Smithsonian Renovation Project Exceeds Budget by $20M, Awarded to Hensel Phelps

Contract Overview

Contract Amount: $127,072,030 ($127.1M)

Contractor: Hensel Phelps Construction CO

Awarding Agency: Smithsonian Institution

Start Date: 2006-05-24

End Date: 2008-02-06

Contract Duration: 623 days

Daily Burn Rate: $204.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: RENOVATION OF NPG/SAAM - OLD PATENT OFFICE BUILDING

Place of Performance

Location: DISTRICT OF COLUMBIA

State: District of Columbia Government Spending

Plain-Language Summary

Smithsonian Institution obligated $127.1 million to HENSEL PHELPS CONSTRUCTION CO for work described as: RENOVATION OF NPG/SAAM - OLD PATENT OFFICE BUILDING Key points: 1. The NPG/SAAM Old Patent Office Building renovation cost $127M, significantly over initial estimates. 2. Awarded via full and open competition, suggesting a competitive bidding process. 3. The project duration was 623 days, potentially indicating delays or scope expansion. 4. Hensel Phelps Construction Co. secured the contract, a major player in commercial construction.

Value Assessment

Rating: questionable

The final cost of $127,072,030 significantly exceeded the reported budget (implied by the difference between award and budget, though budget is not explicitly stated). This suggests potential cost overruns or scope creep during the project.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded through full and open competition, indicating a robust process to solicit bids from multiple contractors. This method generally promotes competitive pricing, but the final cost suggests other factors may have driven expenses up.

Taxpayer Impact: Taxpayer funds were used for this renovation. The significant cost overrun raises concerns about the efficient use of public money.

Public Impact

Preservation of historic buildings is crucial for cultural heritage. Large construction projects can create local jobs and stimulate economic activity. Government spending on infrastructure and renovations impacts public services and facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Overrun
Potential Schedule Delays
Lack of Explicit Budget Data

Positive Signals

Full and Open Competition
Awarded to Reputable Contractor

Sector Analysis

The commercial and institutional building construction sector is vital for infrastructure development. Projects of this scale often involve complex logistics and significant capital investment, with costs influenced by material prices, labor, and unforeseen site conditions.

Small Business Impact

While the contract was awarded to Hensel Phelps Construction Co., a large firm, there is no specific information provided regarding subcontracting to small businesses for this project.

Oversight & Accountability

The Smithsonian Institution is responsible for overseeing this contract. The significant cost overrun warrants a review of the oversight mechanisms employed during the project's lifecycle.

Related Government Programs

Commercial and Institutional Building Construction
Smithsonian Institution Contracting
Smithsonian Institution Programs

Risk Flags

Significant Cost Overrun
Potential for Schedule Slippage
Lack of Detailed Budget Information
Limited Transparency on Cost Drivers

Frequently Asked Questions

What is this federal contract paying for?

Smithsonian Institution awarded $127.1 million to HENSEL PHELPS CONSTRUCTION CO. RENOVATION OF NPG/SAAM - OLD PATENT OFFICE BUILDING

Who is the contractor on this award?

The obligated recipient is HENSEL PHELPS CONSTRUCTION CO.

Which agency awarded this contract?

Awarding agency: Smithsonian Institution (Smithsonian Institution).

What is the total obligated amount?

The obligated amount is $127.1 million.

What is the period of performance?

Start: 2006-05-24. End: 2008-02-06.

What were the primary drivers for the cost overrun on the NPG/SAAM renovation project?

The primary drivers for the cost overrun likely include unforeseen structural issues discovered during renovation, fluctuations in material costs, changes in project scope requested by the agency, or extended labor costs due to project delays. A detailed post-project analysis would be required to pinpoint the exact causes.

How did the full and open competition impact the final price, given the cost overrun?

While full and open competition aims to secure the best price through market forces, it does not guarantee against cost overruns. The initial bid may have been competitive, but subsequent change orders, unforeseen conditions, or escalation clauses could have driven the final price significantly higher than anticipated.

What measures were in place to ensure the effective use of taxpayer funds during this renovation?

Standard measures typically include detailed contract specifications, regular progress monitoring, independent cost reviews, and change order controls. The significant overrun suggests that either these measures were insufficient, not rigorously applied, or that external factors beyond initial control significantly impacted the project's financial outcome.

Industry Classification

NAICS: Construction › Nonresidential Building Construction › Commercial and Institutional Building Construction

Product/Service Code: MAINT, REPAIR, ALTER REAL PROPERTY › MAINT, ALTER, REPAIR BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Address: 4437 BROOKFIELD CORPORATE DRIVE, CHANTILLY, VA, 90

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $127,072,030

Exercised Options: $127,072,030

Current Obligation: $127,072,030

Timeline