VA awards $17.6M facilities support contract to Holitna Construction, LLC for 3-year term

Contract Overview

Contract Amount: $17,647,566 ($17.6M)

Contractor: Holitna Construction, LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2023-10-01

End Date: 2026-09-30

Contract Duration: 1,095 days

Daily Burn Rate: $16.1K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: FF&E SUPPORT SERVICES

Place of Performance

Location: PALO ALTO, SANTA CLARA County, CALIFORNIA, 94304

State: California Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $17.6 million to HOLITNA CONSTRUCTION, LLC for work described as: FF&E SUPPORT SERVICES Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract type is a firm-fixed-price definitive contract, which shifts cost risk to the contractor. 3. The duration of 1095 days (3 years) provides a stable period for service delivery. 4. The award amount of $17.6 million over three years averages approximately $5.88 million annually. 5. The North American Industry Classification System (NAICS) code 561210 indicates a focus on facilities support services. 6. The contract was awarded by the Department of Veterans Affairs, indicating services for veteran facilities. 7. The contract was awarded in California, suggesting a specific geographic focus for the services.

Value Assessment

Rating: good

The contract value of $17.6 million over three years for facilities support services appears reasonable given the scope. Benchmarking against similar large-scale facilities support contracts awarded 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 cost control when the scope is well-defined. Without specific performance metrics or detailed service breakdowns, a definitive assessment of cost-effectiveness is challenging, but the competitive award process is a positive indicator.

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,' which indicates that the solicitation was broadly advertised and all responsible sources were permitted to submit offers. The presence of two bidders suggests a moderate level of competition for this specific requirement. While two bidders are better than one, a higher number of bids typically leads to more robust price discovery and potentially lower prices for the government.

Taxpayer Impact: The competitive nature of this award, even with two bidders, is beneficial for taxpayers as it likely resulted in a more competitive price than a sole-source or limited competition scenario.

Public Impact

Veterans utilizing facilities managed and maintained under this contract will benefit from improved operational environments. The contract ensures the provision of essential facilities support services, contributing to the smooth operation of VA facilities. Services are geographically focused within California, impacting VA facilities and potentially the local workforce in that state. The contract supports jobs within the facilities management and maintenance sector, likely benefiting skilled trades and support personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if initial requirements are not precisely defined, leading to cost overruns.
Dependence on a single contractor for critical facilities support could pose a risk if performance issues arise.
Ensuring consistent service quality across the 3-year duration requires diligent oversight.

Positive Signals

Firm-fixed-price contract shifts cost risk to the contractor, encouraging efficient service delivery.
Full and open competition suggests a fair and transparent procurement process.
The 3-year term provides stability for both the contractor and the agency.

Sector Analysis

Facilities Support Services represent a significant segment within the broader professional, scientific, and technical services sector. This contract falls under NAICS code 561210, encompassing a range of activities from building operation and maintenance to groundskeeping and cleaning. The federal government is a major consumer of these services, with spending often concentrated in areas with large federal installations or agency headquarters. Comparable spending benchmarks would involve analyzing other large-scale facilities management contracts awarded to private entities by various federal agencies, particularly those managing extensive real estate portfolios.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, the primary contractor, Holitna Construction, LLC, is likely a large business. There is no explicit information provided regarding subcontracting plans for small businesses. Without this information, it is difficult to assess the direct impact on the small business ecosystem. However, large prime contracts often include subcontracting goals, which could provide opportunities for small businesses if effectively managed.

Oversight & Accountability

Oversight for this contract will primarily reside with the Department of Veterans Affairs contracting officer and their representatives. The firm-fixed-price nature of the contract provides a degree of accountability by placing cost control responsibility on the contractor. Transparency is facilitated by the public award notice. Inspector General jurisdiction would apply if any fraud, waste, or abuse related to the contract is suspected or reported.

Related Government Programs

Federal Facilities Management Contracts
Department of Veterans Affairs Construction and Facilities Support
General Services Administration (GSA) Facilities Services
Department of Defense Facilities Maintenance

Risk Flags

Potential for performance issues impacting critical facilities.
Risk of cost overruns if scope is not well-defined.
Dependence on contractor for essential services.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $17.6 million to HOLITNA CONSTRUCTION, LLC. FF&E SUPPORT SERVICES

Who is the contractor on this award?

The obligated recipient is HOLITNA 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 $17.6 million.

What is the period of performance?

Start: 2023-10-01. End: 2026-09-30.

What is the track record of Holitna Construction, LLC in performing similar federal facilities support contracts?

Assessing the track record of Holitna Construction, LLC requires a review of their past performance on federal contracts, particularly those involving facilities support services. This would involve examining contract databases for previous awards, performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), and any documented issues or successes. A history of successful, timely, and cost-effective performance on similar contracts would indicate a lower risk for this new award. Conversely, a history of performance problems, disputes, or contract terminations would raise concerns about their capability to meet the requirements of this $17.6 million VA contract.

How does the awarded price of $17.6 million compare to market rates for similar facilities support services in California?

To compare the awarded price to market rates, one would need to benchmark it against similar facilities support contracts in California. This involves identifying comparable contracts (size, scope, duration, services provided) awarded by federal, state, or even large private entities in the region. Analyzing the average annual cost per square foot or per service unit (e.g., per maintenance task) for these comparable contracts would provide a basis for evaluation. If the VA's contract price is significantly higher than market benchmarks, it could indicate potential overpricing or a less competitive outcome. Conversely, a price below market rates might suggest exceptional value or a highly efficient contractor.

What are the primary risks associated with this firm-fixed-price contract for facilities support?

The primary risks associated with this firm-fixed-price contract, while generally favorable for cost control, include potential contractor underperformance if the fixed price is too low to incentivize quality, or if the contractor cuts corners to maintain profitability. There's also a risk of scope creep if the government requires services beyond the initial contract definition, which could lead to costly change orders or disputes. Furthermore, if Holitna Construction, LLC lacks sufficient resources or expertise, they might struggle to meet the demands of a $17.6 million contract over three years, potentially impacting service continuity and quality. Diligent contract management and clear performance standards are crucial to mitigate these risks.

How effective is the 'Full and Open Competition After Exclusion of Sources' method in ensuring competitive pricing for facilities support services?

The 'Full and Open Competition After Exclusion of Sources' method is generally considered a robust approach to ensuring competitive pricing. It aims to maximize the number of potential bidders by broadly advertising the requirement and allowing all responsible sources to participate. The effectiveness in ensuring competitive pricing depends on factors such as the clarity and completeness of the solicitation documents, the perceived attractiveness of the contract opportunity (value, duration, technical requirements), and the overall market landscape for the specific services. While this method is designed to foster competition, the actual number of bids received (two in this case) provides a more direct indicator of the competitive intensity for this particular contract.

What historical spending patterns exist for facilities support services within the Department of Veterans Affairs?

Historical spending patterns for facilities support services within the Department of Veterans Affairs (VA) are likely substantial, given the agency's extensive network of hospitals, clinics, and administrative buildings. Analyzing past VA contracts for similar services (NAICS 561210) would reveal trends in contract values, durations, award types (e.g., competitive vs. sole-source), and key contractors. This analysis could show whether spending has been increasing or decreasing, identify common geographic concentrations of spending, and highlight any shifts in procurement strategies. Understanding these patterns helps contextualize the current $17.6 million award and assess its alignment with the VA's overall facilities management budget and priorities.

What are the implications of the 3-year contract duration (1095 days) for service continuity and contractor performance?

A 3-year contract duration provides a significant period for service continuity, allowing the contractor, Holitna Construction, LLC, to establish efficient operations and for VA facilities to benefit from consistent support. This longer term can also encourage the contractor to invest in training, equipment, and process improvements, knowing they have a stable revenue stream. From a performance perspective, it allows for a more thorough evaluation of the contractor's capabilities and reliability over time. However, it also means that any performance issues may persist for a longer duration if not addressed promptly through contract management and enforcement mechanisms.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Facilities Support Services › Facilities Support Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 36C26123R0063

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 4300 B ST STE 405, ANCHORAGE, AK, 99503

Business Categories: 8(a) Program Participant, Alaskan Native Corporation Owned Firm, American Indian Owned Business, Category Business, Corporate Entity Not Tax Exempt, DoT Certified Disadvantaged Business Enterprise, Limited Liability Corporation, Minority Owned Business, Native American Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $30,350,735

Exercised Options: $17,647,566

Current Obligation: $17,647,566

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline