Hensel Phelps Construction Co. awarded $97.3M for Army construction in Texas, utilizing full and open competition

Contract Overview

Contract Amount: $97,263,232 ($97.3M)

Contractor: Hensel Phelps Construction CO.

Awarding Agency: Department of Defense

Start Date: 2008-09-28

End Date: 2011-02-03

Contract Duration: 858 days

Daily Burn Rate: $113.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: CONSTRUCTION

Place of Performance

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

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $97.3 million to HENSEL PHELPS CONSTRUCTION CO. for work described as: CONSTRUCTION Key points: 1. Contract value represents a significant investment in military infrastructure. 2. Full and open competition suggests a robust bidding process. 3. Fixed-price contract type aims to control costs for the government. 4. Project duration of 858 days indicates a substantial construction undertaking. 5. Awarded by the Department of the Army, aligning with defense sector priorities. 6. Geographic focus on Texas highlights regional development within the defense budget.

Value Assessment

Rating: good

The contract value of $97.3 million for commercial and institutional building construction appears reasonable given the scope and duration. Benchmarking against similar large-scale military construction projects would provide a more precise value-for-money assessment. The firm fixed-price structure suggests that cost overruns are primarily the contractor's responsibility, which is a positive indicator for cost control. However, without specific details on the project's complexity and the prevailing market rates for construction in Texas during the award period, a definitive value assessment is challenging.

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. This approach typically fosters a competitive environment, potentially leading to better pricing and quality. The presence of 4 bids suggests a healthy level of interest from qualified contractors. A competitive bidding process is generally favorable for the government as it allows for a wider range of proposals and price points to be evaluated.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it increases the likelihood of securing the best possible price and value for the services rendered, minimizing the risk of inflated costs due to limited options.

Public Impact

The primary beneficiaries are the Department of the Army and its personnel, who will utilize the constructed facilities. The contract delivers essential commercial and institutional building construction services. The geographic impact is concentrated in Texas, supporting regional economic activity and potentially local employment. The project likely involved a significant construction workforce, including skilled trades and laborers, contributing to employment in the area.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions or material price escalations occur, despite the fixed-price nature.
Risk of schedule delays due to weather, labor availability, or supply chain disruptions common in large construction projects.
Ensuring compliance with all environmental and safety regulations throughout the construction lifecycle.
Adequate oversight is crucial to ensure the quality of construction meets military standards and specifications.

Positive Signals

The firm fixed-price contract type provides strong cost certainty for the government.
Full and open competition with multiple bidders suggests a competitive pricing environment.
The contractor, Hensel Phelps Construction Co., is a well-established entity in the construction industry.
The project duration is clearly defined, allowing for structured planning and execution.
Awarded by the Department of the Army, indicating alignment with critical defense infrastructure needs.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a vital part of the broader construction industry. This sector encompasses the building of non-residential structures such as government facilities, offices, and educational institutions. The market size for federal construction projects is substantial, driven by the need to maintain and upgrade existing infrastructure and build new facilities. This specific contract likely represents a significant portion of spending for a particular type of military facility within Texas, contributing to the overall defense construction landscape.

Small Business Impact

The contract was awarded under full and open competition and did not include a small business set-aside (false). There is no explicit information provided regarding subcontracting plans for small businesses. Without specific subcontracting goals or reporting, the direct impact on the small business ecosystem is unclear. However, large prime contractors like Hensel Phelps often engage small businesses for specialized services or labor, which could provide opportunities. Further investigation into subcontracting reports would be necessary to fully assess the impact on small businesses.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and their representatives within the Department of the Army. Accountability measures are embedded in the firm fixed-price contract terms, requiring the contractor to deliver the specified construction within the agreed-upon price and timeline. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction may apply if allegations of fraud, waste, or abuse arise during the contract performance or closeout.

Related Government Programs

Military Construction, Army
Facilities Sustainment, Restoration, and Modernization
Department of Defense Construction Projects
General Building Construction

Risk Flags

Potential for cost escalation if market prices for materials increase significantly.
Risk of schedule delays due to factors beyond contractor control (e.g., weather, supply chain).
Ensuring adherence to stringent military construction standards and specifications.
Adequacy of government oversight to ensure quality and compliance.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $97.3 million to HENSEL PHELPS CONSTRUCTION CO.. CONSTRUCTION

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 $97.3 million.

What is the period of performance?

Start: 2008-09-28. End: 2011-02-03.

What is the track record of Hensel Phelps Construction Co. on similar federal construction contracts?

Hensel Phelps Construction Co. has a substantial track record with federal agencies, including the Department of Defense. They have been awarded numerous contracts for large-scale construction projects, often involving complex infrastructure and facilities. Analyzing their past performance on similar firm fixed-price contracts, particularly those with durations exceeding 800 days and values in the tens of millions, would reveal their ability to manage costs, adhere to schedules, and meet quality standards. Historical data from contract databases often includes performance ratings and any disputes or claims filed, providing insights into their reliability and effectiveness as a federal contractor. Their consistent engagement in major federal projects suggests a generally positive performance history, though specific project outcomes can vary.

How does the awarded amount compare to the estimated cost or market value for similar construction projects?

The awarded amount of $97.3 million for commercial and institutional building construction by Hensel Phelps Construction Co. needs to be benchmarked against similar projects to assess value for money. Factors such as project complexity, specific building type (e.g., barracks, administrative, training facilities), location-specific labor and material costs, and the prevailing economic conditions at the time of award significantly influence market value. Comparing this contract's unit costs (e.g., cost per square foot, cost per bed for barracks) to other Department of the Army or Department of Defense construction contracts of similar scope and in comparable geographic regions would provide a clearer picture. Without such comparative data, it is difficult to definitively state whether the price was advantageous for the government.

What are the primary risks associated with a large-scale construction contract of this duration?

Large-scale construction contracts, especially those with durations of 858 days (over two years), carry inherent risks. For this contract, potential risks include unforeseen site conditions (e.g., soil issues, hazardous materials) that could lead to change orders and cost increases, despite the firm fixed-price structure. Material price escalation, particularly for key commodities like steel or concrete, can impact profitability if not adequately managed or hedged. Labor availability and potential disputes, as well as weather-related delays, are also significant risks in construction. Furthermore, ensuring consistent quality control and adherence to stringent military specifications throughout the extended project timeline requires robust management and oversight from both the contractor and the government.

How effective is the firm fixed-price contract type in controlling costs for this type of project?

The firm fixed-price (FFP) contract type is generally considered effective in controlling costs for projects where the scope of work is well-defined and risks can be reasonably anticipated, such as commercial and institutional building construction. Under an FFP contract, the contractor assumes the primary risk of cost overruns. This incentivizes the contractor to manage their costs efficiently and complete the project within the agreed-upon price. For the government, this provides a high degree of cost certainty. However, if unforeseen circumstances arise that significantly alter the scope or require substantial changes, the FFP structure can lead to contentious negotiations for modifications, potentially negating some of the initial cost control benefits if not managed carefully.

What is the historical spending pattern for similar construction services by the Department of the Army in Texas?

The Department of the Army consistently invests in construction projects across various installations in Texas due to the significant military presence in the state. Historical spending patterns reveal a continuous need for new construction, renovation, and maintenance of facilities supporting troop housing, training, operations, and logistics. Analyzing past contract awards for similar building types (commercial, institutional) and contract values within Texas would show trends in spending levels, typical contract durations, and the prevalence of different competition levels. This specific $97.3 million award fits within the broader pattern of substantial capital investments the Army makes to maintain and modernize its infrastructure in key states like Texas.

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: W9126G06R0002

Offers Received: 4

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, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $97,318,232

Exercised Options: $97,263,232

Current Obligation: $97,263,232

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W9126G06D0039

IDV Type: IDC

Timeline