Hensel Phelps Construction Co. awarded $82.4M contract for AIT Barracks construction in Texas

Contract Overview

Contract Amount: $82,379,782 ($82.4M)

Contractor: Hensel Phelps Construction CO

Awarding Agency: Department of Defense

Start Date: 2009-08-13

End Date: 2011-12-08

Contract Duration: 847 days

Daily Burn Rate: $97.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: SITE ADAPT AND CONSTRUCT AIT BARRACKS

Place of Performance

Location: SAN ANTONIO, BEXAR County, TEXAS, 78234

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $82.4 million to HENSEL PHELPS CONSTRUCTION CO for work described as: SITE ADAPT AND CONSTRUCT AIT BARRACKS Key points: 1. Contract value appears reasonable for a large-scale construction project of this nature. 2. Full and open competition suggests a competitive bidding process, potentially leading to better pricing. 3. Project duration of 847 days indicates a significant undertaking requiring robust project management. 4. Fixed-price contract type shifts risk to the contractor, potentially stabilizing costs. 5. The contract falls within the Commercial and Institutional Building Construction sector, a common area for federal spending.

Value Assessment

Rating: good

The contract value of $82.4 million for constructing AIT barracks is substantial. Benchmarking against similar large-scale military construction projects, this figure appears to be within a reasonable range, assuming the scope includes significant infrastructure and facility development. The firm fixed-price nature of the contract suggests that the initial bid was expected to cover all costs, providing cost certainty for the government. Without specific details on the barracks' size, amenities, and complexity, a precise value-for-money assessment is challenging, but the award to a known large contractor through open competition implies a degree of market validation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of four bidders, as suggested by the 'no' field, points to a healthy level of competition for this significant construction project. A competitive environment generally encourages contractors to offer their best pricing and terms to secure the award, which is beneficial for the government.

Taxpayer Impact: The full and open competition process likely resulted in a more favorable price for taxpayers compared to a sole-source or limited competition award. Multiple bids help ensure that the awarded price reflects market conditions and contractor efficiency.

Public Impact

The primary beneficiaries are the U.S. Army, receiving new or improved barracks facilities for its Advanced Individual Training (AIT) personnel. The services delivered include the construction of institutional buildings, likely encompassing living quarters, administrative spaces, and potentially training facilities. The geographic impact is concentrated in Texas (ST: TX), specifically at the installation where the AIT program is located. Workforce implications include job creation for construction workers, engineers, project managers, and support staff employed by Hensel Phelps Construction Co. and its subcontractors.

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.
Delays in construction could impact training schedules and soldier readiness.
Ensuring compliance with environmental regulations and construction standards throughout the project lifecycle.

Positive Signals

Award to a large, experienced construction firm like Hensel Phelps suggests a higher likelihood of successful project completion.
The firm fixed-price contract provides cost predictability for the government.
Full and open competition indicates a robust bidding process, potentially leading to better value.

Sector Analysis

This contract falls under the Commercial and Institutional Building Construction sector, a significant segment of the federal contracting market. This sector encompasses the building of facilities for various purposes, including military installations, government offices, and educational institutions. Federal spending in this area is often driven by infrastructure modernization, expansion, and replacement needs. Comparable spending benchmarks would involve analyzing other large military construction projects awarded by the Department of Defense or other agencies for similar types of facilities.

Small Business Impact

The contract was awarded under full and open competition and does not indicate a specific small business set-aside. While the prime contractor is a large firm, there may be opportunities for small businesses to participate as subcontractors. The extent of small business subcontracting would depend on Hensel Phelps's subcontracting plan and the availability of qualified small business vendors for specific trades or services required for the barracks construction.

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 are embedded in the contract terms, including performance standards, delivery schedules, and quality requirements. Transparency is facilitated through contract award databases and reporting requirements. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Military Construction (MILCON)
Barracks and Dormitory Construction
Department of Defense Facilities
Army Training Facilities

Risk Flags

Potential for cost overruns due to extended duration and market fluctuations.
Risk of construction delays impacting military training schedules.
Ensuring quality and adherence to specifications throughout a multi-year project.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $82.4 million to HENSEL PHELPS CONSTRUCTION CO. SITE ADAPT AND CONSTRUCT AIT BARRACKS

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 $82.4 million.

What is the period of performance?

Start: 2009-08-13. End: 2011-12-08.

What is the track record of Hensel Phelps Construction Co. with Department of Defense contracts, particularly for barracks construction?

Hensel Phelps Construction Co. is a well-established and large general contractor with extensive experience in federal construction projects, including those for the Department of Defense. They have a history of undertaking large-scale military construction, encompassing a wide range of facility types. While specific data on their past barracks construction projects is not detailed here, their general profile suggests they are capable of managing complex projects of this nature. A deeper analysis would involve reviewing their past performance ratings, any past disputes or claims on similar DoD contracts, and the scale and complexity of their previous barracks or troop housing projects to assess their specific suitability and historical success rate in this niche.

How does the awarded amount of $82.4 million compare to the estimated cost or budget for this AIT barracks project?

The provided data indicates the awarded amount is $82,379,782. Without access to the government's initial cost estimates or budget allocations for this specific project, it is difficult to definitively state how the award compares. However, the fact that it was awarded under full and open competition with four bidders suggests that the award price was likely competitive and potentially within or close to the government's expectations. If the award was significantly lower than estimates, it could indicate strong competition or contractor efficiency. Conversely, if it was higher, it might suggest underestimation or unforeseen project complexities. Further investigation into the pre-solicitation estimates would be needed for a precise comparison.

What are the primary risk indicators associated with this firm fixed-price construction contract?

The primary risk indicator for a firm fixed-price contract is the potential for the contractor to cut corners on quality or scope to maintain profitability if costs exceed initial estimates. For this specific project, risks include unforeseen site conditions (e.g., soil issues, hazardous materials), potential labor shortages or disputes, supply chain disruptions affecting material availability and cost, and weather-related delays, all of which could strain the contractor's ability to deliver within the fixed price. The government's risk is primarily related to ensuring the contractor meets all performance and quality specifications. Robust oversight and clear contract terms are crucial to mitigate these risks.

What is the historical spending pattern for AIT barracks construction by the Department of the Army?

Historical spending on AIT barracks construction by the Department of the Army is typically categorized under Military Construction (MILCON) appropriations. This spending fluctuates based on military readiness needs, troop levels, aging infrastructure, and modernization initiatives. The Army consistently invests significant funds in troop housing and training facilities. Analyzing past MILCON budgets and awarded contracts for barracks over several fiscal years would reveal trends in project volume, average contract values, and the types of construction prioritized. This specific $82.4 million contract represents a single, substantial investment within that broader historical context of ongoing facility development.

How does the duration of 847 days (approximately 2.3 years) impact the overall value and risk of this contract?

A contract duration of 847 days for a large construction project like barracks indicates a substantial undertaking. This extended timeline increases the potential exposure to market fluctuations (e.g., material costs, labor rates) for the contractor, which is mitigated by the firm fixed-price structure. For the government, a longer duration means a longer period before the facilities are operational, potentially impacting training capacity or soldier housing availability. It also implies a greater need for sustained project oversight and management. However, a longer duration can also allow for more thorough construction and quality control, potentially leading to a more durable and well-built facility if managed effectively.

What is the significance of the contract being awarded in August 2009, considering the economic climate at the time?

The contract award in August 2009 occurred during a period of economic recession. For large construction firms like Hensel Phelps, securing significant federal contracts could provide stability and a backlog of work when private sector construction might have been declining. For the government, awarding such contracts could serve as an economic stimulus by creating jobs and supporting related industries. The competitive bidding process likely ensured that taxpayer funds were used efficiently, even amidst economic uncertainty. The fixed-price nature would have been particularly important to lock in costs during a potentially volatile economic period.

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: W9126G07R0074

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 420 6TH AVE, GREELEY, CO, 08

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $88,748,782

Exercised Options: $82,379,782

Current Obligation: $82,379,782

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W9126G08D0016

IDV Type: IDC

Timeline