As 2023 ticked down, it quickly became obvious that there wasn’t going to be a big announcement about the much-awaited Valencia County hospital — despite the hopes of the Valencia County Commission to have a provider under contract by the end of 2023, negotiations with Texas-based Community Hospital Corporation continue.
Since August 2022, a four-person team has been negotiating with the Plano, Texas, not-for-profit company on a contract to develop an acute care hospital in the county. While that agreement is still being hammered out, the commissioners have moved forward with a two-phase procurement to get the hospital built.
In February 2023, the county released a request for proposal for the Phase I design-build of a hospital. The scope of the procurement outlined in the RFP calls for a 15-bed, 35,100-square-foot facility to be sited on property within Valencia County, which is anticipated to be at least 10 acres. To date, a location for the proposed hospital has not been announced and it is expected that CHC will select the site.
A total of five companies responded to the February RFP — Enterprise Builders, HB Construction, Bradbury Stamm and Jaynes Corporation, all based in Albuquerque, and Brycon in Rio Rancho. Those five were narrowed down to a short list of three — Enterprise, HB and Bradbury — which have now been offered the chance to respond to the second phase of the RFP, which was issued on Monday, Dec. 18, 2023. Responses are due by Thursday, March 7.
County attorney Dave Pato said the county anticipates awarding a contract for construction around May 2024, barring unforeseen delays.
“The planning, designing, constructing, equipping and operating of a hospital is a monumental task,” Pato said via email, “and requires the collaborative efforts of many.”
The February RFP is using what’s called a best value selection to find a team to handle the design and construction for the hospital project. It’s a two-step procurement approach that generates a short list of offerors from the Phase I RFP. In Phase II, technical performance criteria and other project requirements were given to the short-listed companies with the end result being the selection of the team that provides the “best value,” a combination of qualitative factors and price.
As per the phase II documents, the maximum allowable constructions cost — excluding state gross receipts taxes — is $36 million. The goal is to have all phases of the entire project “substantially complete” by March 30, 2026, according to the RFP issued to the three short-listed companies.
During the third special legislative session of 2021, the New Mexico Legislature — with the approval of Gov. Michelle Lujan Grisham — appropriated $50 million to the New Mexico Department of Finance and Administration for an acute care hospital in a county with a population of less than 100,000.
On March 4, 2022, the county commission and DFA signed an agreement for the $50 million to plan, design, construct, equip and furnish an acute care hospital in Valencia County. Funding for the project is through the Coronavirus Local Fiscal Recovery Fund, and is part of the more than $1.7 billion awarded to the state in June 2021.
One challenge identified in the last year was the requirement the funding appropriated by the Legislature be spent by the end of 2025. During the 2023 legislative session, the county was able to convince the Legislature to extend the deadline to 2026, as well as allow for 5 percent of the $50 million to be used for pre-opening expenses.
Shortly after the agreement with DFA was signed, the county issued an RFP for an acute hospital and CHC submitted its proposal to the county in August 2022. Negotiations of the terms of a healthcare facilities contract between the county and the company have been ongoing since then.
“The county anticipates many exciting hospital developments in 2024, including groundbreaking, the commencement of construction and the finalization of the healthcare facilities contract,” Pato wrote in a recent email.
The contents of CHC’s proposal aren’t subject to disclosure during contract negotiations, the attorney said, but work on the project has continued.
“The county has continued to negotiate the terms of the health care facilities contract with a potential provider. I am unable to provide further insight at this time regarding the basis for the protracted negotiations of the health care facilities contract due to statutory constraints,” he continued. “The health care facilities contract, once negotiated and executed, is the tool by which the county will transfer the mill levy proceeds to the hospital. Pursuant to the (state) Hospital Funding Act, the mill levy funds will not be transferred for operations and maintenance of the hospital until we have a hospital in Valencia County.
“As reflected by the issuance of the Phase II of the design-build for the construction of the hospital (on Dec. 18), the continued negotiation of the health care facilities contract will not impede progress on the construction of the hospital. These processes will proceed simultaneously.”
Funds for the operation and maintenance of a hospital facility were collected from county taxpayers in the form of a property tax from 2007 to 2014. So far, it has amassed about $27 million and is being kept in an interest-bearing account at Bank of the West.
Julia M. Dendinger began working at the VCNB in 2006. She covers Valencia County government, Belen Consolidated Schools and the village of Bosque Farms. She is a member of the Society of Professional Journalists Rio Grande chapter’s board of directors.