DoD's $1.1B Fort Bliss Hospital contract awarded to Clark McCarthy Healthcare Partners II shows fair value despite limited competition

Contract Overview

Contract Amount: $1,100,727,120 ($1.1B)

Contractor: Clark Mccarthy Healthcare Partners II

Awarding Agency: Department of Defense

Start Date: 2013-01-29

End Date: 2020-02-29

Contract Duration: 2,587 days

Daily Burn Rate: $425.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: IGF::OT::IGF DESIGN-BID-BUILD FORT BLISS REPLACEMENT HOSPITAL, EL PASO, TX

Place of Performance

Location: EL PASO, EL PASO County, TEXAS, 79901

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $1.10 billion to CLARK MCCARTHY HEALTHCARE PARTNERS II for work described as: IGF::OT::IGF DESIGN-BID-BUILD FORT BLISS REPLACEMENT HOSPITAL, EL PASO, TX Key points: 1. The contract's final value of $1.1 billion represents a significant investment in military healthcare infrastructure. 2. While awarded through full and open competition, the limited number of bidders may have impacted price discovery. 3. The firm-fixed-price contract type suggests a degree of cost certainty for the government. 4. The project's duration of over 7 years indicates a complex and long-term construction undertaking. 5. The contract falls within the broad category of commercial and institutional building construction. 6. The geographic focus on El Paso, Texas, highlights regional military infrastructure development.

Value Assessment

Rating: fair

The final award amount of $1.1 billion for the Fort Bliss replacement hospital is substantial. Benchmarking this against similar large-scale healthcare construction projects is challenging due to unique military requirements and location-specific factors. However, the firm-fixed-price structure generally aims to control costs. Without detailed cost breakdowns or comparisons to private sector hospital construction of equivalent scale and complexity, a definitive value-for-money assessment is difficult, but the final cost appears within a reasonable range for such a large project.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. However, only five bids were received, which is a relatively low number for a contract of this magnitude. This limited number of bidders could suggest potential barriers to entry for smaller firms or a concentrated market for specialized healthcare construction. The competition level, while technically open, might not have driven the most aggressive pricing.

Taxpayer Impact: A full and open competition, even with a limited number of bidders, is generally favorable for taxpayers as it allows for a wider pool of potential offerors. However, the low bid count suggests that taxpayers may not have benefited from the most competitive pricing achievable if more firms had participated.

Public Impact

Military personnel and their families stationed at Fort Bliss will benefit from a modern, state-of-the-art healthcare facility. The project delivered essential healthcare services infrastructure for the U.S. Army. The geographic impact is concentrated in El Paso, Texas, supporting the local military installation. The construction phase likely created numerous jobs in the construction sector within the El Paso region. The completed hospital will provide long-term healthcare services, impacting the well-being of service members and their families.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns given the project's scale and duration, despite the firm-fixed-price structure.
Limited competition may have resulted in a higher-than-optimal price for taxpayers.
Complexity of large-scale hospital construction can lead to unforeseen challenges and delays.
Ensuring long-term operational efficiency and maintenance costs post-construction.

Positive Signals

Awarded under full and open competition, maximizing the potential pool of contractors.
Firm-fixed-price contract type provides cost certainty for the government.
Significant investment in critical military healthcare infrastructure.
Project completion addresses a long-standing need for an updated medical facility at Fort Bliss.

Sector Analysis

This contract falls under the Commercial and Institutional Building Construction sector, specifically focusing on large-scale healthcare facilities. The market for constructing military hospitals is specialized, often requiring adherence to strict government standards (e.g., DoD's Unified Facilities Criteria) and security protocols. Comparable spending benchmarks would typically involve other major hospital construction projects, both military and civilian, though direct comparisons are complicated by the unique demands of military installations. The overall construction market experiences cyclical demand, influenced by government spending priorities and economic conditions.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Consequently, there are no direct subcontracting implications specifically mandated for small business set-asides within this award. The prime contractor, Clark McCarthy Healthcare Partners II, would have the discretion to subcontract portions of the work. The impact on the small business ecosystem would depend on the prime contractor's subcontracting strategy and whether they actively sought to engage small businesses for specialized construction services or materials.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army and the Department of Defense. Given the significant dollar amount and the nature of construction projects, oversight likely involved contract management teams, quality assurance personnel, and potentially the Defense Contract Management Agency (DCMA). Transparency is typically managed through contract award databases and reporting requirements. Inspector General jurisdiction would apply if any allegations of fraud, waste, or abuse arose during the contract's lifecycle.

Related Government Programs

Military Construction, Army
Healthcare Facilities Construction
Department of Defense Construction Contracts
Large-Scale Infrastructure Projects
Fort Bliss Operations and Maintenance

Risk Flags

Potential for cost growth despite firm-fixed-price structure due to contract modifications.
Limited number of bidders may indicate reduced competition and potentially higher prices.
Long project duration increases exposure to market volatility and unforeseen issues.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $1.10 billion to CLARK MCCARTHY HEALTHCARE PARTNERS II. IGF::OT::IGF DESIGN-BID-BUILD FORT BLISS REPLACEMENT HOSPITAL, EL PASO, TX

Who is the contractor on this award?

The obligated recipient is CLARK MCCARTHY HEALTHCARE PARTNERS II.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $1.10 billion.

What is the period of performance?

Start: 2013-01-29. End: 2020-02-29.

What was the initial estimated cost versus the final award amount, and what factors contributed to any variance?

The provided data does not include the initial estimated cost, only the final award amount of $1,100,727,120.07. Therefore, a direct comparison to determine variance is not possible with the given information. Factors that typically contribute to cost variances in large construction projects include changes in scope, unforeseen site conditions, material price fluctuations, labor cost adjustments, and delays. For a project of this scale and duration (over 7 years), it is common for the final cost to deviate from initial estimates due to these dynamic factors. Without the initial estimate, it's impossible to quantify the variance or analyze the specific reasons for it in this case.

How does the per-square-foot cost of this hospital compare to similar military or civilian hospital construction projects?

The provided data does not include the square footage of the hospital, making a per-square-foot cost comparison impossible. To conduct such an analysis, one would need the total square footage of the facility and potentially a breakdown of costs associated with different functional areas (e.g., patient rooms, operating theaters, administrative spaces). Benchmarking against similar projects would require access to detailed cost data from comparable military or civilian hospital constructions, ideally adjusted for geographic location, inflation, and specific construction standards. Given the specialized nature of military healthcare facilities and the firm-fixed-price contract, direct comparisons can be complex.

What is the track record of Clark McCarthy Healthcare Partners II on similar large-scale federal healthcare construction projects?

Clark McCarthy Healthcare Partners II, as a joint venture, likely brings together expertise from its constituent companies. To assess their track record, one would need to examine past performance on similar projects, including their ability to deliver on time, within budget, and to required quality standards. Information on their past performance, including any past performance evaluations or contract awards for large federal healthcare facilities, would be crucial. This would involve searching federal contract databases and performance reporting systems to gauge their experience and success rate in executing complex healthcare construction projects for the government.

Were there any significant performance issues or contract modifications during the contract's lifecycle?

The provided data does not detail specific performance issues or contract modifications. The duration of the contract (2013-2020) suggests a lengthy construction period where modifications are plausible due to evolving requirements or unforeseen circumstances. A thorough analysis would require reviewing contract modification history, performance reports, and any associated documentation available through federal procurement systems or agency records. Significant issues could manifest as schedule delays, cost increases beyond initial projections (if not a firm-fixed-price contract), or disputes between the government and the contractor.

How does the final cost compare to the initial contract value, considering the contract type?

The contract type is 'FIRM FIXED PRICE' (pt: FIRM FIXED PRICE), which means the price was set at the time of award and generally does not change unless there are modifications to the contract scope. The data provides the final award amount ($1,100,727,120.07) but does not explicitly state the initial contract value. In a firm-fixed-price contract, the contractor assumes the risk of cost overruns. Therefore, the final award amount should ideally be very close to the initial contract value, barring any approved contract modifications that alter the scope of work or other contract terms. Without the initial value, a direct comparison is not possible, but the firm-fixed-price nature implies a strong expectation of cost containment.

What is the historical spending trend for similar healthcare construction projects by the Department of the Army?

Analyzing historical spending trends for similar healthcare construction projects by the Department of the Army would require accessing and aggregating data on past contracts within the 'Healthcare Facilities Construction' or related NAICS codes (like 236220 for Commercial and Institutional Building Construction) awarded by the Army over several fiscal years. This would involve identifying trends in contract values, number of awards, types of contract vehicles used, and average contract durations. Such an analysis could reveal patterns in investment, potential budget fluctuations, and the typical scale of projects undertaken by the Army in this sector, providing context for the Fort Bliss hospital contract.

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

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W9126G12R0054

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1341 N ROCK HILL RD, SAINT LOUIS, MO, 63124

Business Categories: Category Business, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $1,100,727,120

Exercised Options: $1,100,727,120

Current Obligation: $1,100,727,120

Subaward Activity

Number of Subawards: 94

Total Subaward Amount: $586,423,380

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline