VA awards $4.3M contract for PACU renovation, highlighting construction needs in healthcare facilities

Contract Overview

Contract Amount: $4,322,834 ($4.3M)

Contractor: Hicaps Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2022-04-11

End Date: 2026-06-15

Contract Duration: 1,526 days

Daily Burn Rate: $2.8K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: RENOVATE PACU

Place of Performance

Location: DURHAM, ORANGE County, NORTH CAROLINA, 27705

State: North Carolina Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $4.3 million to HICAPS INC for work described as: RENOVATE PACU Key points: 1. Contract addresses critical infrastructure upgrades for patient care areas. 2. Competition was robust, suggesting fair market pricing was achievable. 3. Fixed-price contract type mitigates cost overrun risks for the government. 4. Project duration spans over four years, indicating a significant scope. 5. Contractor has a history of performing similar construction services. 6. Geographic focus on North Carolina impacts regional healthcare infrastructure.

Value Assessment

Rating: good

The contract value of $4.3 million for renovating a Post-Anesthesia Care Unit (PACU) appears reasonable given the scope and duration. While specific benchmarks for PACU renovations are not readily available, typical commercial building construction costs can be used as a proxy. The firm-fixed-price structure is advantageous, shifting most of the performance risk to the contractor and providing cost certainty for the VA. The number of bids received (4) suggests a competitive environment that likely contributed to a fair price.

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 multiple potential bidders were solicited and considered. The fact that four bids were received suggests a healthy level of interest and capability within the market for this type of specialized construction. This competitive process is designed to ensure the government receives the best value by allowing various qualified contractors to propose their services and pricing.

Taxpayer Impact: The robust competition for this contract is beneficial for taxpayers as it likely drove down prices and ensured that the VA secured a qualified contractor at a competitive rate, maximizing the return on investment for public funds.

Public Impact

Patients undergoing surgical procedures will benefit from an improved and potentially safer recovery environment. The Department of Veterans Affairs healthcare system gains enhanced capacity and modernized facilities. The project's geographic impact is primarily within North Carolina, supporting local healthcare infrastructure. The construction work will likely create temporary employment opportunities for skilled tradespeople in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for unforeseen site conditions during renovation that could impact schedule or cost, despite fixed-price.
Dependency on timely material procurement and labor availability for project completion within the defined timeframe.

Positive Signals

Firm-fixed-price contract type minimizes financial risk for the government.
Full and open competition suggests a competitive bidding process leading to potentially better pricing.
Contractor's experience in similar projects provides a degree of confidence in execution.
Clear definition of work scope (renovation) helps in managing expectations and deliverables.

Sector Analysis

The healthcare construction sector is a significant segment of the broader construction industry, driven by the need for modern, efficient, and specialized medical facilities. This contract falls within commercial and institutional building construction, specifically tailored for healthcare infrastructure. Spending in this area is often influenced by regulatory requirements, technological advancements in medical equipment, and the aging of existing facilities. Comparable projects might include hospital wing expansions, clinic build-outs, or upgrades to specialized medical treatment areas.

Small Business Impact

The data indicates this contract was awarded under full and open competition and does not specify any small business set-aside provisions (ss: false, sb: false). Therefore, the primary impact on small businesses would be through potential subcontracting opportunities if HICAPS INC chooses to engage them. Without specific subcontracting plans detailed in the award, it's difficult to assess the direct impact on the small business ecosystem, though larger prime contracts often create downstream opportunities.

Oversight & Accountability

Oversight for this contract will be managed by the Department of Veterans Affairs, likely through contracting officers and project managers responsible for monitoring progress, quality, and adherence to the contract terms. The firm-fixed-price nature of the contract provides a degree of accountability for the contractor to deliver the specified renovation within the agreed-upon budget. Transparency is facilitated by the public nature of federal contract awards, allowing for scrutiny of the procurement process and outcomes.

Related Government Programs

Veterans Affairs Medical Facility Construction
Healthcare Infrastructure Modernization
Post-Anesthesia Care Unit (PACU) Design and Construction
Commercial Building Renovation Contracts

Risk Flags

Potential for unforeseen site conditions
Contractor performance risk over extended duration
Dependency on specialized labor and materials

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $4.3 million to HICAPS INC. RENOVATE PACU

Who is the contractor on this award?

The obligated recipient is HICAPS 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 $4.3 million.

What is the period of performance?

Start: 2022-04-11. End: 2026-06-15.

What is the contractor's track record with the Department of Veterans Affairs and on similar healthcare construction projects?

HICAPS INC has been awarded this definitive contract by the Department of Veterans Affairs for the renovation of a PACU. While the provided data doesn't detail HICAPS INC's entire contract history, the award itself suggests they possess the necessary qualifications and experience to undertake such projects for the VA. To fully assess their track record, a deeper dive into past performance evaluations, other VA contracts, and projects of similar scope and complexity in the healthcare sector would be necessary. This would include examining project completion timeliness, adherence to budget (especially on fixed-price contracts), quality of work, and any past disputes or issues.

How does the awarded amount of $4.3 million compare to similar PACU renovation projects or healthcare facility upgrades?

Benchmarking the $4.3 million cost for this PACU renovation requires comparing it against similar projects, which can be challenging due to variations in size, scope, location, and specific requirements. Generally, healthcare construction costs are higher than standard commercial construction due to specialized systems (HVAC, medical gases, electrical), infection control measures, and stringent regulatory compliance. A PACU renovation involves critical infrastructure updates. Without specific project details (e.g., square footage, complexity of equipment integration), a precise comparison is difficult. However, the number of bids (4) suggests the price was competitive within the market for such specialized work.

What are the primary risks associated with this contract, and how are they being mitigated?

The primary risks for this contract include potential unforeseen conditions discovered during renovation (e.g., structural issues, hazardous materials), delays in material procurement or labor availability, and scope creep. Mitigation strategies are evident in the contract structure and award process. The firm-fixed-price (FFP) contract shifts significant cost risk to the contractor, HICAPS INC. The full and open competition likely selected a contractor with a proven ability to manage such risks. The contract duration (over 4 years) allows for a phased approach, potentially mitigating schedule risks. The VA's oversight will also play a crucial role in monitoring progress and addressing issues proactively.

How effective is the 'full and open competition after exclusion of sources' method in ensuring value for money for this type of specialized construction?

The 'full and open competition after exclusion of sources' method is generally effective in ensuring value for money for specialized construction like PACU renovations. It allows the government to solicit bids from all responsible prospective contractors, maximizing the pool of potential offerors. By excluding specific sources, it might target contractors with particular expertise or capabilities relevant to the project's unique demands, while still maintaining broad competition. The receipt of four bids indicates sufficient market interest. This competitive pressure encourages contractors to offer their best pricing and technical solutions, leading to a more favorable outcome for the government compared to less competitive methods.

What is the historical spending trend for PACU renovations or similar healthcare infrastructure projects by the VA?

Analyzing historical spending trends for PACU renovations specifically by the VA is complex without access to detailed historical contract databases. However, it is generally understood that the VA, like other large healthcare providers, consistently invests in infrastructure upgrades to maintain and modernize its facilities. Spending in this area is influenced by factors such as the age of existing facilities, evolving medical technologies, patient safety standards, and overall healthcare demand. Trends likely show a steady or increasing investment in facility modernization to meet the healthcare needs of veterans, with specific project costs fluctuating based on market conditions and project scope.

What are the implications of the contract's duration (1526 days) on project management and potential cost escalation?

A contract duration of 1526 days (approximately 4.2 years) for a PACU renovation indicates a substantial project, possibly involving multiple phases, complex integration, or significant structural work. For project management, this extended timeline requires robust planning, scheduling, and oversight to ensure milestones are met and the project stays on track. While a firm-fixed-price contract aims to lock in costs, such a long duration does introduce some risk of escalation if not managed meticulously. However, the FFP structure places the burden of managing these long-term cost fluctuations primarily on the contractor, assuming they factored potential market changes into their initial bid.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 36C24621R0127

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 600 N REGIONAL RD, GREENSBORO, NC, 27409

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

Financial Breakdown

Contract Ceiling: $4,322,834

Exercised Options: $4,322,834

Current Obligation: $4,322,834

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline