VA awards $21.7M contract for Lebanon CLC construction to Senate Builders & Construction Managers

Contract Overview

Contract Amount: $21,710,763 ($21.7M)

Contractor: Senate Builders & Construction Managers, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2024-09-26

End Date: 2026-08-08

Contract Duration: 681 days

Daily Burn Rate: $31.9K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: LEBANON CLC CONSTRUCTION

Place of Performance

Location: LEBANON, LEBANON County, PENNSYLVANIA, 17042

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $21.7 million to SENATE BUILDERS & CONSTRUCTION MANAGERS, INC. for work described as: LEBANON CLC CONSTRUCTION Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract type is a definitive contract with a firm fixed price, indicating clear cost expectations. 3. The duration of 681 days suggests a significant construction project. 4. The awardee, Senate Builders & Construction Managers, Inc., is a key player in this sector. 5. The project is located in Pennsylvania, potentially impacting the local construction workforce. 6. The contract is managed by the Department of Veterans Affairs, aligning with its mission to support veterans.

Value Assessment

Rating: good

The contract value of $21.7 million for a construction project of this scope appears reasonable. Benchmarking against similar VA construction projects or large-scale commercial building projects would provide a more precise value-for-money assessment. The firm fixed-price structure helps control costs for the government, but the final value depends on the execution and any potential change orders. Without specific cost breakdowns or comparisons to similar projects, a definitive assessment of exceptional value is difficult, but the competitive award suggests a fair market price was likely achieved.

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,' which is a nuanced category. It implies that while the competition was generally open, certain sources may have been excluded for specific reasons, or it could be a standard full and open process. With 6 bidders, the competition level appears healthy, which typically leads to better pricing and innovation. The presence of multiple bidders suggests that the market has sufficient capacity and interest in undertaking this type of work for the VA.

Taxpayer Impact: A competitive bidding process with multiple bidders generally benefits taxpayers by driving down costs and ensuring the government receives the best value for its investment. The presence of 6 bidders indicates a robust market response, likely resulting in a more cost-effective outcome than a sole-source or limited competition award.

Public Impact

The primary beneficiaries are veterans who will utilize the facilities at the Lebanon Community Living Center. The contract will deliver essential construction services to upgrade or build facilities. The geographic impact is focused on Lebanon, Pennsylvania, potentially creating local jobs and economic activity. The project will likely involve a significant number of construction workers, impacting the local labor market. The Department of Veterans Affairs will benefit from improved infrastructure to support its healthcare mission.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if change orders are extensive, despite the firm fixed-price structure.
Ensuring timely completion within the 681-day duration is critical to avoid delays in facility availability.
Quality of construction must meet VA standards to ensure long-term durability and safety.

Positive Signals

Awarded through full and open competition, indicating a competitive market and likely fair pricing.
Firm fixed-price contract provides cost certainty for the government.
The project directly supports the VA's mission to provide facilities for veteran care.

Sector Analysis

The construction sector is a significant part of the US economy, with institutional and commercial building construction representing a substantial segment. This contract falls within the commercial and institutional building construction sub-sector (NAICS 236220). Federal spending in this area is often driven by infrastructure upgrades, new facility development, and maintenance across various agencies, particularly those with large physical footprints like the VA. Comparable spending benchmarks would involve analyzing other large-scale healthcare or institutional construction projects awarded by federal agencies.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of specific subcontracting requirements for small businesses in the provided data. The award to a larger firm suggests that the scale and complexity of the project may have favored established construction management companies. Further analysis would be needed to determine if any subcontracting opportunities for small businesses exist within the scope of this larger contract.

Oversight & Accountability

The Department of Veterans Affairs, as the contracting agency, is responsible for oversight. The firm fixed-price contract type provides a degree of cost control. Transparency is generally maintained through federal contract databases like FPDS. Accountability measures would include performance reviews, adherence to contract terms, and potential penalties for non-compliance. The VA Office of Inspector General would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

Department of Veterans Affairs Medical Facilities Construction
Federal Building and Infrastructure Projects
General Services Administration (GSA) Construction Contracts
Community Living Center Construction Projects

Risk Flags

Potential for cost overruns due to change orders
Risk of project delays impacting facility availability
Ensuring adherence to VA construction quality standards

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $21.7 million to SENATE BUILDERS & CONSTRUCTION MANAGERS, INC.. LEBANON CLC CONSTRUCTION

Who is the contractor on this award?

The obligated recipient is SENATE BUILDERS & CONSTRUCTION MANAGERS, 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 $21.7 million.

What is the period of performance?

Start: 2024-09-26. End: 2026-08-08.

What is the track record of Senate Builders & Construction Managers, Inc. with federal contracts, particularly with the Department of Veterans Affairs?

Senate Builders & Construction Managers, Inc. has a history of securing federal contracts. A review of federal procurement data would reveal the extent of their past performance, including the types of projects awarded, their value, and their performance ratings. Specifically examining their contract history with the Department of Veterans Affairs would indicate their experience with VA-specific requirements, facility types, and regulatory environments. Consistent positive performance on previous VA projects would be a strong indicator of their capability to successfully execute this Lebanon CLC construction contract. Conversely, any history of significant performance issues, disputes, or contract terminations would raise concerns about their suitability for this current award.

How does the awarded price of $21.7 million compare to similar VA construction projects for Community Living Centers?

To benchmark the value, we would compare this $21.7 million contract against other VA Community Living Center (CLC) construction or renovation projects of similar size, scope, and complexity. Factors such as geographic location (construction costs vary regionally), specific facility requirements (e.g., number of beds, specialized medical equipment integration), and the duration of the project (681 days) are crucial for a fair comparison. If similar projects have been awarded for significantly less, or if this project's cost per square foot or per bed is notably higher than comparable projects, it could indicate potential issues with pricing or value for money. Conversely, if costs align with or are lower than benchmarks, it suggests a competitive and fair price was achieved.

What are the primary risks associated with this firm fixed-price construction contract, and how are they being mitigated?

The primary risk with a firm fixed-price (FFP) contract is the potential for the contractor to cut corners on quality or materials to maintain profitability if costs escalate unexpectedly. Another risk is scope creep, where unforeseen issues necessitate changes, leading to costly change orders that can erode the initial cost certainty. Mitigation strategies typically include robust contract administration by the VA, detailed specifications and quality assurance plans, regular site inspections, and a clear process for managing and approving any necessary change orders. The contractor's own risk management practices, including accurate initial bidding and contingency planning, are also critical. The presence of multiple bidders in the award process suggests that contractors assessed the risks and felt confident in their ability to deliver within the fixed price.

How effective is the 'full and open competition after exclusion of sources' method in ensuring the best value for taxpayers in this case?

The 'full and open competition after exclusion of sources' designation requires careful interpretation. If it signifies a standard full and open process where all responsible sources were permitted to compete, then it is generally effective in ensuring best value by fostering competition that drives down prices and encourages innovation. However, if 'exclusion of sources' implies specific limitations or pre-qualifications that narrowed the field beyond standard practices, its effectiveness in maximizing value could be diminished. The fact that six bidders participated suggests a reasonably competitive environment, which is positive for taxpayers. The key is understanding the rationale behind any exclusions to ensure they were justified and did not unduly restrict competition, thereby potentially increasing costs.

What is the historical spending pattern for construction projects at the Lebanon Community Living Center or similar VA facilities?

Analyzing historical spending patterns for construction at the Lebanon CLC or comparable VA facilities would provide context for this $21.7 million award. This involves examining past contracts for construction, renovation, or major maintenance at this specific CLC or similar CLCs nationwide. Key metrics to review include the frequency of such large contracts, their average value, the types of contractors awarded, and the duration of projects. Understanding historical spending can reveal trends, identify potential cost escalations over time, and highlight whether this current contract represents a typical investment or an outlier. It also helps assess the VA's consistent investment in its infrastructure and its approach to managing construction budgets for these vital facilities.

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: 36C77624R0026

Offers Received: 6

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2232 DEKALB PIKE, EAST NORRITON, PA, 19401

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: $21,710,763

Exercised Options: $21,710,763

Current Obligation: $21,710,763

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline