VA awards $17.4M contract for Miami hospital operating room renovation to SDV Construction Group

Contract Overview

Contract Amount: $17,447,041 ($17.4M)

Contractor: SDV Construction Group South, LLC

Awarding Agency: Department of Defense

Start Date: 2009-09-30

End Date: 2013-12-31

Contract Duration: 1,553 days

Daily Burn Rate: $11.2K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 8

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: VETERANS ADMINISTRATION CONTRACT FOR: RENOVATE MIAMI OPERATING ROOM, PHASE 1, MIAMI VETERANS ADMINISTRATION HOSPITAL, MIAMI, FLORIDA

Place of Performance

Location: MIAMI, MIAMI-DADE County, FLORIDA, 33101

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $17.4 million to SDV CONSTRUCTION GROUP SOUTH, LLC for work described as: VETERANS ADMINISTRATION CONTRACT FOR: RENOVATE MIAMI OPERATING ROOM, PHASE 1, MIAMI VETERANS ADMINISTRATION HOSPITAL, MIAMI, FLORIDA Key points: 1. Contract awarded for essential facility upgrades at Miami VA Hospital. 2. SDV Construction Group South, LLC secured the contract. 3. Project duration spans over four years, indicating a significant scope. 4. The contract type is Firm Fixed Price, providing cost certainty. 5. This award falls under commercial and institutional building construction. 6. The contract was competed after exclusion of sources, suggesting specific circumstances. 7. The award amount is substantial for a single renovation project.

Value Assessment

Rating: fair

The $17.4 million award for operating room renovation at the Miami VA Hospital appears to be a significant investment. Without specific benchmarks for similar operating room renovations in large VA facilities, a direct value-for-money assessment is challenging. However, the duration of the contract (over four years) suggests a complex project. The firm fixed-price nature provides some cost control, but the final cost relative to the delivered scope will be the ultimate measure of value. Further analysis would require comparison to similar projects' cost per square foot or per operating room.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES.' This designation implies that while the competition was intended to be open, certain sources were excluded, potentially due to specific requirements or prior relationships. The number of bidders (8) indicates some level of interest, but the exclusion of sources might limit the breadth of competition and potentially impact price discovery. Understanding the rationale behind the source exclusion is crucial for a complete assessment.

Taxpayer Impact: The exclusion of sources, even with 8 bidders, may mean that taxpayers did not benefit from the lowest possible price that a truly open competition might have yielded. The specific reasons for exclusion would determine the extent of this impact.

Public Impact

Veterans in the Miami area will benefit from improved healthcare facilities. The project delivers essential upgrades to the operating room infrastructure at the Miami VA Hospital. The geographic impact is concentrated in Miami, Florida. The construction activities will likely involve a local workforce, providing employment opportunities. Enhanced medical facilities can lead to better patient outcomes and increased capacity for procedures.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'after exclusion of sources' competition method warrants scrutiny to ensure fair market access.
The long contract duration could introduce risks related to cost overruns or scope creep if not managed tightly.
Lack of detailed performance metrics in the provided data makes it difficult to assess project execution quality.

Positive Signals

Firm Fixed Price contract type offers budget predictability.
The award to a specific construction group suggests a focused effort on facility improvement.
The project addresses critical infrastructure needs for veteran healthcare.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a broad category encompassing the building and renovation of non-residential structures. The market for healthcare facility construction and renovation is substantial, driven by the need for modern, efficient, and compliant medical spaces. This specific project targets a critical component of healthcare delivery – the operating room – suggesting a focus on specialized construction services. Comparable spending benchmarks would typically look at cost per square foot for hospital construction or renovation, adjusted for geographic location and project complexity.

Small Business Impact

The provided 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 stemming from a set-aside requirement. The prime contractor, SDV Construction Group South, LLC, would determine any subcontracting opportunities. Analysis of their past performance and subcontracting plans would be necessary to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense and the Department of the Army, as indicated by the agency and sub-agency. The contract type (Firm Fixed Price) implies that the contractor bears most of the cost risk, but oversight would still be necessary to ensure adherence to scope, quality standards, and timelines. Transparency would depend on the public availability of contract performance reports and any Inspector General reviews related to the project's execution and financial management.

Related Government Programs

VA Hospital Construction Projects
Medical Facility Renovations
Department of Defense Construction Contracts
Firm Fixed Price Construction Awards
Commercial Building Construction

Risk Flags

Competition Method: 'After Exclusion of Sources' requires justification.
Contract Duration: Extended period increases risk of cost escalation and scope creep.
Lack of Specific Performance Metrics: Difficulty in assessing contractor performance.
Potential for Limited Price Discovery: Due to exclusion of sources.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.4 million to SDV CONSTRUCTION GROUP SOUTH, LLC. VETERANS ADMINISTRATION CONTRACT FOR: RENOVATE MIAMI OPERATING ROOM, PHASE 1, MIAMI VETERANS ADMINISTRATION HOSPITAL, MIAMI, FLORIDA

Who is the contractor on this award?

The obligated recipient is SDV CONSTRUCTION GROUP SOUTH, LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $17.4 million.

What is the period of performance?

Start: 2009-09-30. End: 2013-12-31.

What is the track record of SDV Construction Group South, LLC on similar federal contracts, particularly in healthcare facility construction?

Assessing the track record of SDV Construction Group South, LLC requires a deep dive into their past performance on federal contracts. Specifically, examining their history with projects of similar scope and complexity, such as hospital renovations or operating room upgrades, is crucial. Data on their on-time completion rates, adherence to budget, and quality of work on previous VA or Department of Defense projects would provide valuable insights. A review of contract award databases and performance evaluation reports (like past performance information retrieval system - PPIRS) would be necessary to determine if they have a history of successful project delivery in the healthcare construction domain. Any past issues, disputes, or contract terminations would also be significant red flags.

How does the $17.4 million cost compare to the average cost of similar operating room renovation projects in large hospitals?

Benchmarking the $17.4 million cost requires detailed project specifications and access to comparative data. Factors such as the square footage of the renovated area, the extent of technological upgrades (e.g., advanced imaging equipment integration), the complexity of structural modifications, and the specific medical services supported by the operating rooms significantly influence costs. On average, hospital operating room renovations can range widely, from a few million dollars for minor upgrades to tens of millions for complete overhauls. Without knowing the specifics of the Miami VA project's scope (e.g., number of ORs, size, level of modernization), a precise comparison is difficult. However, for a major renovation of multiple operating rooms in a large facility, $17.4 million might fall within a reasonable range, provided the scope is extensive. A more accurate assessment would involve comparing cost per square foot or cost per operating room against similar projects in comparable geographic markets and facility types.

What are the primary risks associated with a four-year construction contract for a critical healthcare facility like an operating room?

A four-year duration for an operating room renovation presents several key risks. Firstly, **scope creep** is a significant concern; as the project progresses, unforeseen issues or evolving medical needs might lead to requests for additional work beyond the original contract scope, potentially increasing costs and extending timelines. Secondly, **material and labor cost escalation** over such a long period can impact the fixed-price contract if not adequately accounted for in the initial pricing. Thirdly, **technological obsolescence** is a risk; medical technology advances rapidly, and a renovation designed today might not fully accommodate future needs by its completion. Fourthly, **disruption to ongoing hospital operations** is a major challenge, requiring careful phasing and mitigation strategies to minimize impact on patient care. Finally, **contractor performance and financial stability** over an extended period need continuous monitoring to ensure project success and prevent delays or defaults.

What does 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' imply for the procurement process and potential cost savings?

The term 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' suggests a procurement process that initially aimed for broad participation but ultimately restricted the pool of eligible bidders. This typically occurs when specific criteria, such as unique capabilities, past performance on related systems, or proprietary technology, are required, leading the agency to exclude certain potential offerors. While the intent might be to ensure the best fit for a specialized need, excluding sources can limit the number of competitive bids received. This reduced competition may lead to higher prices than what could be achieved in a truly open market where all qualified vendors could participate. The justification for excluding sources is critical; if the exclusions were not well-founded or overly restrictive, it could indicate a missed opportunity for greater cost savings for taxpayers.

How has VA spending on hospital construction and renovation trended over the past five years, and where does this contract fit?

Analyzing VA spending trends on hospital construction and renovation over the past five years reveals a consistent and often increasing investment in upgrading and expanding healthcare infrastructure to meet the needs of veterans. Factors driving this trend include aging facilities, the need to incorporate new medical technologies, and the expansion of healthcare services. The VA's budget typically allocates significant portions to capital asset management, which includes construction and major renovations. This $17.4 million contract for operating room renovation fits within this broader trend of investment in critical medical infrastructure. It represents a specific, targeted expenditure aimed at enhancing a vital service area within a particular facility, contributing to the overall goal of modernizing the VA healthcare system. Tracking the total annual VA construction and renovation obligations would provide context for the scale of this individual award relative to the agency's overall capital spending.

Industry Classification

NAICS: Construction › Nonresidential Building Construction › Commercial and Institutional Building Construction

Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCT OF RESTORATION ACTIVITIES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 8

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 10460 SW 187 TER, MIAMI, FL, 90

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

Financial Breakdown

Contract Ceiling: $17,447,041

Exercised Options: $17,447,041

Current Obligation: $17,447,041

Contract Characteristics

Cost or Pricing Data: NO

Timeline