VA Awards $10.3M Contract to KMK Construction for Cancer Center Construction in Virginia

Contract Overview

Contract Amount: $10,337,350 ($10.3M)

Contractor: KMK Construction, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2020-01-10

End Date: 2025-03-03

Contract Duration: 1,879 days

Daily Burn Rate: $5.5K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: CONSTRUCTION SERVICES TO COMPLETE PROJECT 652-318, CONSTRUCT CANCER CENTER.

Place of Performance

Location: RICHMOND, RICHMOND CITY County, VIRGINIA, 23249

State: Virginia Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $10.3 million to KMK CONSTRUCTION, INC. for work described as: CONSTRUCTION SERVICES TO COMPLETE PROJECT 652-318, CONSTRUCT CANCER CENTER. Key points: 1. The contract is for construction services to complete Project 652-318, a cancer center. 2. KMK Construction, Inc. is the awarded contractor. 3. The contract was awarded by the Department of Veterans Affairs. 4. The total value of the contract is $10,337,349.63. 5. The contract type is Firm Fixed Price.

Value Assessment

Rating: good

The contract value of $10.3M for a cancer center construction project appears reasonable given the scope. Benchmarking against similar large-scale healthcare construction projects would provide a more precise assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating a limited competition. This method might impact price discovery compared to unrestricted full and open competition.

Taxpayer Impact: Taxpayer funds are being used for a critical healthcare infrastructure project. The limited competition aspect warrants scrutiny to ensure value for money.

Public Impact

Improved healthcare facilities for veterans, specifically a new cancer center. Potential for job creation during the construction phase. Economic impact on the local Virginia economy through construction activities and material sourcing.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition raises concerns about potential overpricing.
Contract duration of 1879 days (over 5 years) is substantial for construction.
No small business participation noted.

Positive Signals

Addresses a critical healthcare need for veterans.
Firm Fixed Price contract provides cost certainty.
Awarded by a major federal agency (VA).

Sector Analysis

This contract falls under the Commercial and Institutional Building Construction sector. Federal spending in this sector often involves large, complex projects with significant taxpayer investment. Benchmarks vary widely based on project type and location.

Small Business Impact

The data indicates no small business participation in this contract. For large construction projects, it's common for prime contractors to subcontract, offering opportunities for small businesses. Further analysis would be needed to determine if subcontracting plans were required or met.

Oversight & Accountability

The Department of Veterans Affairs is responsible for oversight. The 'Full and Open Competition After Exclusion of Sources' method suggests a specific justification was made, which should be documented and auditable to ensure accountability.

Related Government Programs

Commercial and Institutional Building Construction
Department of Veterans Affairs Contracting
Department of Veterans Affairs Programs

Risk Flags

Limited competition may lead to higher costs.
Long contract duration increases exposure to economic fluctuations.
No small business participation noted.
Potential for scope creep or change orders over a long project timeline.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $10.3 million to KMK CONSTRUCTION, INC.. CONSTRUCTION SERVICES TO COMPLETE PROJECT 652-318, CONSTRUCT CANCER CENTER.

Who is the contractor on this award?

The obligated recipient is KMK 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 $10.3 million.

What is the period of performance?

Start: 2020-01-10. End: 2025-03-03.

What was the specific justification for excluding sources in this full and open competition, and how did it impact the final price?

The justification for excluding sources under this 'Full and Open Competition After Exclusion of Sources' award is not detailed in the provided data. Typically, such exclusions are based on specific technical requirements, unique capabilities, or national security concerns. Understanding this justification is crucial to assessing whether it legitimately narrowed the field or potentially limited competitive pressure, which could influence the final price paid by taxpayers.

What are the key performance indicators (KPIs) for this cancer center construction project, and how will their achievement be measured to ensure effectiveness?

Key performance indicators for a construction project of this magnitude typically include adherence to schedule, budget, quality standards, and safety regulations. The effectiveness of the cancer center's construction will be measured by the VA's successful acceptance of the completed facility, its compliance with all design specifications, and its readiness for operational use. Regular site inspections, progress reports, and milestone reviews by the contracting officer's representative are standard mechanisms for monitoring and ensuring effectiveness.

Given the 5-year duration and limited competition, what are the primary risks to the government regarding cost overruns or schedule delays?

The primary risks to the government include potential cost overruns due to inflation over the 5-year period, unforeseen site conditions, or changes in material costs, especially with a Firm Fixed Price contract. Schedule delays could arise from contractor performance issues, weather, or permitting challenges. The limited competition might exacerbate these risks if the chosen contractor faces performance issues, as finding and onboarding a replacement could be more complex and time-consuming.

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 AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SEALED BID

Solicitation ID: 36C24619B0040

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 384 HAROLD L DOW HWY STE 28, ELIOT, ME, 03903

Business Categories: Category Business, Corporate Entity Not Tax Exempt, HUBZone Firm, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $10,337,350

Exercised Options: $10,337,350

Current Obligation: $10,337,350

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline