VA awards $20.7M contract for design services at San Diego VAMC, spanning over 16 years

Contract Overview

Contract Amount: $20,728,634 ($20.7M)

Contractor: Gkkworks Construction Services

Awarding Agency: Department of Veterans Affairs

Start Date: 2009-08-31

End Date: 2025-12-31

Contract Duration: 5,966 days

Daily Burn Rate: $3.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: AE CONTRACT FOR DESIGN SERVICES AT VAMC SAN DIEGO, CA. SEISMIC SCI AND CLC.

Place of Performance

Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92161

State: California Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $20.7 million to GKKWORKS CONSTRUCTION SERVICES for work described as: AE CONTRACT FOR DESIGN SERVICES AT VAMC SAN DIEGO, CA. SEISMIC SCI AND CLC. Key points: 1. Contract value of $20.7M for design services indicates a significant investment in facility upgrades. 2. The long duration of nearly 16 years suggests a phased approach or ongoing need for design expertise. 3. A firm fixed-price contract type aims to control costs and provide budget certainty. 4. The contract was awarded through full and open competition, suggesting a robust bidding process. 5. The primary contractor, GKKWORKS CONSTRUCTION SERVICES, will provide architectural services. 6. This contract supports the Department of Veterans Affairs' infrastructure modernization efforts.

Value Assessment

Rating: good

The contract value of $20.7 million for architectural services over a 16-year period appears reasonable given the scope of facility design and upgrades. While specific benchmarks for VAMC seismic retrofitting and design are not readily available, the firm fixed-price structure suggests an effort to manage costs effectively. The long duration may reflect the complexity and phased nature of the project, potentially leading to better value over time compared to multiple short-term contracts. Further analysis would require comparing the per-square-foot design costs or specific service rates against industry averages for similar large-scale healthcare facility projects.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through full and open competition, indicating that multiple qualified bidders had the opportunity to submit proposals. The presence of 5 bids suggests a healthy level of interest and competition for this significant design services contract. This competitive environment is generally favorable for price discovery and ensuring the government receives competitive pricing for the services rendered.

Taxpayer Impact: Taxpayers benefit from a competitive bidding process that is expected to drive down costs and ensure the most cost-effective solution is selected for the design services.

Public Impact

Veterans will benefit from improved and potentially safer healthcare facilities at the VAMC San Diego. The contract delivers essential architectural and design services for facility upgrades and modernization. The geographic impact is focused on San Diego, California, specifically the VAMC. The contract supports the architecture and engineering workforce, potentially creating or sustaining jobs in these fields.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (nearly 16 years) could introduce risks related to scope creep or changing requirements over time.
Firm fixed-price contracts can sometimes lead to contractors cutting corners if not adequately monitored, though this is less common in design services.
Reliance on a single primary contractor for an extended period might limit flexibility in adopting new technologies or design approaches.

Positive Signals

Full and open competition suggests a thorough vetting process and potential for best-value selection.
The firm fixed-price contract provides cost certainty for the Department of Veterans Affairs.
The contract's focus on seismic retrofitting addresses critical safety and operational needs for the VAMC.

Sector Analysis

The architectural services sector is a critical component of the construction and infrastructure industry. This contract falls within the broader category of professional, scientific, and technical services, specifically focusing on architectural design. The market for such services is competitive, with firms ranging from small specialized studios to large multinational corporations. The Department of Veterans Affairs is a significant client within this sector, consistently investing in the modernization and expansion of its healthcare facilities nationwide. Benchmarking this contract would involve comparing the total value against the square footage designed or the complexity of the seismic retrofitting requirements.

Small Business Impact

The data indicates that this contract was not set aside for small businesses, and there is no explicit mention of small business subcontracting requirements. Therefore, the direct impact on the small business ecosystem is likely minimal unless the prime contractor voluntarily engages small businesses in subcontracting roles. Further investigation into the contractor's subcontracting plan would be necessary to determine the extent of small business participation.

Oversight & Accountability

Oversight for this contract will primarily be managed by the Department of Veterans Affairs contracting officers and project managers. Accountability measures are inherent in the firm fixed-price contract structure, requiring the contractor to deliver specified services within the agreed-upon price. Transparency is facilitated through contract award databases and public reporting mechanisms. The VA's Office of Inspector General may also conduct audits or investigations if concerns regarding performance or financial integrity arise.

Related Government Programs

VA Major Medical Facility Lease Program
VA Capital Asset Realignment for Enhanced Services (CARES)
Federal Buildings Fund
Military Construction, Veterans Affairs, and Related Agencies Appropriations Act

Risk Flags

Long-term contract duration
Potential for scope creep
Need for robust oversight

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $20.7 million to GKKWORKS CONSTRUCTION SERVICES. AE CONTRACT FOR DESIGN SERVICES AT VAMC SAN DIEGO, CA. SEISMIC SCI AND CLC.

Who is the contractor on this award?

The obligated recipient is GKKWORKS CONSTRUCTION SERVICES.

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 $20.7 million.

What is the period of performance?

Start: 2009-08-31. End: 2025-12-31.

What is the track record of GKKWORKS CONSTRUCTION SERVICES with the Department of Veterans Affairs?

GKKWORKS CONSTRUCTION SERVICES has a history of working with the Department of Veterans Affairs, as evidenced by this contract. To fully assess their track record, a review of past VA contracts awarded to GKKWORKS would be necessary. This would include examining performance evaluations, any past disputes or contract modifications, and the overall success of previous projects. A detailed analysis would look at the types of services provided, the value of those contracts, and the timeliness and quality of their delivery. Understanding their history with the VA provides insight into their reliability and capability in fulfilling government requirements, particularly within the healthcare infrastructure domain.

How does the $20.7 million contract value compare to similar VAMC design service contracts?

Comparing the $20.7 million contract value requires context regarding the scope and duration. For a single VAMC facility, especially one requiring seismic retrofitting and extensive design services over nearly 16 years, this figure is substantial but potentially justifiable. Benchmarking against similar large-scale healthcare facility design projects, particularly those involving complex structural upgrades or new construction, would be informative. Factors such as the size of the facility (in square footage), the specific seismic zone requirements, and the extent of renovations versus new builds significantly influence costs. Without specific comparable project data, it's difficult to definitively state if this represents high or low value, but the long duration and specialized nature suggest a significant undertaking.

What are the primary risks associated with a contract of this duration (nearly 16 years)?

The primary risks associated with a contract spanning nearly 16 years include potential scope creep, where project requirements may evolve significantly over time, leading to cost overruns or disputes if not managed carefully. There's also the risk of technological obsolescence, where design standards or technologies might change, requiring costly updates or revisions. Contractor performance can degrade over long periods, and key personnel may change. Furthermore, economic fluctuations or changes in government funding priorities could impact the project's continuity or scope. Effective contract management, clear change order processes, and regular performance reviews are crucial to mitigate these long-term risks.

How effective is a firm fixed-price contract for long-term design services like this?

A firm fixed-price (FFP) contract is generally effective for design services when the scope of work is well-defined and unlikely to change substantially. For long-term projects, its effectiveness hinges on robust initial planning and a clear mechanism for managing inevitable changes. The FFP structure provides cost certainty for the government, shifting the risk of cost overruns to the contractor. However, for extended durations, the risk of the contractor underestimating costs or facing unforeseen challenges increases. This can sometimes lead to reduced quality if not properly monitored, or extensive change order negotiations. The VA's ability to clearly define requirements upfront and manage changes effectively will be key to the success of this FFP contract over its long term.

What is the historical spending trend for architectural services by the Department of Veterans Affairs?

The Department of Veterans Affairs consistently allocates significant funds towards architectural and engineering services to maintain and upgrade its vast network of healthcare facilities. Historical spending data would likely show a steady or increasing trend, driven by the aging infrastructure of many VAMCs and the ongoing need for modernization, expansion, and compliance with evolving healthcare standards and building codes, including seismic requirements. Major capital investments and specific initiatives, such as seismic retrofitting programs, would contribute to fluctuations in annual spending. Analyzing VA's historical spending on architectural services provides context for the scale and importance of contracts like the one awarded to GKKWORKS.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Architectural Services

Product/Service Code: ARCHITECT/ENGINEER SERVICES › ARCH-ENG SVCS - CONSTRUCTION

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: ARCHITECT-ENGINEER FAR 6.102

Solicitation ID: VA-101-09-RP-0025

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: THE Cannon Corporation

Address: 2355 MAIN ST STE 220, IRVINE, CA, 92614

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Minority Owned Business, Not Designated a Small Business, Special Designations, Indian (Subcontinent) American Owned Business, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $27,665,768

Exercised Options: $23,165,068

Current Obligation: $20,728,634

Actual Outlays: $4,403,945

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Timeline