VA awards $339M EHRM IU construction contract to AMCOR JV ONE LLC for Tennessee facility

Contract Overview

Contract Amount: $33,925,604 ($33.9M)

Contractor: Amcor JV ONE LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2024-08-14

End Date: 2026-11-03

Contract Duration: 811 days

Daily Burn Rate: $41.8K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: THE CONTRACTOR SHALL PROVIDE ALL TOOLS, EQUIPMENT, MATERIALS, LABOR, SUPERVISION, PERSONNEL, AND SHALL DO ALL THINGS NECESSARY THAT WILL RESULT IN THE COMPLETION OF THE EHRM IU CONSTRUCTION PROJECT, IN ACCORDANCE WITH THE ATTACHED SPECS AND DRAWINGS.

Place of Performance

Location: MEMPHIS, SHELBY County, TENNESSEE, 38104

State: Tennessee Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $33.9 million to AMCOR JV ONE LLC for work described as: THE CONTRACTOR SHALL PROVIDE ALL TOOLS, EQUIPMENT, MATERIALS, LABOR, SUPERVISION, PERSONNEL, AND SHALL DO ALL THINGS NECESSARY THAT WILL RESULT IN THE COMPLETION OF THE EHRM IU CONSTRUCTION PROJECT, IN ACCORDANCE WITH THE ATTACHED SPECS AND DRAWINGS. Key points: 1. Contract value of $339.26 million represents a significant investment in healthcare infrastructure. 2. The project involves comprehensive construction services for an Electronic Health Record Modernization (EHRM) Inpatient Unit (IU). 3. Full and open competition was utilized, suggesting a robust bidding process. 4. The contract type is a definitive contract with a firm fixed price, indicating clear cost expectations. 5. The project duration is 811 days, spanning from August 2024 to November 2026. 6. The awardee, AMCOR JV ONE LLC, will be responsible for all aspects of construction, from labor to materials.

Value Assessment

Rating: good

The contract value of $339.26 million for the EHRM IU construction project appears to be within a reasonable range for large-scale institutional building projects. Benchmarking against similar healthcare facility construction contracts would provide a more precise value-for-money assessment. The firm fixed-price structure helps manage cost certainty for the government. However, without detailed cost breakdowns or comparisons to independent cost estimates, a definitive assessment of pricing efficiency 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 multiple bidders were likely considered. The specific number of bidders is not provided, but this procurement method generally fosters competitive pricing and encourages a wider range of potential contractors to participate. The level of competition is expected to drive better value for the government.

Taxpayer Impact: The use of full and open competition is beneficial for taxpayers as it promotes a competitive environment, which typically leads to more favorable pricing and a wider selection of qualified contractors, ultimately maximizing the return on investment for public funds.

Public Impact

The primary beneficiaries are the Department of Veterans Affairs (VA) and the veterans who will utilize the modernized healthcare facilities. The project will deliver essential construction services for an Inpatient Unit critical to the Electronic Health Record Modernization (EHRM) program. The geographic impact is focused on Tennessee, where the construction will take place. The project will likely create numerous jobs in the construction sector within the local Tennessee economy. Successful completion will enhance the VA's ability to provide efficient and integrated healthcare services through improved IT infrastructure.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen construction challenges arise, despite the firm fixed-price contract.
Dependence on the contractor's ability to manage complex construction timelines and supply chains effectively.
Risk of delays impacting the broader EHRM program rollout if construction milestones are not met.

Positive Signals

The use of full and open competition suggests a strong pool of qualified bidders, increasing the likelihood of selecting a capable contractor.
The firm fixed-price contract provides cost certainty and incentivizes the contractor to manage expenses efficiently.
The definitive contract structure allows for clear definition of scope and deliverables for the construction project.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a vital part of the broader construction industry. The healthcare construction sub-sector is particularly significant due to the specialized requirements and high investment often associated with medical facilities. The total federal spending on construction is substantial, and projects like this, supporting critical infrastructure upgrades such as EHRM, are a key component of government investment in public services and facilities.

Small Business Impact

The contract was awarded under full and open competition and does not indicate a small business set-aside. Therefore, the direct impact on small businesses as prime contractors is likely minimal. However, the prime contractor, AMCOR JV ONE LLC, may engage small businesses as subcontractors for specialized services or material supply, contributing to the small business ecosystem indirectly. Further analysis of subcontracting plans would be needed to fully assess the impact.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of Veterans Affairs contracting officers and project managers. The firm fixed-price nature of the contract provides a degree of accountability for cost control. Transparency will be facilitated through contract reporting mechanisms and potentially public contract databases. The Inspector General's office within the VA may conduct audits or investigations as deemed necessary to ensure compliance and prevent fraud.

Related Government Programs

Electronic Health Record Modernization (EHRM) Program
VA Capital Asset and Business Management Staff (CABMS)
Federal Buildings Fund
Military Construction, Veterans Affairs, and Related Agencies Appropriations Act

Risk Flags

Potential for schedule delays
Complexity of integrating IT infrastructure with physical construction
Contractor performance risk on large-scale projects
Supply chain disruptions impacting material availability

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $33.9 million to AMCOR JV ONE LLC. THE CONTRACTOR SHALL PROVIDE ALL TOOLS, EQUIPMENT, MATERIALS, LABOR, SUPERVISION, PERSONNEL, AND SHALL DO ALL THINGS NECESSARY THAT WILL RESULT IN THE COMPLETION OF THE EHRM IU CONSTRUCTION PROJECT, IN ACCORDANCE WITH THE ATTACHED SPECS AND DRAWINGS.

Who is the contractor on this award?

The obligated recipient is AMCOR JV ONE 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 $33.9 million.

What is the period of performance?

Start: 2024-08-14. End: 2026-11-03.

What is the track record of AMCOR JV ONE LLC in completing large-scale government construction projects, particularly within the healthcare sector?

Information regarding the specific track record of AMCOR JV ONE LLC in completing large-scale government construction projects, especially within the healthcare sector, is not detailed in the provided data. A comprehensive review would require examining past performance evaluations, project completion history, and any reported issues or successes on similar federal contracts. Understanding their experience with complex healthcare infrastructure and adherence to timelines and budgets is crucial for assessing their capability to deliver on this significant EHRM IU construction project.

How does the awarded amount of $339.26 million compare to similar healthcare construction projects undertaken by the VA or other federal agencies?

Benchmarking the $339.26 million award against similar healthcare construction projects is essential for evaluating value for money. Without specific data on comparable projects (e.g., size, scope, location, specific medical unit type), a precise comparison is difficult. However, large-scale institutional construction, especially for specialized facilities like inpatient units with integrated IT systems, typically involves substantial investment. The VA's history with major construction initiatives, such as its previous hospital builds or renovations, would serve as a relevant comparison point. A detailed analysis would involve looking at cost per square foot, complexity of systems installed, and project duration for similar endeavors.

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

Key risk indicators for this contract include potential construction delays due to unforeseen site conditions, material shortages, or labor disputes, which could impact the 811-day schedule. The integration of Electronic Health Record Modernization (EHRM) components within the physical construction adds a layer of complexity, increasing the risk of technical integration issues. Furthermore, managing a firm fixed-price contract for such a large project requires stringent cost control from the contractor to avoid financial overruns. The contractor's capacity to manage a project of this magnitude and complexity, including their supply chain management and subcontractor oversight, is also a critical risk factor.

How effective is the firm fixed-price contract type in ensuring cost control and value for money for this EHRM IU construction project?

The firm fixed-price (FFP) contract type is generally effective in ensuring cost control for the government by shifting the risk of cost overruns to the contractor. This structure incentivizes the contractor to manage expenses efficiently and complete the project within the agreed-upon budget. For the EHRM IU construction project, the FFP provides a clear financial ceiling, making the $339.26 million award a definitive cost. However, the effectiveness in achieving value for money also depends on the initial pricing accuracy and the contractor's ability to execute the scope without compromising quality or resorting to change orders that could inflate costs.

What are the historical spending patterns for construction projects related to the VA's Electronic Health Record Modernization (EHRM) program?

Historical spending patterns for the VA's EHRM program, particularly concerning construction components, would reveal trends in investment for facility upgrades supporting the digital health initiative. This specific contract for $339.26 million represents a significant capital investment. Analyzing past expenditures on similar construction projects, renovations, or new builds tied to EHRM implementation across different VA facilities would provide context on the scale and frequency of such investments. Understanding these patterns can help assess whether this award aligns with established budgetary trends or represents a new phase of investment.

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: 36C77624B0013_1

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 837 OAKTON ST STE F2, ELK GROVE VILLAGE, IL, 60007

Business Categories: Category Business, Limited Liability Corporation, Partnership or Limited Liability Partnership, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $33,925,604

Exercised Options: $33,925,604

Current Obligation: $33,925,604

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline