VA awards $22.2M construction contract for recreational therapy building, highlighting long-term project execution

Contract Overview

Contract Amount: $22,217,001 ($22.2M)

Contractor: Halbert Construction Company, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2013-09-30

End Date: 2020-05-15

Contract Duration: 2,419 days

Daily Burn Rate: $9.2K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: IGF::CT::IGF NEW AWARD FOR THE CONSTRUCTION OF RECREATIONAL THERAPY BUILDING AT THE VA PALO ALTO HEALTH CARE SYSTEM, PALO ALTO, CA 94304

Place of Performance

Location: PALO ALTO, SANTA CLARA County, CALIFORNIA, 94304

State: California Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $22.2 million to HALBERT CONSTRUCTION COMPANY, INC. for work described as: IGF::CT::IGF NEW AWARD FOR THE CONSTRUCTION OF RECREATIONAL THERAPY BUILDING AT THE VA PALO ALTO HEALTH CARE SYSTEM, PALO ALTO, CA 94304 Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract duration of approximately 2419 days (over 6 years) indicates a significant, long-term construction project. 3. The firm-fixed-price contract type aims to provide cost certainty for the government. 4. The project is located in Palo Alto, California, serving the VA Palo Alto Health Care System. 5. The contractor, Halbert Construction Company, Inc., secured this award after exclusions of sources, implying a specific justification for the procurement method. 6. This award falls under the Commercial and Institutional Building Construction NAICS code.

Value Assessment

Rating: fair

The total award amount of $22.2 million for a recreational therapy building appears substantial. Benchmarking against similar VA construction projects would be necessary to definitively assess value for money. The firm-fixed-price structure provides a degree of cost control, but the long duration could introduce risks if not managed effectively. Without specific cost breakdowns or comparisons to similar facilities, a precise value assessment is challenging.

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 phrasing is somewhat contradictory; typically, 'full and open' implies maximum competition. The 'after exclusion of sources' suggests that while the competition was open, certain potential bidders may have been excluded based on specific criteria or prior actions. The number of bids received (4) is moderate, indicating some level of competition, but the exclusion clause warrants further investigation into its impact on the final price and bidder pool.

Taxpayer Impact: While 'full and open' competition is generally favorable for taxpayers by promoting competitive pricing, the exclusion of sources could potentially limit the number of competitive bids and may have influenced the final negotiated price. Further details on the reasons for exclusion are needed to fully assess the impact on taxpayer value.

Public Impact

Veterans receiving care at the VA Palo Alto Health Care System will benefit from enhanced recreational therapy facilities. The construction project will create temporary employment opportunities in the Palo Alto, California area. The new building is intended to improve the quality of life and rehabilitation services for veterans. The project contributes to the modernization and expansion of healthcare infrastructure for the Department of Veterans Affairs.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The long contract duration (over 6 years) increases the risk of cost overruns due to inflation, material price fluctuations, and potential scope creep.
The 'exclusion of sources' clause in an otherwise 'full and open' competition raises questions about the fairness and breadth of the bidding process.
Lack of detailed cost breakdowns makes it difficult to assess the value for money and identify potential inefficiencies.
The firm-fixed-price contract, while offering cost certainty, might incentivize the contractor to cut corners on quality if not rigorously overseen, especially over such a long period.

Positive Signals

The award through 'full and open competition' suggests an effort to achieve competitive pricing.
The firm-fixed-price contract type provides a clear budget ceiling for the government.
The project addresses a specific need for enhanced recreational therapy facilities, directly benefiting veteran care.
The long-term nature of the contract indicates a significant investment in veteran healthcare infrastructure.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a broad category encompassing the building of non-residential structures. The market for such construction is typically driven by government infrastructure needs, private development, and institutional expansion. The VA's consistent investment in healthcare facilities represents a significant segment of this market. Comparable spending benchmarks would involve analyzing the cost per square foot or per bed for similar healthcare or institutional building projects across different regions and agencies.

Small Business Impact

The data indicates that small business participation (ss: false, sb: false) was not a primary focus for this specific award, as it was not set aside for small businesses and the contractor is not identified as a small business. This suggests that the primary competition was likely among larger, established construction firms. There is no explicit information on subcontracting plans for small businesses within this award, which could be a missed opportunity to engage the small business ecosystem in this significant project.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Veterans Affairs. As a definitive contract awarded through a competitive process, it is subject to standard government contracting oversight mechanisms, including contract performance monitoring, financial audits, and compliance checks. The long duration necessitates continuous oversight to ensure adherence to timelines, budget, and quality standards. The specific Inspector General for the VA would have jurisdiction over any investigations into fraud, waste, or abuse related to this contract.

Related Government Programs

VA Major Medical Facility Construction
Federal Building Construction Contracts
Department of Veterans Affairs Healthcare Infrastructure Projects
Commercial and Institutional Building Construction Awards

Risk Flags

Long contract duration may increase risk of cost escalation and scope creep.
Ambiguity in 'Full and Open Competition After Exclusion of Sources' requires further clarification.
Lack of detailed cost breakdown hinders value-for-money assessment.
Potential for contractor performance issues over an extended project timeline.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $22.2 million to HALBERT CONSTRUCTION COMPANY, INC.. IGF::CT::IGF NEW AWARD FOR THE CONSTRUCTION OF RECREATIONAL THERAPY BUILDING AT THE VA PALO ALTO HEALTH CARE SYSTEM, PALO ALTO, CA 94304

Who is the contractor on this award?

The obligated recipient is HALBERT CONSTRUCTION COMPANY, 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 $22.2 million.

What is the period of performance?

Start: 2013-09-30. End: 2020-05-15.

What is the track record of Halbert Construction Company, Inc. with federal contracts, particularly with the Department of Veterans Affairs?

A thorough review of Halbert Construction Company, Inc.'s federal contract history would be necessary to assess their track record. This would involve examining past performance on similar projects, including their success in meeting deadlines, staying within budget, and adhering to quality standards. Specifically, their history with the Department of Veterans Affairs (VA) would be crucial, looking for any patterns of performance issues, disputes, or successful project completions. Analyzing past contract awards, modifications, and any reported contract terminations or penalties would provide a comprehensive picture of their reliability and capability as a federal contractor. Without access to a detailed contract database or performance reports, it is difficult to provide a specific assessment of their track record.

How does the cost per square foot of this recreational therapy building compare to similar VA or other federal healthcare construction projects?

To benchmark the value for money, the cost per square foot of this $22.2 million project needs to be compared against similar facilities. This requires knowing the total square footage of the building, which is not provided in the data. Assuming a typical size for such a facility, one would then research recent VA or other federal healthcare construction projects of comparable scope and location. Factors such as regional construction costs, specific building requirements (e.g., specialized therapy equipment, accessibility features), and the age of comparable projects would need to be considered. A higher cost per square foot might be justifiable due to specialized design or higher labor costs in California, but a significant deviation from benchmarks could indicate potential overpricing or inefficiencies.

What are the specific risks associated with the long contract duration (over 6 years) for this construction project?

The extended duration of approximately 2419 days (over 6 years) for this construction project introduces several significant risks. Firstly, there is an increased exposure to market volatility, including potential fluctuations in material costs (e.g., steel, concrete, lumber) and labor rates, which could lead to cost overruns despite the firm-fixed-price structure if not adequately accounted for in the initial pricing. Secondly, the prolonged timeline elevates the risk of design obsolescence or changes in therapeutic needs and technology over the project's life cycle, potentially requiring costly modifications or scope adjustments. Thirdly, extended project durations can lead to contractor fatigue, potential loss of key personnel, and a diminished sense of urgency, which could impact project momentum and quality. Finally, regulatory changes or evolving building codes during the construction period may necessitate costly revisions to meet new standards.

What is the anticipated impact of this new recreational therapy building on veteran healthcare services at the VA Palo Alto Health Care System?

The construction of a dedicated recreational therapy building is expected to significantly enhance the services offered to veterans at the VA Palo Alto Health Care System. Recreational therapy plays a crucial role in physical rehabilitation, mental health treatment, and overall well-being for veterans, particularly those recovering from injuries, managing chronic conditions, or dealing with PTSD. A new, modern facility is likely to provide expanded capacity for various therapeutic activities, potentially including art therapy, music therapy, exercise programs, and social engagement opportunities. This improved infrastructure can lead to more comprehensive and effective treatment plans, better patient outcomes, and an overall improved quality of life for the veteran population served by the facility. It signifies a commitment to holistic care beyond traditional medical treatments.

How does the 'exclusion of sources' clause affect the transparency and competitiveness of this 'full and open' competition award?

The 'exclusion of sources' clause within a 'full and open' competition presents a potential conflict and raises questions about transparency and the true extent of competition. 'Full and open competition' is the statutory standard intended to ensure that all responsible sources are solicited and considered, thereby maximizing competition and achieving the best value for the government. When sources are excluded, it implies that certain potential bidders were deliberately not considered, possibly due to pre-award determinations of non-responsibility, past performance issues, or specific technical requirements that only a limited number of firms could meet. While such exclusions can be justified under specific circumstances (e.g., national security, unique capabilities), they inherently reduce the competitive pool. The lack of detailed justification for these exclusions in the provided data makes it difficult to assess whether this action truly served the government's best interest or potentially limited price discovery and innovation.

What are the historical spending patterns for construction projects at the VA Palo Alto Health Care System?

Analyzing historical spending patterns for construction projects at the VA Palo Alto Health Care System would provide valuable context for this $22.2 million award. This would involve examining past capital investments in facility upgrades, new construction, and major renovations over several fiscal years. Key metrics to consider would include the average project size, the frequency of major construction initiatives, the types of projects undertaken (e.g., medical wards, research labs, administrative buildings), and the typical procurement methods used (e.g., competitive bidding, sole-source). Understanding these patterns can reveal trends in VA facility modernization efforts, identify periods of high or low capital expenditure, and help assess whether this current award aligns with historical investment levels or represents a significant departure. It can also shed light on the VA's capacity to manage large-scale construction projects effectively over time.

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: VA101-13-R-0109

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 330 S MAGNOLIA AVE STE 203, EL CAJON, CA, 92020

Business Categories: Category Business, Service Disabled Veteran Owned Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $22,217,001

Exercised Options: $22,217,001

Current Obligation: $22,217,001

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline