Owned Small Business, Limited Liability Corporation, Self-Certified Small Disadvantaged Business, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business, Woman Owned Business, Women Owned Small Business

Financial Breakdown

Contract Ceiling: $8,730,335

Exercised Options: $8,730,335

Current Obligation: $8,730,335

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline