VA awards $2.8M contract for EHR modernization infrastructure upgrades at Arkansas hospital

Contract Overview

Contract Amount: $2,839,376 ($2.8M)

Contractor: Spees LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2022-02-10

End Date: 2026-03-06

Contract Duration: 1,485 days

Daily Burn Rate: $1.9K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 20

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: AE IS TO PROVIDE ALL DESIGN AND ENGINEERING SERVICES FOR THE ELECTRONIC HEALTH RECORD MODERNIZATION INFRASTRUCTURE UPGRADES DESIGN PROJECT AT THE JOHN L. MCCLELLAN MEMORIAL VETERANS HOSPITAL IN LITTLE ROCK, ARKANSAS.

Place of Performance

Location: LITTLE ROCK, PULASKI County, ARKANSAS, 72205

State: Arkansas Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $2.8 million to SPEES LLC for work described as: AE IS TO PROVIDE ALL DESIGN AND ENGINEERING SERVICES FOR THE ELECTRONIC HEALTH RECORD MODERNIZATION INFRASTRUCTURE UPGRADES DESIGN PROJECT AT THE JOHN L. MCCLELLAN MEMORIAL VETERANS HOSPITAL IN LITTLE ROCK, ARKANSAS. Key points: 1. Contract awarded to SPEES LLC for design and engineering services. 2. Project aims to modernize electronic health record infrastructure at John L. McClellan Memorial Veterans Hospital. 3. Contract duration spans over 1400 days, indicating a significant, long-term project. 4. The contract type is a firm-fixed-price definitive contract. 5. This award represents a specific investment in healthcare IT infrastructure for veteran services. 6. The contract was awarded under full and open competition after exclusion of sources.

Value Assessment

Rating: good

The contract value of $2.8 million for design and engineering services appears reasonable for a project of this scope and duration, which is set to conclude in March 2026. Benchmarking against similar healthcare IT infrastructure design projects would provide a more precise value-for-money assessment. However, the firm-fixed-price structure suggests that the contractor bears the risk of cost overruns, which is generally favorable for the government. The specific services, design and engineering for EHR modernization, are critical for improving veteran healthcare delivery.

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.' This indicates that while the competition was open, certain sources may have been excluded based on specific criteria, which warrants further investigation into the justification for exclusion. The number of bidders is not specified, but the 'full and open' nature suggests a competitive process was intended, which should theoretically lead to better pricing and value.

Taxpayer Impact: A competitive award process, even with exclusions, generally benefits taxpayers by fostering a market-driven price. However, understanding the rationale behind source exclusions is crucial to ensure maximum taxpayer value was achieved.

Public Impact

Veterans receiving care at the John L. McClellan Memorial Veterans Hospital will benefit from improved electronic health record systems. The project will deliver essential design and engineering services for critical IT infrastructure upgrades. The geographic impact is focused on Little Rock, Arkansas, serving the local veteran population. The project may lead to specialized IT and engineering job opportunities during the design and implementation phases.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The exclusion of sources in an otherwise 'full and open' competition needs clarification to ensure no potential bidders were unfairly disadvantaged.
The long duration of the contract (over 1400 days) increases the risk of scope creep or unforeseen technological obsolescence if not managed diligently.

Positive Signals

The firm-fixed-price contract type shifts cost overrun risk to the contractor.
Awarding under full and open competition, even with exclusions, suggests an effort to leverage market competition for best value.
The project addresses a critical need for modernizing healthcare IT infrastructure, directly impacting patient care quality.

Sector Analysis

The contract falls within the Engineering Services sector, specifically supporting the Healthcare Information Technology (IT) sub-sector. The market for healthcare IT modernization is substantial, driven by the need for interoperability, data security, and improved patient outcomes. This contract represents a specific investment in upgrading the foundational infrastructure for electronic health records, a critical component of modern healthcare delivery. Comparable spending benchmarks would typically involve other federal agencies or large healthcare systems undertaking similar EHR modernization or infrastructure upgrade projects.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract, nor does it mention subcontracting plans. Further analysis would be needed to determine if small businesses had opportunities to participate either as prime contractors or subcontractors in this engineering services award.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of Veterans Affairs contracting officers and program managers. The firm-fixed-price nature provides a degree of accountability regarding cost. Transparency would be enhanced by public reporting of project milestones and performance metrics. The Inspector General's office within the VA would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

Veterans Health Administration IT Modernization Programs
Electronic Health Record (EHR) Systems
Healthcare Infrastructure Upgrades
Engineering and Design Services Contracts

Risk Flags

Potential for limited competition due to source exclusions.
Risk of schedule delays in long-duration IT projects.
Need for clear definition of design scope to prevent cost growth.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $2.8 million to SPEES LLC. AE IS TO PROVIDE ALL DESIGN AND ENGINEERING SERVICES FOR THE ELECTRONIC HEALTH RECORD MODERNIZATION INFRASTRUCTURE UPGRADES DESIGN PROJECT AT THE JOHN L. MCCLELLAN MEMORIAL VETERANS HOSPITAL IN LITTLE ROCK, ARKANSAS.

Who is the contractor on this award?

The obligated recipient is SPEES 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 $2.8 million.

What is the period of performance?

Start: 2022-02-10. End: 2026-03-06.

What is the track record of SPEES LLC in performing similar federal IT infrastructure design and engineering contracts?

A review of federal procurement data would be necessary to ascertain SPEES LLC's track record. Key indicators to examine include past performance evaluations on similar contracts, the value and complexity of previously awarded projects, and any history of contract disputes or performance issues. Understanding their experience with healthcare IT systems, specifically EHR modernization, would be particularly relevant. Without specific past performance data, it is difficult to definitively assess their capability to successfully execute this $2.8 million contract over its multi-year duration.

How does the $2.8 million contract value compare to similar EHR infrastructure design projects within the federal government?

Benchmarking this $2.8 million contract against similar projects requires access to a broader dataset of federal IT infrastructure design contracts, particularly those focused on EHR modernization. Factors such as hospital size, scope of modernization (e.g., system-wide vs. specific components), and the specific engineering services required (e.g., network upgrades, server infrastructure, cybersecurity integration) influence costs. Generally, large-scale healthcare IT infrastructure projects can range from millions to tens of millions of dollars. This contract appears to be for the design phase, which typically represents a smaller portion of the overall modernization cost. A more precise comparison would involve analyzing contracts with similar scope, duration, and agency (e.g., other VA facilities or DoD healthcare systems).

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

Primary risks include potential cost overruns (mitigated by the firm-fixed-price structure, placing risk on the contractor), schedule delays (due to the long duration and complexity of IT projects), scope creep (requiring robust contract management and change control processes), and technological obsolescence (requiring careful planning and potentially modular design). Furthermore, the 'exclusion of sources' in the competition process introduces a risk if it unduly limited competition. Mitigation strategies should involve diligent project oversight, clear communication channels, adherence to defined milestones, and a thorough review of the justification for any source exclusions.

How effective is the firm-fixed-price contract type in ensuring value for money for this specific EHR modernization project?

The firm-fixed-price (FFP) contract type is generally effective in ensuring value for money when the scope of work is well-defined and the risks are understood. For a design and engineering services contract like this, FFP shifts the financial risk of cost overruns to the contractor, SPEES LLC. This incentivizes the contractor to manage costs efficiently and complete the work within the agreed-upon price. However, the government must ensure the initial price is fair and reasonable, and that the scope is clearly articulated to prevent disputes or the need for costly change orders. If the scope is inherently uncertain, other contract types might offer better value, but for defined design services, FFP is a common and often effective choice.

What is the historical spending trend for engineering services related to EHR modernization within the Department of Veterans Affairs?

Analyzing historical spending trends for EHR modernization engineering services within the VA would require examining procurement data over several fiscal years. This would involve identifying contracts with similar North American Industry Classification System (NAICS) codes (like 541330 for Engineering Services) and keywords related to EHR, health IT, and infrastructure upgrades. Trends might reveal increasing or decreasing investment in this area, average contract values, and the prevalence of different contract types and competition levels. Such analysis could indicate whether this $2.8 million award is consistent with past spending patterns or represents a significant shift in investment strategy for the VA's healthcare IT infrastructure.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: ARCHITECT/ENGINEER SERVICES › ARCH-ENG SVCS - CONSTRUCTION

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: ARCHITECT-ENGINEER FAR 6.102

Solicitation ID: 36C77621R0179

Offers Received: 20

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Spees-Hernandez JV LLC

Address: 625 1ST AVE STE 301, SEATTLE, WA, 98104

Business Categories: Category Business, HUBZone Firm, Limited Liability Corporation, Self-Certified Small Disadvantaged Business, Service Disabled Veteran Owned Business, Small Business, Sole Proprietorship, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $3,275,540

Exercised Options: $2,839,376

Current Obligation: $2,839,376

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline