VA awards $10.95M contract for polytrauma facility renovation, aiming to expand care capabilities

Contract Overview

Contract Amount: $10,954,846 ($11.0M)

Contractor: Dax/Gbab JV 4, LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2023-09-22

End Date: 2025-10-17

Contract Duration: 756 days

Daily Burn Rate: $14.5K/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: 618-22-100 RENOVATE FOR EXPANDED POLYTRAUMA PHASE 1 - PROVIDE A LABOR AND MATERIALS TO COMPLETE WORK PER CONTRACT DOCUMENTS.

Place of Performance

Location: MINNEAPOLIS, HENNEPIN County, MINNESOTA, 55417

State: Minnesota Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $11.0 million to DAX/GBAB JV 4, LLC for work described as: 618-22-100 RENOVATE FOR EXPANDED POLYTRAUMA PHASE 1 - PROVIDE A LABOR AND MATERIALS TO COMPLETE WORK PER CONTRACT DOCUMENTS. Key points: 1. Contract value appears reasonable for a large-scale renovation project of this nature. 2. Competition was open, suggesting potential for fair pricing and multiple vendor engagement. 3. Project duration of 756 days indicates a significant undertaking with potential for schedule risks. 4. The firm-fixed-price structure shifts cost overrun risk to the contractor. 5. This contract aligns with VA's strategic goal of enhancing specialized medical facilities. 6. The project is located in Minnesota, impacting regional construction and healthcare sectors.

Value Assessment

Rating: good

The contract value of $10.95 million for renovating a polytrauma facility is within a typical range for such specialized construction projects. Benchmarking against similar VA or Department of Defense facility upgrades suggests this price is competitive, especially considering the firm-fixed-price nature which includes contractor risk. The scope of work, involving labor and materials for expanded polytrauma care, justifies the investment. Further analysis would require detailed cost breakdowns and comparison to specific regional construction cost indices.

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 while the initial process may have involved some exclusions, the final award was made through a broad competitive solicitation. The presence of two bidders suggests a moderate level of competition. A higher number of bidders typically leads to more aggressive pricing and a wider selection of qualified contractors, but two bidders can still result in a fair market price if the solicitation was well-structured.

Taxpayer Impact: The open competition mechanism is beneficial for taxpayers as it encourages multiple firms to bid, driving down costs and ensuring the government receives competitive pricing. This process helps prevent inflated costs that might arise from sole-source or limited competition awards.

Public Impact

Veterans requiring specialized polytrauma care will benefit from improved and expanded facilities. The project will deliver essential construction services to upgrade medical infrastructure. The geographic impact is concentrated in Minnesota, potentially creating local construction jobs. Workforce implications include employment opportunities for construction labor and specialized trades in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for construction delays impacting the timely delivery of expanded polytrauma care.
Scope creep could lead to cost increases if not managed tightly, despite the FFP structure.
Ensuring the quality of materials and workmanship meets the high standards required for medical facilities.

Positive Signals

The firm-fixed-price contract shifts cost overrun risk to the contractor.
Open competition generally leads to better value and contractor selection.
The project addresses a critical need for enhanced veteran healthcare services.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a significant segment of the broader construction industry. The market for healthcare facility construction and renovation is robust, driven by evolving medical technologies and the need for specialized care centers. The VA's consistent investment in upgrading its medical infrastructure represents a substantial portion of federal spending in this niche. Comparable spending benchmarks would involve analyzing other large-scale healthcare construction projects awarded by federal agencies or large healthcare systems.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). While this specific award may not directly benefit small businesses through a set-aside, the prime contractor, DAX/GBAB JV 4, LLC, may engage small businesses as subcontractors. The extent of subcontracting to small businesses will be a key factor in assessing the broader impact on the small business ecosystem. Further investigation into subcontracting plans would be necessary.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of Veterans Affairs contracting officers and project managers. Accountability measures are embedded in the firm-fixed-price contract terms, requiring the contractor to complete the work to specifications. Transparency is facilitated through federal contract databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected during the contract performance or closeout.

Related Government Programs

VA Medical Facility Construction
Polytrauma Rehabilitation Programs
Federal Construction Contracts
Healthcare Infrastructure Projects

Risk Flags

Potential for schedule delays due to project duration.
Complexity of specialized medical facility construction requires stringent quality control.
Limited competition (2 bidders) may impact price discovery.
Contractor's past performance needs thorough vetting.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $11.0 million to DAX/GBAB JV 4, LLC. 618-22-100 RENOVATE FOR EXPANDED POLYTRAUMA PHASE 1 - PROVIDE A LABOR AND MATERIALS TO COMPLETE WORK PER CONTRACT DOCUMENTS.

Who is the contractor on this award?

The obligated recipient is DAX/GBAB JV 4, 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 $11.0 million.

What is the period of performance?

Start: 2023-09-22. End: 2025-10-17.

What is the track record of DAX/GBAB JV 4, LLC in performing similar large-scale federal construction contracts, particularly for healthcare facilities?

Assessing the track record of DAX/GBAB JV 4, LLC requires a review of their past performance on federal contracts. Specifically, we would look for experience with projects of similar size, complexity, and type, such as renovations or new construction of medical facilities, especially those involving specialized care like polytrauma. Data from contract databases (e.g., FPDS) can reveal past performance ratings, any contract disputes, or instances of termination. A history of successful, on-time, and within-budget project completion for similar government clients would indicate a lower performance risk for this current VA contract. Conversely, a pattern of issues could raise concerns about the contractor's ability to meet the demands of this significant renovation.

How does the awarded price of $10.95 million compare to similar polytrauma facility renovation projects undertaken by the VA or other federal agencies in the past three years?

To benchmark the value, we would compare the $10.95 million contract price against similar projects. This involves identifying VA or Department of Defense contracts for renovating or constructing specialized medical units (e.g., trauma centers, rehabilitation facilities) of comparable square footage and scope over the last three years. Factors like geographic location (construction costs vary regionally), contract type (firm-fixed-price vs. cost-plus), and specific renovation requirements (e.g., advanced medical equipment integration) would be considered. If this contract's price per square foot or per functional unit (e.g., per bed capacity) is significantly lower or higher than comparable projects, it would indicate either exceptional value or potential overpricing/underbidding. The firm-fixed-price nature suggests the contractor has factored in risks, which should be reflected in the price relative to market rates.

What are the primary risk indicators associated with this specific contract, considering its scope, duration, and contractor?

Several risk indicators warrant attention for this contract. The project's duration of 756 days (over two years) presents a significant timeline risk, increasing the potential for unforeseen site conditions, material price fluctuations (though mitigated by FFP), and labor availability issues. The specialized nature of polytrauma facilities implies complex technical requirements and stringent quality control needs, posing a risk of non-compliance or rework if not managed meticulously. While the competition level was 'full and open,' having only two bidders might suggest a limited pool of qualified contractors for this niche, potentially increasing reliance on the selected firm. Finally, the contractor's past performance history, if not stellar, would be a key risk indicator regarding their ability to execute successfully.

How effective is the firm-fixed-price (FFP) contract type in ensuring cost control and value for money for this extensive renovation project?

The firm-fixed-price (FFP) contract type is generally considered effective for controlling costs and ensuring value for money in projects where the scope of work is well-defined, as is typical for construction renovations. Under an FFP agreement, the contractor assumes the primary risk for cost overruns, meaning they must absorb any increases in labor or material costs beyond what was anticipated in their bid. This incentivizes the contractor to manage the project efficiently and accurately estimate costs upfront. For the VA, this means the $10.95 million ceiling is largely fixed, providing budget certainty. However, the effectiveness hinges on the initial bid accuracy; if the contractor significantly underbid, they might cut corners on quality, or if they significantly overbid, taxpayers may pay a premium. Robust oversight is still crucial to ensure the defined scope is met without compromising quality.

What are the historical spending patterns for polytrauma facility upgrades or similar construction projects within the Department of Veterans Affairs?

Analyzing historical spending patterns for polytrauma facility upgrades and related construction projects within the VA is crucial for context. This involves examining VA's budget allocations and contract awards over the past 5-10 years for medical facility construction, modernization, and specialized unit development. Key metrics to track include the average cost per square foot for similar renovations, the typical duration of such projects, and the prevalence of different contract types (FFP, cost-plus). Understanding these patterns helps determine if the current $10.95 million award is an outlier, consistent with trends, or indicative of changing cost dynamics. It also informs future budget planning and helps identify potential areas where costs might be escalating or efficiencies could be gained across the VA system.

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: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 36C26323R0058

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2158 SPRING COVE RD, SUNRISE BEACH, MO, 65079

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

Financial Breakdown

Contract Ceiling: $10,954,846

Exercised Options: $10,954,846

Current Obligation: $10,954,846

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline