VA awards $9.8M for water main renovation, with 3 bidders competing for firm-fixed-price contract

Contract Overview

Contract Amount: $9,856,421 ($9.9M)

Contractor: Richard Group LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2022-05-16

End Date: 2026-04-24

Contract Duration: 1,439 days

Daily Burn Rate: $6.8K/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: RENOVATE WATER MAINS

Place of Performance

Location: MIAMI, MIAMI-DADE County, FLORIDA, 33125

State: Florida Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $9.9 million to RICHARD GROUP LLC for work described as: RENOVATE WATER MAINS Key points: 1. Contract value appears reasonable given the scope of infrastructure work. 2. Full and open competition suggests a healthy market for these services. 3. Fixed-price contract shifts risk to the contractor. 4. Contract duration is substantial, indicating a complex project. 5. Geographic focus on Florida may indicate regional infrastructure needs. 6. No small business set-aside noted, potentially limiting smaller firm participation.

Value Assessment

Rating: good

The contract value of approximately $9.86 million for water main renovation seems within a reasonable range for a project of this scale and duration. Benchmarking against similar infrastructure projects managed by the VA or other federal agencies would provide a more precise value-for-money assessment. The firm-fixed-price structure is generally favorable for the government when the scope is well-defined, as it caps the contractor's potential earnings and transfers cost overrun risk. However, without detailed project specifications, a definitive comparison is challenging.

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 broadly advertised, and multiple responsible sources were permitted to submit offers. The presence of three bidders suggests a moderate level of competition for this specific contract. While three bidders are better than one or two, a higher number could potentially drive prices down further and increase the likelihood of innovative solutions.

Taxpayer Impact: The competitive nature of this award is beneficial for taxpayers, as it likely resulted in a more competitive price than a sole-source or limited competition scenario. The government secured a price through a process that allowed multiple firms to vie for the work.

Public Impact

Veterans in Florida will benefit from improved water infrastructure at VA facilities. The contract will deliver essential upgrades to aging water main systems. The project's geographic impact is concentrated in Florida. Construction and skilled trades workforce in Florida will likely see employment opportunities. Ensures reliable water service for healthcare operations and facility occupants.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Contract duration of nearly four years (1439 days) could lead to potential delays or cost escalations if not managed effectively.
Firm-fixed-price contracts can sometimes lead to contractors cutting corners on quality if not rigorously overseen.
Lack of specific small business participation goals might mean missed opportunities for smaller, specialized firms.

Positive Signals

Full and open competition indicates a robust market and potential for competitive pricing.
The firm-fixed-price contract type transfers cost overrun risk to the contractor.
The contract is awarded to a specific entity (RICHARD GROUP LLC), implying a selection based on qualifications and price.

Sector Analysis

The construction sector, particularly commercial and institutional building construction, is a significant area of federal spending. This contract falls under the broader category of infrastructure development and maintenance, which is crucial for government facilities. The market for water system upgrades is substantial, driven by aging infrastructure across the nation. Federal agencies like the VA often require specialized construction services to maintain and modernize their extensive real estate portfolios.

Small Business Impact

The contract was not awarded as a small business set-aside, and the data does not indicate any specific subcontracting goals for small businesses. This suggests that the primary award went to a larger entity, and opportunities for small businesses would likely be through subcontracting if Richard Group LLC chooses to engage them. The absence of set-aside requirements means that the competition was open to all eligible firms, potentially overlooking smaller businesses that might specialize in certain aspects of water main renovation.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Veterans Affairs' contracting and project management offices. As a definitive contract, it implies a structured agreement with defined terms. Accountability measures are inherent in the firm-fixed-price structure, which incentivizes the contractor to complete the work within budget. Transparency is generally facilitated through federal contract databases, though detailed project progress reports may not always be publicly available. The Inspector General's office for the VA would have jurisdiction over any potential fraud, waste, or abuse related to this contract.

Related Government Programs

VA Facility Maintenance and Repair
Federal Infrastructure Projects
Public Works Construction Contracts
Water System Upgrades

Risk Flags

Long contract duration may increase risk of delays or cost overruns.
Potential for quality issues if contractor prioritizes speed over thoroughness on FFP contract.
Lack of explicit small business subcontracting goals.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $9.9 million to RICHARD GROUP LLC. RENOVATE WATER MAINS

Who is the contractor on this award?

The obligated recipient is RICHARD GROUP 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 $9.9 million.

What is the period of performance?

Start: 2022-05-16. End: 2026-04-24.

What is the track record of RICHARD GROUP LLC in performing similar federal construction contracts?

Information regarding RICHARD GROUP LLC's specific track record on federal contracts, particularly those involving water main renovation, is not detailed in the provided data. A comprehensive assessment would require reviewing their past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), contract history with federal agencies, and any reported issues or successes on similar projects. Without this data, it's difficult to definitively assess their capability and reliability for this specific $9.86 million undertaking. Federal agencies typically consider past performance as a key factor in source selection, especially for complex infrastructure projects.

How does the awarded price compare to similar water main renovation projects by the VA or other federal agencies?

The provided data does not include specific cost breakdowns or unit pricing that would allow for a direct comparison to similar projects. The total award of $9.86 million is for a definitive contract with a duration of 1439 days (approximately 4 years), suggesting a significant scope. To benchmark effectively, one would need to analyze the square footage of pipe replaced, the complexity of the terrain, the type of materials used, and the labor costs associated with comparable projects undertaken by agencies like the General Services Administration (GSA) or the Army Corps of Engineers. The firm-fixed-price nature suggests the price was determined upfront, but its competitiveness relies on the accuracy of the initial estimates and the market conditions at the time of bidding.

What are the primary risks associated with a firm-fixed-price contract for water main renovation over a four-year period?

The primary risks with a firm-fixed-price (FFP) contract for a long-duration project like water main renovation include potential scope creep if not managed tightly, unforeseen site conditions (e.g., encountering unexpected utilities, soil instability), and material price escalation over the four-year period. While FFP shifts cost overrun risk to the contractor, a poorly defined scope or unforeseen issues could lead to disputes, delays, or the contractor seeking change orders. For the government, the risk lies in potentially paying a premium upfront to cover the contractor's risk contingency, and ensuring the contractor maintains quality standards throughout the extended performance period without compromising the work.

What is the expected effectiveness of this contract in ensuring reliable water service at VA facilities in Florida?

The effectiveness of this contract in ensuring reliable water service hinges on the successful execution of the water main renovation by RICHARD GROUP LLC according to the contract specifications and schedule. The project aims to replace or repair aging infrastructure, which is a direct cause of service disruptions and potential contamination. Assuming the project is completed as intended, it should significantly enhance the reliability and safety of the water supply to the affected VA facilities. The long duration suggests a comprehensive approach to the renovation, potentially addressing multiple segments of the water distribution system, thereby contributing to sustained operational effectiveness of the facilities.

How has federal spending on commercial and institutional building construction, specifically for infrastructure like water systems, trended in recent years?

Federal spending on commercial and institutional building construction, including infrastructure projects like water systems, has generally seen fluctuations influenced by economic conditions, infrastructure initiatives, and agency-specific needs. Post-2020, there has been a renewed focus on infrastructure investment, potentially increasing demand and funding for such projects. Agencies like the VA, managing vast real estate portfolios, consistently require significant capital investment for maintenance, repair, and upgrades. While specific data for water system construction isn't isolated here, the overall trend in federal construction spending reflects a commitment to maintaining and modernizing government facilities and infrastructure, often prioritizing projects that ensure operational continuity and safety.

What is the significance of the contract type 'DEFINITIVE CONTRACT' in this context?

A 'Definitive Contract' is a standard, fully warranted contract that is legally binding and contains all the terms and conditions agreed upon by the parties. In this case, it signifies a formal agreement between the Department of Veterans Affairs and RICHARD GROUP LLC for the renovation of water mains. Unlike indefinite-delivery/indefinite-quantity (IDIQ) contracts, a definitive contract typically specifies the exact scope, price, and delivery schedule upfront. This implies that the requirements for the water main renovation were well-defined at the time of award, allowing for a fixed price and a set period of performance, which is suitable for projects with predictable needs and timelines.

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: 36C24822R0026

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1944 LEHIGH AVE STE A, GLENVIEW, IL, 60026

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

Financial Breakdown

Contract Ceiling: $9,856,421

Exercised Options: $9,856,421

Current Obligation: $9,856,421

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline