VA awards $8.4M contract for Charleston VAMC EHR modernization construction, with completion expected in 2027

Contract Overview

Contract Amount: $8,395,839 ($8.4M)

Contractor: THE Construction Services Group Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2023-06-22

End Date: 2027-05-14

Contract Duration: 1,422 days

Daily Burn Rate: $5.9K/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: CHARLESTON VAMC ELECTRONIC HEALTH RECORD MODERNIZATION CONSTRUCTION

Place of Performance

Location: CHARLESTON, CHARLESTON County, SOUTH CAROLINA, 29401

State: South Carolina Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $8.4 million to THE CONSTRUCTION SERVICES GROUP INC for work described as: CHARLESTON VAMC ELECTRONIC HEALTH RECORD MODERNIZATION CONSTRUCTION Key points: 1. Contract value of $8.4 million for a multi-year construction project. 2. Project aims to modernize the Electronic Health Record (EHR) system infrastructure. 3. Awarded to The Construction Services Group Inc. with a firm fixed price. 4. Competition was full and open after exclusion of sources. 5. Project duration spans from June 2023 to May 2027. 6. The contract falls under the 'Electrical Contractors and Other Wiring Installation Contractors' NAICS code.

Value Assessment

Rating: good

The contract value of $8.4 million appears reasonable for a multi-year EHR modernization construction project. Benchmarking against similar large-scale healthcare facility construction projects would provide a more precise value-for-money assessment. The firm fixed-price structure helps mitigate cost overrun risks for the government, assuming the scope is well-defined. The specific details of the construction scope are crucial for a definitive value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition After Exclusion of Sources.' This indicates that while the competition was intended to be broad, certain sources were excluded, suggesting a specific reason or requirement that narrowed the field. The number of bidders is not explicitly stated, but the 'limited' competition level might imply fewer than ideal participants, potentially impacting price negotiation.

Taxpayer Impact: The 'limited' competition level means taxpayers may not have benefited from the most aggressive pricing possible, as a smaller pool of bidders might lead to less downward pressure on costs compared to truly full and open competition.

Public Impact

The primary beneficiaries are patients and staff at the Charleston VAMC, who will experience improved healthcare delivery through modernized EHR infrastructure. The services delivered include construction and installation related to the EHR system, ensuring its physical and technological foundation. The geographic impact is localized to the Charleston, South Carolina area, specifically the VAMC facility. Workforce implications may include construction jobs and potential long-term IT support roles related to the modernized EHR system.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if EHR modernization requirements evolve during the construction phase.
Dependency on the successful integration of new construction with existing VAMC infrastructure.
Risk of delays due to unforeseen site conditions or supply chain disruptions affecting construction materials.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Clear project end date (May 2027) aids in planning and oversight.
Award to a specialized contractor (Electrical Contractors and Other Wiring Installation Contractors) suggests relevant expertise.

Sector Analysis

This contract falls within the broader construction and IT infrastructure sectors, specifically supporting healthcare technology modernization. The market for healthcare construction, particularly for facilities integrating advanced IT systems like EHRs, is substantial. Comparable spending benchmarks would involve looking at other VAMC or large hospital construction projects focused on IT infrastructure upgrades, which can range from millions to tens of millions of dollars depending on scale and complexity.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses arising from a set-aside. The prime contractor, The Construction Services Group Inc., may engage small businesses as subcontractors, but this is not mandated by the contract terms provided.

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, requiring delivery of specified construction services by the deadline. Transparency is facilitated through federal contract databases, though detailed project progress reports may not be publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Veterans Health Administration IT Modernization Programs
Department of Veterans Affairs Construction Projects
Electronic Health Record System Implementation Contracts
Federal Healthcare Infrastructure Spending

Risk Flags

Limited Competition
Potential for Scope Creep
Integration Complexity

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $8.4 million to THE CONSTRUCTION SERVICES GROUP INC. CHARLESTON VAMC ELECTRONIC HEALTH RECORD MODERNIZATION CONSTRUCTION

Who is the contractor on this award?

The obligated recipient is THE CONSTRUCTION SERVICES GROUP INC.

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 $8.4 million.

What is the period of performance?

Start: 2023-06-22. End: 2027-05-14.

What is the specific scope of the EHR modernization construction work required under this contract?

The provided data identifies the contract as 'CHARLESTON VAMC ELECTRONIC HEALTH RECORD MODERNIZATION CONSTRUCTION' and assigns it NAICS code 238210 ('Electrical Contractors and Other Wiring Installation Contractors'). This suggests the construction work is primarily focused on the physical infrastructure necessary to support the Electronic Health Record system. This could include electrical wiring, data cabling, server room build-outs, power and cooling systems, and potentially modifications to existing spaces to accommodate new IT hardware. The exact specifications would be detailed in the contract's Statement of Work (SOW), which is not included in the provided data. The firm fixed-price nature implies a defined scope that the contractor must deliver within the agreed budget.

How does the $8.4 million contract value compare to similar EHR modernization construction projects at other VAMCs or healthcare facilities?

Benchmarking the $8.4 million contract value requires comparing it to similar projects. Large-scale EHR implementations often involve significant infrastructure components. For instance, constructing new data centers, upgrading network backbone, or retrofitting entire wings of a hospital for advanced IT can easily run into millions of dollars. A single VAMC EHR modernization construction project of this magnitude is plausible, especially if it involves substantial electrical, network, and potentially structural upgrades. However, without specific details on the scope (e.g., square footage, complexity of IT integration, specific hardware requirements), a precise comparison is difficult. Projects focused solely on software implementation are typically less expensive than those involving major construction.

What are the key risks associated with this construction contract, and how are they being managed?

Key risks include potential cost overruns if the scope is not perfectly defined (though mitigated by fixed-price), delays due to unforeseen site conditions or supply chain issues, and integration challenges with existing VAMC infrastructure. The firm fixed-price contract shifts cost overrun risk to the contractor. Management of site conditions and integration risks relies heavily on thorough initial site assessments, detailed planning by the contractor, and active project oversight by the VA. Delays can be managed through contract clauses regarding performance timelines and potential penalties, as well as proactive supply chain management by the contractor.

What is the track record of The Construction Services Group Inc. in performing similar government construction contracts, particularly for healthcare IT infrastructure?

Information on The Construction Services Group Inc.'s specific track record with government contracts, especially those related to healthcare IT infrastructure, is not provided in the data. A comprehensive assessment would require reviewing their past performance ratings, contract history with federal agencies (like SAM.gov), and any available past performance questionnaires (PPQs) or CPARS reports. Their specialization under NAICS code 238210 suggests expertise in electrical and wiring installations, which is relevant, but doesn't confirm experience with the full scope of EHR modernization construction or large-scale healthcare projects. Further due diligence would be needed to evaluate their capability and past success.

How will the success of this construction project contribute to the overall effectiveness of the Charleston VAMC's EHR system?

The success of this construction project is foundational to the effective operation of the Charleston VAMC's EHR system. Modernized construction provides the necessary physical and electrical infrastructure – robust power, cooling, secure networking environments, and potentially upgraded physical spaces – that reliable IT systems depend on. Without adequate infrastructure, even the best EHR software can suffer from performance issues, downtime, or security vulnerabilities. Therefore, this construction contract directly enables the EHR system to function optimally, supporting clinicians in delivering timely and accurate patient care, improving data integrity, and enhancing overall healthcare efficiency at the facility.

What has been the historical spending trend for EHR-related construction at the Department of Veterans Affairs?

Historical spending trends for EHR-related construction at the VA are not detailed in the provided data. However, the VA has undertaken significant IT modernization efforts, including the implementation of the Oracle Cerner EHR system across its facilities. These large-scale IT initiatives often necessitate substantial investments in underlying infrastructure. Spending on construction related to EHRs would likely have increased in recent years as the VA rolled out new systems, requiring upgrades to data centers, network cabling, and power/cooling systems in medical centers nationwide. Analyzing VA budget allocations for IT infrastructure and capital construction over the past decade would reveal these trends.

Industry Classification

NAICS: Construction › Building Equipment Contractors › Electrical Contractors and Other Wiring Installation Contractors

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: 36C77622B0036

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1022 PHYSICIANS DR, CHARLESTON, SC, 29414

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Service Disabled Veteran Owned Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $15,632,684

Exercised Options: $15,632,684

Current Obligation: $8,395,839

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline