Hensel Phelps Construction Co. awarded $56.15M contract for Army facility construction in Texas

Contract Overview

Contract Amount: $56,150,503 ($56.2M)

Contractor: Hensel Phelps Construction CO.

Awarding Agency: Department of Defense

Start Date: 2006-09-15

End Date: 2008-08-01

Contract Duration: 686 days

Daily Burn Rate: $81.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 12

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: COMPANY OPERATIONS FACILITY

Place of Performance

Location: EL PASO, EL PASO County, TEXAS, 79906

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $56.2 million to HENSEL PHELPS CONSTRUCTION CO. for work described as: COMPANY OPERATIONS FACILITY Key points: 1. Contract value represents a significant investment in military infrastructure. 2. Full and open competition suggests a potentially competitive bidding process. 3. Fixed-price contract type may offer cost certainty but limits flexibility. 4. Contract duration of 686 days indicates a substantial construction project. 5. Project located in Texas, potentially impacting local construction workforce and economy. 6. No small business set-aside noted, suggesting larger firms were primary targets.

Value Assessment

Rating: fair

The contract value of $56.15 million for a commercial and institutional building construction project appears within a reasonable range for a large-scale federal facility. Benchmarking against similar Department of Defense construction projects of comparable size and complexity would be necessary for a definitive value-for-money assessment. The firm fixed-price structure suggests the contractor assumed a significant portion of the cost risk, which can be a positive indicator if the final price reflects efficient execution.

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 bids. With 12 bids received, the competition level appears robust, suggesting that multiple construction firms vied for the project. This level of competition is generally favorable for price discovery and can lead to more competitive pricing for the government.

Taxpayer Impact: A competitive bidding process for this contract likely resulted in a more favorable price for taxpayers compared to a sole-source or limited competition award.

Public Impact

The primary beneficiaries are the Department of the Army, receiving a new or upgraded facility. The contract delivers construction services for a commercial and institutional building. The geographic impact is concentrated in Texas, potentially stimulating local economic activity. The project implies significant employment opportunities for construction workers and related trades in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions or material price escalations occur, despite fixed-price terms.
Contract duration could be subject to delays due to weather, supply chain issues, or labor availability.
Scope creep could become an issue if project requirements are not clearly defined and managed.
Ensuring compliance with all federal building codes and environmental regulations will be critical.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Full and open competition suggests a competitive market for the construction services.
Award to a known entity (Hensel Phelps) may indicate a level of confidence in their capabilities.
Project completion will enhance the Department of the Army's operational capabilities in the region.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a significant segment of the broader construction industry. Federal spending in this area often supports military readiness, government operations, and public infrastructure. The market for large-scale federal construction is typically dominated by established firms with proven track records and bonding capacity, such as Hensel Phelps. Comparable spending benchmarks would involve analyzing other large military facility construction projects awarded by the Department of Defense or other federal agencies.

Small Business Impact

The contract was not awarded as a small business set-aside, and the data indicates the prime contractor is not a small business. This suggests that the primary focus was on securing bids from larger, established construction firms capable of undertaking a project of this magnitude. There may be opportunities for small businesses to participate as subcontractors to Hensel Phelps, but this contract does not directly allocate funds to the small business sector.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant project management office within the Department of the Army. Accountability measures would include adherence to the contract terms, performance milestones, and quality standards. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply if any allegations of fraud, waste, or abuse arise.

Related Government Programs

Military Construction Projects
Department of Defense Facilities
Federal Building Construction
Army Corps of Engineers Projects

Risk Flags

Contract Duration
Firm Fixed Price Risk
Potential for Scope Creep
Subcontracting Opportunities

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $56.2 million to HENSEL PHELPS CONSTRUCTION CO.. COMPANY OPERATIONS FACILITY

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 $56.2 million.

What is the period of performance?

Start: 2006-09-15. End: 2008-08-01.

What is Hensel Phelps Construction Co.'s track record with the Department of Defense?

Hensel Phelps Construction Co. has a substantial history of contracting with the Department of Defense and other federal agencies. Their portfolio includes numerous large-scale construction projects, ranging from barracks and training facilities to administrative buildings and airfields. Analyzing their past performance on similar projects, including any reported issues, cost variances, or schedule delays, would provide further insight into their reliability and capability for this specific contract. Their extensive experience suggests a strong understanding of federal procurement regulations and construction standards.

How does the $56.15 million award compare to similar Army facility construction contracts?

The $56.15 million award for this Army facility construction project needs to be benchmarked against similar projects to assess its value. Factors such as project scope (e.g., square footage, complexity of systems), location, and specific facility type (e.g., barracks, command center, maintenance facility) are crucial for comparison. Generally, large-scale military construction projects can range from tens of millions to hundreds of millions of dollars. Without specific details on the facility's purpose and size, a precise comparison is difficult, but the awarded amount appears consistent with significant infrastructure investments by the Army.

What are the primary risks associated with this firm fixed-price contract?

The primary risks associated with a firm fixed-price (FFP) contract, while generally favorable for cost control, lie in potential unforeseen circumstances. For Hensel Phelps, risks include underestimating material or labor costs, encountering unexpected site conditions (e.g., soil issues, hazardous materials), or facing significant supply chain disruptions that drive up prices. If these risks materialize and are not adequately managed, the contractor could face reduced profit margins or even losses. For the government, the risk is that the contractor may cut corners on quality to maintain profitability if not rigorously overseen.

How effective is full and open competition in ensuring competitive pricing for construction?

Full and open competition is widely considered the most effective method for ensuring competitive pricing in federal contracting, including for construction. By allowing all responsible sources to bid, it maximizes the pool of potential offerors, thereby increasing the likelihood of receiving multiple competitive bids. This competitive pressure incentivizes contractors to submit their most favorable pricing and efficient proposals to win the contract. The presence of 12 bids in this case strongly suggests that the market was sufficiently competitive, leading to a price that likely reflects market rates.

What is the historical spending trend for commercial and institutional building construction by the Department of the Army?

Historical spending by the Department of the Army on commercial and institutional building construction has been substantial, driven by the need to maintain and modernize its vast infrastructure globally. Annual spending can fluctuate based on military readiness requirements, base realignment and closure initiatives, and specific modernization programs. Analyzing past fiscal years would reveal trends in contract awards, average contract values, and the types of facilities most frequently constructed. This specific $56.15 million award fits within the broader pattern of significant, ongoing investment in Army facilities.

What are the implications of the 686-day contract duration for project management and oversight?

A contract duration of 686 days (approximately 23 months) for a project of this scale necessitates robust project management and sustained oversight. It implies a complex construction undertaking requiring detailed scheduling, resource allocation, and coordination among various trades and suppliers. For the government, it means maintaining consistent oversight throughout the project lifecycle to monitor progress, ensure quality control, manage any change orders effectively, and verify compliance with contract terms. Extended durations also increase the potential exposure to market fluctuations in material costs and labor availability.

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: TWO STEP

Solicitation ID: W912PP06R0001

Offers Received: 12

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: $59,707,843

Exercised Options: $59,707,843

Current Obligation: $56,150,503

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W912PP06D0020

IDV Type: IDC

Timeline