Department of Defense awards $59.2M contract for San Francisco VA seismic retrofit, raising value-for-money questions

Contract Overview

Contract Amount: $59,247,324 ($59.2M)

Contractor: Brice Builders, LLC

Awarding Agency: Department of Defense

Start Date: 2023-03-01

End Date: 2026-03-24

Contract Duration: 1,119 days

Daily Burn Rate: $52.9K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: SAN FRANCISCO VA MEDICAL CENTER BUILDING 8 SEISMIC RETROFIT PROJECT

Place of Performance

Location: SAN FRANCISCO, SAN FRANCISCO County, CALIFORNIA, 94121

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $59.2 million to BRICE BUILDERS, LLC for work described as: SAN FRANCISCO VA MEDICAL CENTER BUILDING 8 SEISMIC RETROFIT PROJECT Key points: 1. The contract's value, exceeding $59 million, warrants scrutiny for cost-effectiveness in seismic retrofitting. 2. Limited competition for this project may have impacted pricing and overall value. 3. The project's duration of over 1100 days suggests potential for cost overruns and schedule delays. 4. This contract represents significant federal investment in infrastructure modernization for veteran healthcare facilities. 5. The firm-fixed-price structure aims to control costs, but the absence of competition is a risk indicator.

Value Assessment

Rating: questionable

Benchmarking this contract's value is challenging without comparable seismic retrofit projects of similar scale and complexity in the San Francisco area. The firm-fixed-price structure, while intended to cap costs, does not inherently guarantee value, especially given the limited competition. The total award amount of over $59 million for a single building retrofit requires careful examination to ensure it aligns with industry standards for such specialized construction work. Without more data on the scope of work and specific engineering challenges, a definitive value assessment is difficult, but the lack of competitive bidding raises concerns about potential overpayment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not openly competed. This significantly limits the opportunity for price discovery and potentially leads to higher costs for taxpayers. The absence of multiple bidders means the government did not benefit from the competitive pressures that typically drive down prices and encourage innovation. The rationale for a sole-source award, such as unique capabilities or urgent need, would need to be thoroughly justified to ensure it was in the government's best interest.

Taxpayer Impact: Sole-source awards mean taxpayers may not be getting the best possible price, as there was no competitive pressure to lower bids. This can lead to inefficient use of public funds.

Public Impact

Veterans in the San Francisco Bay Area will benefit from improved safety and operational continuity at the VA Medical Center. The project delivers essential seismic retrofitting services to a critical healthcare infrastructure asset. The geographic impact is concentrated in San Francisco, California, addressing a specific regional need. The project will likely involve a skilled construction workforce, potentially creating temporary employment opportunities in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing, potentially increasing costs for taxpayers.
Long project duration (over 1100 days) increases risk of cost overruns and schedule delays.
Lack of transparency in the sole-source justification process.
High contract value without competitive benchmarking raises concerns about value for money.

Positive Signals

Firm-fixed-price contract provides cost certainty if scope is well-defined.
Addresses critical infrastructure needs for veteran healthcare.
Project is located in a region with significant seismic risk, enhancing facility resilience.

Sector Analysis

The construction sector, particularly heavy and civil engineering, is a significant area of federal spending. This contract falls under the 'Other Heavy and Civil Engineering Construction' NAICS code, indicating specialized infrastructure work. Federal spending in this area often involves large-scale projects like facility upgrades, repairs, and new construction, especially for critical infrastructure like military bases and medical centers. The market for seismic retrofitting is specialized, requiring specific engineering expertise and adherence to stringent building codes, particularly in seismically active regions like California.

Small Business Impact

The data indicates this contract was not set aside for small businesses, nor does it appear to have specific subcontracting goals for small businesses mentioned. As a sole-source award to Brice Builders, LLC, the direct impact on the small business ecosystem is limited unless Brice Builders itself is a small business or actively engages small businesses as subcontractors. Further investigation into subcontracting plans would be necessary to assess the broader impact on small business participation.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and inspection mechanisms, given it's an Army contract for a VA facility. The firm-fixed-price nature suggests a focus on adherence to the defined scope and schedule. Transparency regarding the sole-source justification and any subsequent modifications will be key. The Inspector General for the Department of Defense would likely have jurisdiction for audits and investigations related to potential fraud, waste, or abuse.

Related Government Programs

VA Medical Facility Construction
Seismic Retrofitting Projects
Department of Defense Infrastructure Modernization
Heavy and Civil Engineering Construction Contracts

Risk Flags

Sole-source award
High contract value
Long project duration
Potential for cost overruns

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $59.2 million to BRICE BUILDERS, LLC. SAN FRANCISCO VA MEDICAL CENTER BUILDING 8 SEISMIC RETROFIT PROJECT

Who is the contractor on this award?

The obligated recipient is BRICE BUILDERS, 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 $59.2 million.

What is the period of performance?

Start: 2023-03-01. End: 2026-03-24.

What is the specific justification for awarding this contract on a sole-source basis?

The provided data indicates the contract was awarded as 'NOT AVAILABLE FOR COMPETITION,' which is synonymous with a sole-source award. The specific justification for this determination is not included in the data. Typically, sole-source awards are made when only one responsible source is available or capable of providing the required service or supply. This could be due to unique technical capabilities, proprietary technology, urgent and compelling circumstances, or a lack of market research indicating other potential sources. Without the official justification document, it's impossible to definitively state the reason, but it implies that the Army determined that Brice Builders, LLC was the only viable option for this specific seismic retrofit project at the San Francisco VA Medical Center.

How does the $59.2 million award compare to similar seismic retrofit projects for healthcare facilities?

Directly comparing the $59.2 million award for the San Francisco VA Medical Center Building 8 seismic retrofit to similar projects is challenging without access to a comprehensive database of comparable federal and private sector construction contracts. Seismic retrofitting costs are highly variable, depending on factors such as the building's age and structural condition, the specific seismic risks of the location, the complexity of the required engineering solutions, and the extent of disruption to ongoing operations. However, for a single building retrofit of this scale, especially in a high-cost area like San Francisco, the amount is substantial. It would be beneficial to benchmark this against other large-scale hospital or medical facility seismic upgrades, considering the square footage, structural system, and seismic zone.

What are the primary risks associated with a sole-source contract of this magnitude?

The primary risks associated with a sole-source contract of this magnitude include a lack of competitive pricing, potentially leading to overpayment for services. Without competition, there is less incentive for the contractor to be highly efficient or innovative. There's also a risk that the government may not have explored all available options, potentially missing out on a better-qualified or more cost-effective contractor. Furthermore, sole-source awards can sometimes be perceived as lacking transparency, potentially leading to public scrutiny if the justification is not robust. The long duration of the project also introduces risks of scope creep, unforeseen conditions, and cost escalation, which are harder to mitigate without competitive pressure.

What is the expected impact of this project on the operational capacity of the San Francisco VA Medical Center?

The seismic retrofit project is intended to enhance the structural integrity and safety of Building 8 at the San Francisco VA Medical Center, ensuring its continued operation and resilience during seismic events. By upgrading the building's ability to withstand earthquakes, the project directly supports the VA's mission to provide uninterrupted healthcare services to veterans. While the construction phase itself may cause temporary disruptions, the long-term impact is positive, safeguarding critical medical infrastructure and ensuring that veterans have access to necessary care even after a major earthquake. The project aims to prevent catastrophic failure and maintain operational continuity for essential medical services housed within Building 8.

How does this contract fit into the broader context of federal spending on infrastructure and facility modernization?

This contract aligns with a broader federal trend of investing in infrastructure modernization, particularly for aging federal facilities, including those managed by the VA and DoD. Following numerous natural disasters and a growing awareness of infrastructure vulnerabilities, there has been increased emphasis on resilience and modernization. Seismic retrofitting is a critical component of this, especially in high-risk zones. The $59.2 million award reflects the significant capital investment required for such specialized projects. It is part of a larger portfolio of contracts aimed at ensuring the safety, security, and operational readiness of federal assets, contributing to both national security (DoD) and veteran welfare (VA).

Industry Classification

NAICS: Construction › Other Heavy and Civil Engineering Construction › Other Heavy and Civil Engineering Construction

Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCTION OF BUILDINGS

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W912P722R0004

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 3700 CENTERPOINT DR, ANCHORAGE, AK, 99503

Business Categories: 8(a) Program Participant, Alaskan Native Corporation Owned Firm, Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Minority Owned Business, Native American Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $59,297,761

Exercised Options: $59,297,761

Current Obligation: $59,247,324

Actual Outlays: $2,656,744

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline