VA awards $51.6M contract for EHRM construction at Minneapolis VAMC, highlighting construction sector activity

Contract Overview

Contract Amount: $51,550,599 ($51.6M)

Contractor: Richard Group LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2022-09-27

End Date: 2024-08-26

Contract Duration: 699 days

Daily Burn Rate: $73.7K/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: CONTRACTOR TO PROVIDE CONSTRUCTION SERVICES TO COMPLETE THE EHRM PROJECT AT THE MINNEAPOLIS VAMC

Place of Performance

Location: MINNEAPOLIS, HENNEPIN County, MINNESOTA, 55417

State: Minnesota Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $51.6 million to RICHARD GROUP LLC for work described as: CONTRACTOR TO PROVIDE CONSTRUCTION SERVICES TO COMPLETE THE EHRM PROJECT AT THE MINNEAPOLIS VAMC Key points: 1. Contract value of $51.6M indicates significant investment in healthcare infrastructure. 2. The contract was awarded using full and open competition, suggesting a competitive bidding process. 3. The definitive contract type implies a long-term agreement for services. 4. The project focuses on Electronic Health Record Modernization (EHRM) construction, a critical area for healthcare efficiency. 5. The duration of 699 days suggests a substantial construction timeline. 6. The contract is firm-fixed-price, providing cost certainty for the government.

Value Assessment

Rating: good

The contract value of $51.6 million for construction services at the Minneapolis VAMC appears reasonable given the scope of an EHRM project. Benchmarking against similar large-scale healthcare construction projects would provide a more precise value-for-money assessment. The firm-fixed-price structure helps manage cost risks for the Department of Veterans Affairs. However, without specific details on the construction scope and materials, a definitive value assessment is challenging.

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 the solicitation was broadly advertised and multiple bids were likely considered. The presence of 3 bids suggests a moderate level of competition for this project. While not a vast number of bidders, it implies that the government sought and received proposals from various qualified contractors, which generally aids in price discovery and achieving a fair market price.

Taxpayer Impact: The use of full and open competition is beneficial for taxpayers as it encourages a competitive environment, potentially leading to lower prices and better quality services compared to sole-source or limited competition awards.

Public Impact

Veterans in the Minneapolis area will benefit from improved healthcare facilities through the EHRM project. The contract supports the modernization of healthcare IT infrastructure, aiming for enhanced patient care and operational efficiency. The construction services will be delivered at the Minneapolis VAMC, directly impacting local healthcare delivery. The project will likely create or sustain jobs in the construction sector within Minnesota.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for construction delays impacting EHRM implementation timeline.
Risk of cost overruns if unforeseen site conditions arise during construction.
Ensuring contractor's adherence to strict healthcare construction standards and regulations.

Positive Signals

Firm-fixed-price contract provides budget certainty.
Awarded through full and open competition, suggesting a competitive selection process.
Contractor has a track record, though specific performance on similar projects needs review.

Sector Analysis

The construction sector is a significant part of the federal contracting landscape, particularly for infrastructure projects like healthcare facilities. This contract falls within the Commercial and Institutional Building Construction NAICS code. Federal spending on healthcare construction is driven by the need to maintain and modernize aging facilities and implement new technologies like EHRM. Comparable spending benchmarks would involve analyzing other large-scale hospital or clinic construction contracts awarded by agencies like the VA, GSA, or DoD.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications specifically mandated for small businesses through a set-aside. However, the prime contractor, RICHARD GROUP LLC, may still engage small businesses as subcontractors to fulfill parts of the construction work, depending on their own business practices and the nature of the project requirements.

Oversight & Accountability

Oversight for this contract will primarily 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 deliver specified construction services within the agreed-upon price and timeframe. Transparency is generally maintained through contract award databases and public reporting, although detailed project-specific oversight activities are typically internal.

Related Government Programs

Veterans Health Administration (VHA) IT Modernization
Department of Veterans Affairs Capital Asset and Business Development Management
Federal Building and Fire Safety Program
Electronic Health Record Systems

Risk Flags

Potential for construction delays impacting EHRM rollout.
Risk of cost escalation due to unforeseen site conditions.
Dependency on successful integration with IT systems.
Ensuring compliance with stringent healthcare construction standards.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $51.6 million to RICHARD GROUP LLC. CONTRACTOR TO PROVIDE CONSTRUCTION SERVICES TO COMPLETE THE EHRM PROJECT AT THE MINNEAPOLIS VAMC

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 $51.6 million.

What is the period of performance?

Start: 2022-09-27. End: 2024-08-26.

What is the track record of RICHARD GROUP LLC in completing large-scale federal construction projects, particularly within the healthcare sector?

Assessing the track record of RICHARD GROUP LLC requires a review of their past performance on federal contracts. This would involve examining contract databases for previous awards, their completion status, any reported performance issues, and client feedback if available. Specifically for healthcare construction, it's important to verify if they have experience with projects requiring specialized knowledge of healthcare facility standards, infection control, and integration with complex systems like EHRM. A history of successful, on-time, and within-budget project delivery, especially in similar environments, would indicate a lower risk for this Minneapolis VAMC project. Conversely, a pattern of delays, cost overruns, or performance disputes would raise concerns.

How does the awarded amount of $51.6 million compare to similar EHRM-related construction projects at other VA facilities or similar healthcare institutions?

To benchmark the $51.6 million award, one would compare it against the total contract values of construction projects for Electronic Health Record Modernization (EHRM) or significant facility upgrades at other Department of Veterans Affairs (VA) medical centers or comparable healthcare systems (e.g., DoD, HHS). This comparison should consider the scope of work, square footage involved, specific construction requirements (e.g., seismic retrofitting, specialized medical equipment installation), and the geographic location, as construction costs vary regionally. If similar projects have been awarded for substantially less or if this project's scope appears less complex than others at this price point, it might suggest a less favorable value. Conversely, if it aligns with or is lower than comparable projects, it indicates good value.

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

Key risk indicators for this contract include the inherent complexities of constructing within an active medical facility, which can lead to disruptions and require stringent infection control measures. The 699-day duration (nearly two years) increases the potential for unforeseen site conditions, material price fluctuations (despite the fixed-price nature, scope changes can occur), and labor availability issues. Furthermore, the integration of construction with the broader EHRM IT project introduces a dependency risk; delays in one could impact the other. The firm-fixed-price contract, while beneficial for cost control, can shift risk to the contractor for unforeseen issues, potentially leading to claims or disputes if not managed carefully.

What is the expected impact of this EHRM construction project on the operational effectiveness and patient care at the Minneapolis VAMC?

The successful completion of this construction project is expected to significantly enhance the operational effectiveness and patient care at the Minneapolis VAMC by providing the necessary physical infrastructure for the Electronic Health Record Modernization (EHRM) system. This modernization aims to streamline clinical workflows, improve data accessibility for healthcare providers, reduce medical errors through better information management, and ultimately lead to more coordinated and efficient patient care. Improved facility infrastructure can also contribute to a better healing environment for patients and a more functional workspace for staff. The project's success is critical for realizing the full benefits of the EHRM investment.

How has federal spending on healthcare construction, specifically for IT infrastructure modernization like EHRM, trended over the past five years?

Federal spending on healthcare construction, particularly for IT infrastructure modernization such as EHRM projects, has seen a notable increase over the past five years. Driven by the recognized need to update aging facilities and adopt digital health technologies, agencies like the Department of Veterans Affairs (VA) and the Department of Defense (DoD) have allocated substantial funds. This trend reflects a broader government push towards digital transformation in healthcare to improve efficiency, data security, and patient outcomes. Spending in this category is influenced by factors such as technological advancements, cybersecurity imperatives, and the ongoing demand for modernized healthcare delivery systems, making it a growing segment of federal construction outlays.

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: 36C77622R0045

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1944 LEHIGH AVE, 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: $51,550,599

Exercised Options: $51,550,599

Current Obligation: $51,550,599

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline