VA awards $25.8M contract for Montrose CLC construction, highlighting firm fixed-price approach

Contract Overview

Contract Amount: $25,839,000 ($25.8M)

Contractor: Cdeem CO

Awarding Agency: Department of Veterans Affairs

Start Date: 2024-05-23

End Date: 2027-03-04

Contract Duration: 1,015 days

Daily Burn Rate: $25.5K/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: CONSTRUCTION CONTRACTOR IS TO PROVIDE ALL LABOR AND WORK NECESSARY TO BUILD AND COMPLETE THE COMMUNITY LIVING CENTER (CLC) PROJECT AT THE MONTROSE, NY VA MEDICAL CENTER.

Place of Performance

Location: MONTROSE, WESTCHESTER County, NEW YORK, 10548

State: New York Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $25.8 million to CDEEM CO for work described as: CONSTRUCTION CONTRACTOR IS TO PROVIDE ALL LABOR AND WORK NECESSARY TO BUILD AND COMPLETE THE COMMUNITY LIVING CENTER (CLC) PROJECT AT THE MONTROSE, NY VA MEDICAL CENTER. Key points: 1. The contract utilizes a firm fixed-price structure, aiming to control costs for the VA. 2. Competition was conducted under 'full and open competition after exclusion of sources,' suggesting a potentially limited but justified bidding process. 3. The project's duration of 1015 days indicates a significant construction timeline. 4. The award to CDEEM CO suggests a focus on established contractors for complex projects. 5. This contract falls under the Commercial and Institutional Building Construction NAICS code, placing it within a specific industry segment. 6. The project's location in Montrose, NY, will have local economic and workforce implications.

Value Assessment

Rating: good

The contract value of $25.8 million for a community living center construction project appears within a reasonable range for a project of this scale and complexity. Benchmarking against similar VA medical center construction projects would provide further context, but the firm fixed-price nature suggests an effort to establish a clear cost ceiling. The absence of specific cost breakdowns makes a detailed value-for-money assessment challenging without further data, but the fixed-price model generally offers predictability.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'full and open competition after exclusion of sources.' This procurement method implies that while the competition was intended to be open, certain sources may have been excluded based on specific criteria, possibly related to capability, past performance, or security. With 3 bidders, the competition level was moderate, which can still lead to price discovery but might not be as robust as a fully open solicitation with a larger number of participants.

Taxpayer Impact: The moderate competition level suggests that taxpayers likely received a competitive price, but the exclusion of certain sources could mean that even more favorable pricing might have been achievable with broader participation.

Public Impact

Veterans will benefit from the new Community Living Center (CLC) at the Montrose VA Medical Center, providing enhanced residential care services. The project will deliver comprehensive construction services, including all labor and work necessary to build and complete the CLC. The geographic impact is concentrated in Montrose, New York, with potential ripple effects on the local economy. The construction phase will likely create numerous jobs for skilled trades and construction workers in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions arise, despite the firm fixed-price structure.
Risk of delays due to the complex nature of large-scale construction projects and potential supply chain disruptions.
Ensuring adequate oversight to maintain quality standards throughout the extended construction period.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Award to a single contractor streamlines management and accountability.
The project addresses a critical need for enhanced veteran care facilities.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a significant segment of the broader construction industry. Projects of this nature, particularly for government entities like the VA, often involve substantial investment and adhere to stringent building codes and performance standards. Comparable spending benchmarks for similar healthcare or institutional facility construction projects would typically range from tens to hundreds of millions of dollars, depending on size, scope, and location.

Small Business Impact

The contract data indicates that small business participation was not a primary set-aside consideration for this specific award (sb: false). While the prime contractor, CDEEM CO, is not explicitly identified as a small business, the contract's value and scope suggest it is likely a larger entity. There is no direct information on subcontracting plans for small businesses, which could be a missed opportunity to engage the small business ecosystem in this significant construction project.

Oversight & Accountability

Oversight for this construction contract will primarily be managed by the Department of Veterans Affairs. Accountability measures are inherent in the firm fixed-price contract type, which penalizes the contractor for cost overruns. Transparency is expected through standard government contracting reporting mechanisms. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.

Related Government Programs

VA Medical Facility Construction
Community Living Centers (CLCs)
Federal Building and Infrastructure Projects
Department of Veterans Affairs Capital Investments

Risk Flags

Potential for delays due to project complexity and duration.
Risk of unforeseen site conditions impacting budget and schedule.
Limited competition may affect optimal price discovery.
Dependence on contractor's past performance for successful execution.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $25.8 million to CDEEM CO. CONSTRUCTION CONTRACTOR IS TO PROVIDE ALL LABOR AND WORK NECESSARY TO BUILD AND COMPLETE THE COMMUNITY LIVING CENTER (CLC) PROJECT AT THE MONTROSE, NY VA MEDICAL CENTER.

Who is the contractor on this award?

The obligated recipient is CDEEM CO.

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 $25.8 million.

What is the period of performance?

Start: 2024-05-23. End: 2027-03-04.

What is the track record of CDEEM CO in completing large-scale government construction projects on time and within budget?

Assessing the track record of CDEEM CO requires a review of their past performance on similar federal contracts. Data on their historical project completion rates, adherence to schedules, and financial performance on prior government awards would be crucial. Specifically, looking at projects of comparable size and complexity, such as other healthcare facilities or institutional buildings, would provide the most relevant insights. A lack of readily available public data on past performance necessitates a deeper dive into contract databases and potentially agency performance evaluations to gauge their reliability and efficiency as a contractor for this significant VA project.

How does the per-square-foot construction cost of this CLC compare to similar facilities built by the VA or other federal agencies?

To benchmark the per-square-foot cost, we would need the total square footage of the completed CLC and compare it to the contract award amount of $25.8 million. This figure would then be divided by the total square footage to derive a per-square-foot cost. This metric would then be compared against data from recently awarded VA or other federal agency construction contracts for similar types of facilities (e.g., healthcare, residential care). Factors such as geographic location, labor costs, material prices, and specific design requirements can cause significant variations, so comparisons should ideally be made with projects in similar regions and with comparable complexity to ensure a fair assessment of value.

What are the primary risk indicators associated with this specific construction contract, and how are they being mitigated?

Primary risk indicators for this contract include potential delays due to the 1015-day duration, unforeseen site conditions common in construction, and potential fluctuations in material costs, although the firm fixed-price contract aims to mitigate the latter for the government. The 'full and open competition after exclusion of sources' procurement method might also indicate specific risks related to the excluded sources or the justification for their exclusion. Mitigation strategies would typically involve robust project management by the VA, contingency planning for site issues, clear contractual clauses for delays and change orders, and thorough pre-construction site assessments. The limited number of bidders (3) could also be a risk if it suggests a lack of qualified contractors or market consolidation.

What is the expected effectiveness of the new Community Living Center in addressing the VA's capacity for veteran residential care in the region?

The effectiveness of the new CLC will be measured by its ability to increase the VA's capacity for veteran residential care and improve the quality of life for residents. This includes factors such as the number of beds available, the range of services provided (medical, social, recreational), patient outcomes, and resident satisfaction. The CLC's design and operational plan, which are not detailed in the provided data, will be critical. Its success will depend on adequate staffing, integration with other VA healthcare services, and its ability to meet the evolving needs of aging veterans requiring long-term care. The project's completion within the projected timeline and budget will also be a key indicator of its effective execution.

How has VA spending on construction contracts for medical facilities evolved over the past five years, and where does this contract fit in?

Analyzing VA spending on construction contracts for medical facilities over the past five years would reveal trends in investment in healthcare infrastructure. This would involve aggregating data on contract awards for new construction, renovations, and expansions of VA hospitals, clinics, and residential care facilities. This specific $25.8 million contract for the Montrose CLC represents a significant, albeit singular, investment in residential care capacity. Understanding the broader spending patterns—whether overall construction budgets have increased or decreased, and the proportion allocated to new facilities versus upgrades—would provide context for this award. It could indicate a strategic focus on expanding residential care services or a response to specific capacity needs in the New York 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: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 36C77623R0156

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 651 DANVILLE DR, ORLANDO, FL, 32825

Business Categories: Black American Owned Business, Category Business, Corporate Entity Not Tax Exempt, DoT Certified Disadvantaged Business Enterprise, Minority Owned Business, Self-Certified Small Disadvantaged Business, Service Disabled Veteran Owned Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $25,839,000

Exercised Options: $25,839,000

Current Obligation: $25,839,000

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline