DoD awards $270M construction contract for VA Canandaigua, Phase II, with a 2,453-day duration

Contract Overview

Contract Amount: $270,399,187 ($270.4M)

Contractor: HBP Joint Venture

Awarding Agency: Department of Defense

Start Date: 2019-10-23

End Date: 2026-07-11

Contract Duration: 2,453 days

Daily Burn Rate: $110.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: VA CANANDAIGUA, PHASE II - BASE PROPOSAL

Place of Performance

Location: CANANDAIGUA, ONTARIO County, NEW YORK, 14424

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $270.4 million to HBP JOINT VENTURE for work described as: VA CANANDAIGUA, PHASE II - BASE PROPOSAL Key points: 1. Contract value of $270.39 million for a multi-year construction project. 2. Awarded under full and open competition, suggesting a competitive bidding process. 3. Definitive contract type indicates a long-term agreement for services. 4. Project duration of 2,453 days (approximately 6.7 years) points to a significant undertaking. 5. Fixed-price contract type shifts cost risk to the contractor. 6. No small business set-aside noted, potentially limiting direct small business participation.

Value Assessment

Rating: fair

The contract value of $270.39 million for a multi-year construction project requires benchmarking against similar large-scale federal building construction projects. Without specific details on the scope of work, it's challenging to assess value for money definitively. The firm fixed-price nature of the contract suggests that the contractor bears the risk of cost overruns, which can be a positive indicator for the government if the price is competitive. However, the long duration of the project (over 6 years) introduces potential risks related to material cost fluctuations and unforeseen site conditions that could impact the final cost if not adequately managed.

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 a bid. This typically suggests a robust bidding environment. The number of bidders is not specified, but the open competition mechanism is designed to foster price discovery and encourage competitive pricing by allowing multiple firms to vie for the contract. This approach generally benefits the government by promoting a wider range of proposals and potentially lower prices.

Taxpayer Impact: Taxpayers benefit from full and open competition as it generally leads to more competitive pricing and a wider selection of qualified contractors, increasing the likelihood of receiving the best value for their investment.

Public Impact

The primary beneficiaries are likely the Department of Veterans Affairs (VA) and its beneficiaries, who will receive improved facilities at the Canandaigua campus. The project will deliver significant construction services, likely involving new building construction, renovation, or infrastructure upgrades. The geographic impact is concentrated in Canandaigua, New York, potentially creating local employment opportunities. Workforce implications include job creation for construction workers, engineers, architects, and project managers in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long project duration (2,453 days) increases risk of cost escalation due to market volatility.
Lack of specified small business participation could limit opportunities for smaller firms.
Complexity of large-scale construction projects can lead to unforeseen challenges and delays.
Firm fixed-price contracts can sometimes disincentivize contractors from seeking cost efficiencies if the initial bid is too high.

Positive Signals

Full and open competition generally leads to better pricing and contractor selection.
Firm fixed-price contract shifts cost overrun risk to the contractor.
Award to HBP Joint Venture suggests a qualified entity was selected.
Long-term nature of the contract allows for sustained focus on project completion.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector (NAICS 236220). This sector is characterized by large-scale projects requiring significant capital investment and specialized expertise. Federal spending in construction is substantial, driven by the need to maintain and upgrade government facilities, including those for healthcare and administrative purposes. Benchmarks for similar projects would typically consider square footage, type of construction (e.g., hospital, office building), and location. The $270 million value positions this as a major federal construction undertaking.

Small Business Impact

The contract does not indicate any specific small business set-aside provisions (ss: false, sb: false). This means the contract was not specifically reserved for small businesses. While the prime contractor, HBP Joint Venture, might be a small business or include small business partners, the absence of a set-aside suggests that larger firms were likely the primary competitors. Subcontracting opportunities for small businesses may exist, but they are not guaranteed by the contract's structure. The overall impact on the small business ecosystem depends on the subcontracting plans of the prime contractor.

Oversight & Accountability

Oversight for this definitive contract will likely be managed by the contracting agency (Department of Defense, specifically the Department of the Army) and potentially the VA, given the project's location. Accountability measures are inherent in the firm fixed-price contract type, which holds the contractor responsible for delivering the project within the agreed-upon price. Transparency is typically facilitated through contract award databases and reporting requirements. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

VA Capital Asset Realignment for Enhanced Services (CARES) Act Projects
Department of Defense Military Construction Projects
Federal Building and Facilities Construction
General Services Administration (GSA) Public Buildings Service Projects

Risk Flags

Long project duration may increase risk of cost escalation or obsolescence.
Lack of specified small business participation.
Potential for scope creep in large, multi-year construction projects.
Contractor performance history needs verification for large-scale projects.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $270.4 million to HBP JOINT VENTURE. VA CANANDAIGUA, PHASE II - BASE PROPOSAL

Who is the contractor on this award?

The obligated recipient is HBP JOINT VENTURE.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $270.4 million.

What is the period of performance?

Start: 2019-10-23. End: 2026-07-11.

What is the specific scope of work for VA Canandaigua, Phase II, and how does it compare to similar construction projects awarded by the DoD or VA?

The provided data does not detail the specific scope of work for VA Canandaigua, Phase II. However, given the NAICS code 236220 (Commercial and Institutional Building Construction) and the substantial contract value of $270.39 million, it is likely a major construction or renovation project for the VA facility. To compare it to similar projects, one would need to analyze contracts for large-scale healthcare facilities, administrative buildings, or infrastructure upgrades awarded by federal agencies. Key comparison points would include the total square footage, type of construction (new build vs. renovation), specific functionalities (e.g., medical services, research labs), and the duration of the project. Without this granular information, a precise value-for-money assessment relative to market rates is difficult.

What is the track record of HBP Joint Venture in executing large-scale federal construction contracts, particularly those with long durations?

Information regarding the specific track record of 'HBP Joint Venture' in executing large-scale federal construction contracts is not provided in the given data. To assess their capabilities, one would need to research their past performance on similar projects, including their history with the Department of Defense, Department of Veterans Affairs, or other federal agencies. Key performance indicators to examine would include on-time and on-budget completion rates, quality of work, safety records, and any history of contract disputes or claims. A joint venture structure can sometimes indicate a pooling of resources and expertise, but the success of such ventures is highly dependent on the individual partners and their management.

How does the firm fixed-price contract type impact the risk profile for both the government and the contractor on this $270 million project?

The firm fixed-price (FFP) contract type shifts the majority of the cost risk to the contractor, HBP Joint Venture. This means that the contractor is obligated to complete the project for the agreed-upon price, regardless of unforeseen cost increases related to labor, materials, or other direct costs. For the government (Department of Defense/VA), this provides cost certainty and predictability, making budgeting easier. The primary risk for the government is that the contractor might cut corners on quality to maintain profitability if costs rise unexpectedly, or that the initial price might have been inflated to account for contractor risk. For the contractor, the risk is significant; they must accurately estimate all project costs and absorb any overruns. This FFP structure is generally favored by the government for construction projects where the scope is well-defined.

What are the potential implications of the 2,453-day duration on project management, cost control, and the long-term utility of the constructed facilities?

A project duration of 2,453 days (approximately 6.7 years) for a $270 million construction contract presents several implications. From a project management perspective, it requires sustained oversight, robust scheduling, and effective coordination over an extended period. Cost control becomes more challenging due to the potential for inflation in material prices and labor rates over such a long timeframe, even with an FFP contract. The government must ensure adequate funding is allocated and managed throughout the project lifecycle. For the long-term utility of the facilities, a lengthy construction period could mean that the completed structures might incorporate slightly dated technology or designs by the time they are operational, depending on the nature of the construction. However, it also allows for meticulous planning and execution, potentially leading to higher quality outcomes if managed effectively.

Given the 'full and open competition' award, what is the expected level of competition and its impact on the final price and quality of the construction services?

Awarding a contract under 'full and open competition' typically implies that multiple qualified bidders submitted proposals. This competitive environment is designed to drive down prices as contractors vie to win the award. The expectation is that the government receives a competitive price reflecting market conditions and the contractor's efficiency. Furthermore, competition generally encourages higher quality standards, as contractors aim to build a strong reputation for future bids. While the exact number of bidders isn't specified, the process itself suggests that the government had options and selected the best value proposal, balancing price, technical merit, and other factors. This process is intended to maximize taxpayer value.

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: W912QR19R0002

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1 CIRCLE ST, ROCHESTER, NY, 14607

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

Financial Breakdown

Contract Ceiling: $315,477,193

Exercised Options: $270,399,187

Current Obligation: $270,399,187

Actual Outlays: $60,740,611

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline