VA awards $13.8M for Butler VAMC warehouse construction, emphasizing firm fixed-price terms

Contract Overview

Contract Amount: $13,880,000 ($13.9M)

Contractor: MRP Stefanik JV, LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2025-09-11

End Date: 2027-03-12

Contract Duration: 547 days

Daily Burn Rate: $25.4K/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: MINOR CONSTRUCTION WAREHOUSE BUTLER VAMC

Place of Performance

Location: BUTLER, BUTLER County, PENNSYLVANIA, 16001

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $13.9 million to MRP STEFANIK JV, LLC for work described as: MINOR CONSTRUCTION WAREHOUSE BUTLER VAMC Key points: 1. Contract awarded to MRP Stefanik JV, LLC for warehouse construction at Butler VAMC. 2. The contract utilizes a firm fixed-price structure, aiming to control costs. 3. Competition was full and open after exclusion of sources, indicating a competitive process. 4. The project duration is 547 days, aligning with typical construction timelines. 5. This award falls under the Commercial and Institutional Building Construction NAICS code. 6. The award value of $13.8 million is a significant investment in facility infrastructure.

Value Assessment

Rating: good

The contract value of $13.8 million for warehouse construction appears reasonable for a project of this scope. While specific benchmarks for VA warehouse construction are not readily available, the firm fixed-price nature suggests a defined cost ceiling. The award to MRP Stefanik JV, LLC, a joint venture, indicates a potentially capable entity for this type of work. Further analysis would require comparison to similar VA facility construction projects or private sector benchmarks for comparable warehouse sizes and complexities.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

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 may have been excluded based on specific criteria, possibly related to past performance, technical capabilities, or other pre-qualification requirements. The presence of 3 bidders suggests a moderate level of competition, which is generally favorable for price discovery and achieving a fair market price.

Taxpayer Impact: A competitive bidding process, even with exclusions, generally benefits taxpayers by encouraging multiple firms to offer their best pricing and terms to secure the contract.

Public Impact

Veterans receiving services at the Butler VAMC will benefit from improved logistical support and storage capabilities. The construction project will deliver a new warehouse facility, enhancing operational efficiency. The geographic impact is localized to Butler, Pennsylvania, and the surrounding region served by the VAMC. The project is expected to create temporary employment opportunities for construction workers in the area.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if initial scope is underestimated, despite fixed-price terms.
Dependence on the performance and financial stability of the joint venture, MRP Stefanik JV, LLC.
Risk of delays due to unforeseen site conditions or material availability issues.
Ensuring compliance with all VA construction standards and regulations.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Award to a joint venture may leverage specialized expertise from multiple entities.
The project addresses a clear need for improved infrastructure at the VAMC.
Competitive bidding process likely resulted in a more favorable price.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, specifically NAICS code 236220. This sector encompasses the construction of non-residential buildings. The market for federal construction projects is substantial, with agencies like the Department of Veterans Affairs consistently investing in facility upgrades and new builds to support their operations and beneficiaries. Benchmarks for similar projects would typically consider square footage, complexity of systems (HVAC, electrical, plumbing), and site-specific requirements.

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 for small businesses mandated by a set-aside. However, the prime contractor, MRP Stefanik JV, LLC, may choose to subcontract portions of the work to small businesses as part of their overall project management strategy, which could indirectly benefit the small business ecosystem.

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 within the firm fixed-price contract terms, which stipulate specific deliverables and timelines. Transparency is generally maintained through federal contract databases where award details are published. Inspector General jurisdiction would apply if any fraud, waste, or abuse related to the contract is suspected or reported.

Related Government Programs

Department of Veterans Affairs Facility Construction
Federal Building and Infrastructure Projects
Warehouse and Logistics Facilities Construction
Commercial Building Construction Contracts

Risk Flags

Potential for scope creep despite fixed-price terms.
Contractor performance risk.
Unforeseen site conditions.
Compliance with VA construction standards.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $13.9 million to MRP STEFANIK JV, LLC. MINOR CONSTRUCTION WAREHOUSE BUTLER VAMC

Who is the contractor on this award?

The obligated recipient is MRP STEFANIK JV, 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 $13.9 million.

What is the period of performance?

Start: 2025-09-11. End: 2027-03-12.

What is the track record of MRP Stefanik JV, LLC in completing similar federal construction projects?

Information regarding the specific track record of MRP Stefanik JV, LLC, particularly as a joint venture, requires further investigation beyond the provided data. Federal procurement databases and contractor performance systems (like the Contractor Performance Assessment Reporting System - CPARS) would need to be consulted to assess their past performance on similar projects. This would include evaluating their history of on-time delivery, adherence to budget, quality of work, and overall client satisfaction. Without this detailed performance history, it is difficult to definitively assess their capability to successfully execute this $13.8 million warehouse construction project for the VA.

How does the awarded price of $13.8 million compare to similar VA warehouse construction projects?

Benchmarking the $13.8 million award against similar VA warehouse construction projects requires access to a broader dataset of federal contract awards. Key comparison factors would include the square footage of the warehouse, the complexity of its intended use (e.g., climate control, specialized storage), the geographic location (which influences labor and material costs), and the specific year of award. While the firm fixed-price nature provides cost certainty, a detailed comparison would involve analyzing cost per square foot or cost per cubic foot for comparable projects. Without such comparative data, assessing whether this price represents excellent, good, or fair value is challenging.

What are the primary risks associated with this firm fixed-price construction contract?

The primary risks associated with this firm fixed-price contract, despite its cost certainty for the government, revolve around potential scope creep, unforeseen site conditions, and contractor performance. If the initial scope definition is incomplete or inaccurate, the contractor may seek change orders, potentially increasing the total cost. Unforeseen subsurface conditions (e.g., soil issues, underground utilities) can lead to delays and necessitate contract modifications. Furthermore, the contractor's financial stability and management capacity are critical; any issues on their end could jeopardize project timelines and quality. The VA must maintain robust oversight to manage these risks effectively.

How effective is the 'Full and Open Competition After Exclusion of Sources' method in ensuring value for taxpayers?

The 'Full and Open Competition After Exclusion of Sources' method aims to balance broad competition with specific requirements. By excluding certain sources, the government can ensure that bidders possess particular qualifications, certifications, or past performance relevant to the project's complexity, potentially leading to higher quality outcomes. However, if the exclusions are too broad or not adequately justified, it could limit the number of potential bidders, thereby reducing competitive pressure and potentially leading to higher prices than true full and open competition. The effectiveness for taxpayers hinges on whether the exclusions were necessary and well-defined, ensuring qualified bidders still competed vigorously.

What is the historical spending pattern for warehouse construction by the Department of Veterans Affairs?

Analyzing the historical spending patterns for warehouse construction by the Department of Veterans Affairs would involve examining contract awards over several fiscal years. This would reveal trends in the frequency, size, and average cost of such projects. Understanding this history helps in contextualizing the current $13.8 million award. For instance, if VA typically awards multiple smaller warehouse projects annually, this single larger award might represent a consolidation or a specific strategic initiative. Conversely, if such large-scale construction is infrequent, it might indicate a significant new investment in logistical infrastructure.

What are the potential long-term operational benefits of this new warehouse facility for the Butler VAMC?

The long-term operational benefits of a new warehouse facility for the Butler VAMC are likely to be substantial. Improved storage capacity and organization can lead to more efficient inventory management, reducing waste and ensuring critical supplies are readily available. Better facilities can enhance the safety and security of stored goods, including medical supplies and equipment. Furthermore, a modern, purpose-built warehouse can streamline logistical processes, potentially reducing operational costs associated with handling, distribution, and maintenance over the facility's lifespan. This ultimately supports the VAMC's core mission of providing healthcare services to veterans.

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: 36C77625B0029

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 320 CANTERBURY DR, ALIQUIPPA, PA, 15001

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: $13,880,000

Exercised Options: $13,880,000

Current Obligation: $13,880,000

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline