VA awards $5.2M contract for mental health facility construction in Arizona

Contract Overview

Contract Amount: $5,242,034 ($5.2M)

Contractor: Precision Construction Group, LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2021-03-31

End Date: 2025-02-20

Contract Duration: 1,422 days

Daily Burn Rate: $3.7K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 13

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: THIS PROJECT IS TO PROCURE THE CONSTRUCTION FOR THE EXPAND MENTAL HEALTH, BUILDING 90 MINOR CONSTRUCTION PROJECT AT THE SOUTHERN ARIZONA VA HEALTH CARE SYSTEM (SAVAHCS) IN TUCSON, AZ.

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85723

State: Arizona Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $5.2 million to PRECISION CONSTRUCTION GROUP, LLC for work described as: THIS PROJECT IS TO PROCURE THE CONSTRUCTION FOR THE EXPAND MENTAL HEALTH, BUILDING 90 MINOR CONSTRUCTION PROJECT AT THE SOUTHERN ARIZONA VA HEALTH CARE SYSTEM (SAVAHCS) IN TUCSON, AZ. Key points: 1. Contract awarded for minor construction project at Southern Arizona VA Health Care System. 2. Project aims to expand mental health facilities. 3. Contract duration spans nearly four years. 4. Firm Fixed Price contract type indicates defined scope and cost. 5. Competition level was 'Full and Open' after exclusion of sources. 6. Contractor is Precision Construction Group, LLC.

Value Assessment

Rating: fair

The contract value of $5.2 million for a mental health building expansion appears to be within a reasonable range for a construction project of this nature. However, without specific details on the scope of work, square footage, or the extent of the expansion, a direct comparison to similar contracts is challenging. The firm fixed-price structure suggests that the initial pricing was deemed acceptable, but ongoing cost management will be crucial for value realization. Benchmarking against average construction costs per square foot for healthcare facilities in the region would provide a more concrete assessment of value.

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 while the competition was intended to be broad, certain sources may have been excluded based on specific criteria. The number of bidders (13) suggests a healthy level of interest and competition for this project. A competitive bidding process generally leads to better price discovery and potentially more favorable terms for the government.

Taxpayer Impact: The competitive nature of this award is beneficial for taxpayers, as it likely resulted in a more cost-effective solution compared to a sole-source or limited competition scenario. The presence of multiple bidders helps ensure that the awarded price reflects market conditions.

Public Impact

Veterans in Southern Arizona will benefit from expanded mental health services. The project will result in improved healthcare infrastructure at the SAVAHCS. Construction activities will likely create temporary employment opportunities in the Tucson area. Enhanced mental health facilities can lead to better patient outcomes and access to care.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen construction challenges arise.
Delays in project completion could impact the timely delivery of expanded mental health services.
Ensuring the quality of construction meets VA standards is critical for long-term facility performance.

Positive Signals

Firm Fixed Price contract provides cost certainty.
Competitive bidding process likely secured a reasonable price.
Project addresses a critical need for expanded mental health services.

Sector Analysis

The construction sector, particularly for healthcare facilities, is a significant area of federal spending. This contract falls under commercial and institutional building construction, a broad category encompassing projects that require specialized knowledge of building codes, materials, and project management. The Department of Veterans Affairs is a major investor in healthcare infrastructure, and projects like this are essential for maintaining and expanding its network of facilities to meet the needs of veterans. Benchmarking this contract against similar VA construction projects or other federal healthcare building initiatives would provide further context on its scale and cost-effectiveness.

Small Business Impact

The data does not indicate any specific small business set-aside provisions for this contract, nor does it mention subcontracting goals. The award to Precision Construction Group, LLC, a single entity, does not provide insight into their utilization of small businesses. Further analysis would be needed to determine if subcontracting opportunities exist and if small businesses are being engaged in the project's execution.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Veterans Affairs' contracting and project management offices. The firm fixed-price nature of the contract implies that the contractor bears much of the risk for cost overruns, but the VA would still monitor progress, quality, and adherence to the contract terms. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse. Transparency is generally maintained through contract award databases and public reporting, though specific project oversight details may not be publicly detailed.

Related Government Programs

VA Major Medical Facility Lease Program
VA Capital Asset Realignment and Enhancement Act (CAREA)
Department of Defense Construction Projects
Federal Buildings Fund

Risk Flags

Potential for schedule delays
Risk of unforeseen site conditions impacting cost
Quality control during construction

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $5.2 million to PRECISION CONSTRUCTION GROUP, LLC. THIS PROJECT IS TO PROCURE THE CONSTRUCTION FOR THE EXPAND MENTAL HEALTH, BUILDING 90 MINOR CONSTRUCTION PROJECT AT THE SOUTHERN ARIZONA VA HEALTH CARE SYSTEM (SAVAHCS) IN TUCSON, AZ.

Who is the contractor on this award?

The obligated recipient is PRECISION CONSTRUCTION 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 $5.2 million.

What is the period of performance?

Start: 2021-03-31. End: 2025-02-20.

What is the specific scope of work for the mental health facility expansion?

The provided data indicates the project is for the 'EXPAND MENTAL HEALTH, BUILDING 90 MINOR CONSTRUCTION PROJECT AT THE SOUTHERN ARIZONA VA HEALTH CARE SYSTEM (SAVAHCS) IN TUCSON, AZ.' However, the precise details of the expansion, such as the number of new rooms, square footage to be added, specific services to be housed, or the extent of renovations to existing structures, are not detailed in the provided summary. A comprehensive understanding of the scope is crucial for accurately assessing the value and comparing it to similar projects. This information would typically be found in the contract's statement of work (SOW) or performance work statement (PWS).

How does the awarded price compare to industry benchmarks for similar healthcare construction projects in Arizona?

Benchmarking this $5.2 million contract against industry standards requires more detailed project specifications, such as the total square footage of the expansion, the type of construction (e.g., new build vs. renovation), and the complexity of the interior fit-out for mental health services. Generally, construction costs can vary significantly based on these factors. For instance, average costs per square foot for healthcare facilities can range widely, from a few hundred dollars to over a thousand, depending on specialized equipment and finishes. Without these specifics, a precise comparison is difficult. However, the 'Full and Open' competition suggests the VA sought competitive pricing, which should align it reasonably with market rates for comparable projects in the Tucson area.

What are the key performance indicators (KPIs) for this construction contract, and how will they be monitored?

While the provided data does not explicitly list the KPIs for this specific contract, typical performance indicators for construction projects of this nature include adherence to schedule, quality of workmanship, safety compliance, and budget management. The Department of Veterans Affairs would likely have established monitoring mechanisms, potentially involving on-site project managers, regular progress reports from the contractor (Precision Construction Group, LLC), and site inspections. The firm fixed-price contract structure incentivizes the contractor to meet these objectives to avoid incurring additional costs. Specific quality assurance surveillance plans (QASPs) are standard for such federal construction contracts.

What is Precision Construction Group, LLC's track record with the Department of Veterans Affairs and similar federal construction projects?

The provided data identifies Precision Construction Group, LLC as the awardee but does not offer details on their past performance or track record with the VA or other federal agencies. A thorough assessment would require reviewing their contract history, including past performance evaluations, any instances of disputes or claims, and their experience with projects of similar size and scope, particularly in healthcare construction. Federal procurement databases and past performance information systems (PPIRS) would be the primary sources for this type of analysis. Understanding their history is crucial for evaluating the risk associated with this contract.

Are there any identified risks or challenges associated with this specific construction project, and what mitigation strategies are in place?

The primary risks associated with a construction project of this scale typically include potential delays due to unforeseen site conditions (e.g., soil issues, existing utilities), weather disruptions, material availability, and labor shortages. For a mental health facility, there may also be specific requirements related to acoustics, privacy, and specialized equipment that could introduce complexity. The firm fixed-price contract shifts some financial risk to the contractor. Mitigation strategies would likely involve robust project management by the VA, detailed site investigations prior to construction, contingency planning in the schedule and budget, and clear communication protocols with the contractor. The 'Full and Open' competition may also mitigate risks by selecting a contractor with a proven ability to manage such projects effectively.

How does this contract fit into the VA's broader strategy for improving mental healthcare access for veterans in the region?

This contract directly supports the VA's strategic objective of expanding and improving mental healthcare services for veterans. By investing in the physical infrastructure at the Southern Arizona VA Health Care System, the VA aims to increase capacity, potentially reduce wait times, and provide a more modern and effective healing environment. This project is likely part of a larger, ongoing effort by the VA nationwide to address the growing demand for mental health support among the veteran population. The expansion signifies a commitment to enhancing the quality and accessibility of care in the Tucson region.

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: 36E77620B0008

Offers Received: 13

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 8621 GLENMONT DR, NORTH RICHLAND HILLS, TX, 76182

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: $5,242,034

Exercised Options: $5,242,034

Current Obligation: $5,242,034

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline