MSK Construction Inc. awarded $10.7M contract for VA Durham VAMC building expansion

Contract Overview

Contract Amount: $10,706,008 ($10.7M)

Contractor: MSK Construction Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2017-07-20

End Date: 2025-12-15

Contract Duration: 3,070 days

Daily Burn Rate: $3.5K/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: EXPAND OR SUITE IN BUILDING 1 D-WING AT DURHAM VAMC IGF::OT::IGF

Place of Performance

Location: DURHAM, DURHAM County, NORTH CAROLINA, 27705

State: North Carolina Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $10.7 million to MSK CONSTRUCTION INC for work described as: EXPAND OR SUITE IN BUILDING 1 D-WING AT DURHAM VAMC IGF::OT::IGF Key points: 1. Contract value appears reasonable for a large-scale construction project of this nature. 2. Full and open competition was utilized, suggesting a competitive bidding process. 3. The contract duration is substantial, indicating a long-term commitment to the project. 4. Fixed-price contract type helps mitigate cost overrun risks for the government. 5. Project is located in North Carolina, impacting local construction workforce and economy. 6. The North American Industry Classification System (NAICS) code 236220 points to commercial and institutional building construction.

Value Assessment

Rating: good

The contract value of $10.7 million for building expansion at the Durham VAMC seems within the expected range for a project of this scope. Benchmarking against similar-sized federal construction projects for healthcare facilities would provide a more precise value-for-money assessment. The firm fixed-price structure is generally favorable for controlling costs, but the long duration could introduce some escalation risks if not managed carefully. Without specific cost breakdowns or comparisons to private sector projects, 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 the solicitation was broadly advertised, and all responsible sources were permitted to submit offers. While the data indicates 6 bids were received, the specific details of the bidding process and the number of unique bidders are not fully elaborated. A robust competition typically leads to better pricing and value for the government.

Taxpayer Impact: The use of full and open competition is beneficial for taxpayers as it encourages multiple companies to bid, driving down prices and ensuring the government receives competitive offers.

Public Impact

Veterans in the Durham, NC area will benefit from expanded healthcare facilities. The project will create jobs in the construction sector in North Carolina. Improved infrastructure at the VA Medical Center will enhance service delivery. Local businesses may see increased activity due to the construction project.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for construction delays impacting facility readiness.
Risk of unforeseen site conditions requiring change orders.
Long contract duration may expose project to material price fluctuations.

Positive Signals

Firm fixed-price contract limits cost escalation.
Full and open competition suggests a competitive award.
Project addresses critical infrastructure needs for veteran healthcare.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, specifically for a healthcare facility. The construction market for healthcare infrastructure is significant, driven by the need for modern, efficient medical facilities. Projects like this are crucial for maintaining and expanding healthcare access. Comparable spending benchmarks would typically be found in data related to VA construction projects or other federal healthcare facility builds.

Small Business Impact

The data indicates that small business participation (ss: false, sb: false) was not a specific set-aside requirement for this contract. While there's no explicit small business set-aside, the prime contractor, MSK Construction Inc., may still engage small businesses as subcontractors. The impact on the small business ecosystem would depend on the subcontracting opportunities created and whether small businesses are actively sought for specialized roles within the project.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Veterans Affairs (VA) contracting officers and project managers. The VA has established procurement regulations and oversight mechanisms to ensure contract compliance and performance. Transparency is generally maintained through contract award databases and reporting. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

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

Risk Flags

Long contract duration may increase risk of cost escalation or material price volatility.
Potential for unforeseen site conditions requiring costly change orders.
Need for robust oversight to ensure quality and adherence to schedule over the project's lifespan.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $10.7 million to MSK CONSTRUCTION INC. EXPAND OR SUITE IN BUILDING 1 D-WING AT DURHAM VAMC IGF::OT::IGF

Who is the contractor on this award?

The obligated recipient is MSK CONSTRUCTION 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 $10.7 million.

What is the period of performance?

Start: 2017-07-20. End: 2025-12-15.

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

Information regarding MSK Construction Inc.'s specific track record on federal contracts, especially with the Department of Veterans Affairs, is not detailed in the provided data. A comprehensive analysis would require reviewing past performance evaluations, contract history, and any reported disputes or awards associated with the company. Examining their portfolio of completed VA projects, their adherence to schedules and budgets on previous similar endeavors, and any client feedback would offer crucial insights into their reliability and capability for executing this current $10.7 million building expansion.

How does the awarded price of $10.7 million compare to similar VA medical facility construction projects?

The awarded price of $10.7 million for the building expansion at the Durham VAMC needs to be benchmarked against similar projects to assess value for money. Factors such as the square footage of the expansion, the complexity of the construction (e.g., specialized medical equipment integration), the geographic location's cost of living and labor, and the specific year of award are critical for a fair comparison. Without access to a database of comparable VA construction contracts with detailed cost breakdowns, it is difficult to definitively state whether this price is high, low, or average. However, for a significant facility expansion, this figure is not inherently unreasonable.

What are the primary risks associated with a firm fixed-price contract for a project spanning over two years?

While a firm fixed-price (FFP) contract is designed to protect the government from cost overruns, a long duration (3070 days, approximately 8.5 years) for such a contract introduces specific risks. The primary risk is that the contractor may face unforeseen increases in material costs, labor rates, or regulatory compliance expenses over the extended period. If these costs escalate significantly beyond what was anticipated during the bidding phase, the contractor might struggle to complete the project profitably, potentially leading to quality compromises or even contract termination. Conversely, if costs decrease, the government might have overpaid relative to the final market conditions. Effective contract management and monitoring are crucial to mitigate these risks.

What is the expected impact of this construction project on the delivery of healthcare services to veterans in the Durham area?

This contract for expanding the building at the Durham VAMC is expected to have a positive impact on the delivery of healthcare services to veterans. An expansion typically signifies an increase in capacity, potentially allowing for more patient appointments, the introduction of new medical services, or improved facilities for existing ones. This could lead to reduced wait times, better patient comfort, and enhanced overall healthcare quality. The specific benefits will depend on the nature of the expansion – whether it adds new wings, modernizes existing spaces, or accommodates advanced medical technology. Ultimately, the goal is to improve the healthcare experience and outcomes for the veteran population served by the facility.

How has federal spending on commercial and institutional building construction, particularly for healthcare facilities, trended in recent years?

Federal spending on commercial and institutional building construction, especially for healthcare facilities, has generally seen fluctuations influenced by appropriations, infrastructure initiatives, and the specific needs of agencies like the Department of Veterans Affairs. In recent years, there has been a sustained focus on modernizing aging federal infrastructure, including healthcare facilities, to improve efficiency and capacity. The VA, in particular, has had significant capital investment programs aimed at upgrading its medical centers. While specific year-over-year spending data for this precise sub-sector requires detailed analysis of federal budget reports and contract databases, the overall trend indicates continued investment in healthcare infrastructure to meet the needs of beneficiaries.

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: VA246-17-B-0500

Offers Received: 6

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1920 DUNBAR ST STE D, CHARLESTON, SC, 29407

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Self-Certified Small Disadvantaged Business, Service Disabled Veteran Owned Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $10,706,008

Exercised Options: $10,706,008

Current Obligation: $10,706,008

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline