Hensel Phelps Construction Co. awarded $56.5M for Army hangar design-build in Texas
Contract Overview
Contract Amount: $56,516,949 ($56.5M)
Contractor: Hensel Phelps Construction CO.
Awarding Agency: Department of Defense
Start Date: 2007-09-05
End Date: 2010-12-30
Contract Duration: 1,212 days
Daily Burn Rate: $46.6K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 6
Pricing Type: FIRM FIXED PRICE
Sector: Construction
Official Description: GSAB AND ASB HANGAR, DESIGN-BUILD
Place of Performance
Location: EL PASO, EL PASO County, TEXAS, 79906
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $56.5 million to HENSEL PHELPS CONSTRUCTION CO. for work described as: GSAB AND ASB HANGAR, DESIGN-BUILD Key points: 1. The contract was awarded using full and open competition, suggesting a competitive bidding process. 2. The firm-fixed-price contract type indicates that the contractor bears the risk of cost overruns. 3. The project duration of 1212 days (approximately 3.3 years) suggests a significant construction undertaking. 4. The North American Industry Classification System (NAICS) code 236220 points to commercial and institutional building construction. 5. The award was made by the Department of the Army, a component of the Department of Defense. 6. The contract was awarded in Texas, indicating a specific geographic focus for the project.
Value Assessment
Rating: fair
Benchmarking the value of this specific contract is challenging without more detailed cost breakdowns or comparable project data. However, the award amount of $56.5 million for a design-build hangar project of this scale and duration appears within a reasonable range for large-scale construction. The firm-fixed-price nature of the contract shifts cost risk to the contractor, which can sometimes lead to higher initial bids but provides budget certainty for the government.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, meaning that all responsible sources were permitted to submit a bid. The presence of 6 bidders (no) indicates a healthy level of competition for this project. A competitive process like this generally leads to better price discovery and potentially lower costs for the government compared to sole-source or limited competition awards.
Taxpayer Impact: The full and open competition for this significant construction project likely resulted in a more favorable price for taxpayers by leveraging market competition to drive down costs.
Public Impact
The primary beneficiaries are the U.S. Army, which will receive a new hangar facility. The project delivers design and construction services for a critical military infrastructure asset. The geographic impact is concentrated in Texas, where the hangar will be located. The construction workforce in Texas will likely see employment opportunities as a result of this contract.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns if unforeseen site conditions or design complexities arise, despite the firm-fixed-price structure.
- Dependence on the contractor's ability to manage complex design and construction processes effectively.
- Risk associated with the long project duration, which could be subject to market fluctuations or changes in military requirements.
Positive Signals
- Firm-fixed-price contract provides budget certainty for the government.
- Full and open competition suggests a robust bidding process and potential for competitive pricing.
- Award to a single, established contractor (Hensel Phelps Construction Co.) may indicate confidence in their capability for large-scale projects.
Sector Analysis
This contract falls within the Commercial and Institutional Building Construction sector, a significant part of the broader construction industry. The market for large-scale military infrastructure projects is often characterized by a limited number of large, experienced contractors capable of handling complex design-build requirements. Spending in this sector is influenced by government infrastructure needs, defense spending priorities, and economic conditions.
Small Business Impact
The data indicates that this contract was not set aside for small businesses (sb: false) and there is no explicit mention of subcontracting goals for small businesses. Therefore, the direct impact on the small business ecosystem from this specific award is likely minimal, though the prime contractor may engage small businesses as subcontractors.
Oversight & Accountability
Oversight for this contract would typically be managed by the Department of the Army's contracting and project management offices. Accountability measures are inherent in the firm-fixed-price contract, which penalizes the contractor for cost overruns. Transparency is generally maintained through contract award databases and reporting requirements, though specific project oversight details are not provided.
Related Government Programs
- Military Construction
- Aircraft Maintenance Facilities
- Design-Build Contracts
- Department of Defense Procurement
Risk Flags
- Long project duration may increase exposure to market volatility.
- Design-build complexity requires robust contractor management.
- Firm-fixed-price shifts cost overrun risk to contractor.
Tags
construction, department-of-defense, department-of-the-army, design-build, firm-fixed-price, full-and-open-competition, hangar, large-contract, texas, commercial-institutional-building-construction
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $56.5 million to HENSEL PHELPS CONSTRUCTION CO.. GSAB AND ASB HANGAR, DESIGN-BUILD
Who is the contractor on this award?
The obligated recipient is HENSEL PHELPS CONSTRUCTION CO..
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Army).
What is the total obligated amount?
The obligated amount is $56.5 million.
What is the period of performance?
Start: 2007-09-05. End: 2010-12-30.
What is the typical cost per square foot for similar military hangar construction projects in Texas?
Determining a precise per-square-foot cost benchmark for military hangars is complex due to variations in size, specialized equipment, structural requirements (e.g., for aircraft maintenance), and design complexities. However, general commercial and institutional building construction costs can range from $200 to $500+ per square foot, with specialized facilities like hangars potentially falling at the higher end or exceeding it. Without the square footage of the GSAB AND ASB Hangar, a direct comparison to the $56.5 million award is not feasible. Factors such as foundation requirements, specialized ventilation, lighting, and power systems for aircraft maintenance significantly influence the final cost per square foot.
How does the number of bidders (6) compare to the average number of bids for similar large-scale military construction contracts?
An average of 6 bidders for a large-scale military construction contract awarded under full and open competition is generally considered a healthy level of competition. While the exact average can fluctuate based on project type, location, and market conditions, receiving multiple bids ensures that the government has a range of options and pricing to evaluate. Fewer than 3 bidders might raise concerns about market competitiveness or potential barriers to entry, while significantly more bidders could indicate intense competition or a highly sought-after contract. Six bidders suggests that the opportunity was attractive and accessible to a reasonable number of qualified firms.
What are the potential risks associated with a firm-fixed-price contract for a design-build hangar project?
While firm-fixed-price (FFP) contracts offer budget certainty to the government, they carry inherent risks, particularly for complex design-build projects with long durations. The primary risk is that the contractor may underestimate costs during the bidding phase, leading to financial strain or potential quality compromises to maintain profitability. For design-build projects, unforeseen design challenges or site conditions discovered during construction can significantly increase the contractor's costs, potentially leading to disputes or claims if not managed carefully. The long duration (1212 days) also exposes the contractor to risks from material price escalation or labor shortages, which they must absorb under an FFP agreement.
What is Hensel Phelps Construction Co.'s track record with similar large-scale government design-build projects?
Hensel Phelps Construction Co. is a well-established and reputable general contractor with extensive experience in large-scale design-build projects, including significant work for government and military clients. Their portfolio often includes complex infrastructure, aviation facilities, and institutional buildings. While specific details on their past performance for identical hangar projects are not provided here, their general track record suggests a capacity to handle projects of this magnitude and complexity. Government contract databases and past performance reviews would offer more granular insights into their specific project execution, on-time delivery, and budget adherence for similar contracts.
How does the $56.5 million award compare to historical spending on similar Army aviation infrastructure projects?
Comparing this $56.5 million award to historical spending requires access to detailed historical contract data for Army aviation infrastructure projects, categorized by type (e.g., hangars, maintenance facilities) and scope. Without such a dataset, a direct comparison is difficult. However, large-scale military construction projects, especially those involving specialized facilities like aircraft hangars, typically represent significant investments. The amount awarded suggests a substantial project, likely encompassing design, site preparation, construction, and potentially specialized systems required for modern aviation support. Trends in defense spending and infrastructure modernization programs would influence the scale and frequency of such awards.
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: W9127S06R6014
Offers Received: 6
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Hensel Phelps Construction CO (UEI: 063322085)
Address: 8322 CROSS PARK DR, AUSTIN, TX, 90
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $56,516,949
Exercised Options: $56,516,949
Current Obligation: $56,516,949
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W9127S07D6003
IDV Type: IDC
Timeline
Start Date: 2007-09-05
Current End Date: 2010-12-30
Potential End Date: 2010-12-30 00:00:00
Last Modified: 2010-12-13
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