Hensel Phelps awarded $76.4M for Moffett Field USGS Lab Construction, a firm-fixed-price definitive contract

Contract Overview

Contract Amount: $76,383,318 ($76.4M)

Contractor: Hensel Phelps Construction CO.

Awarding Agency: Department of the Interior

Start Date: 2020-10-26

End Date: 2025-12-31

Contract Duration: 1,892 days

Daily Burn Rate: $40.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: CONSTRUCTION - USGS LABORATORY BUILDING AT MOFFETT FIELD, CA

Place of Performance

Location: SAN JOSE, SANTA CLARA County, CALIFORNIA, 95110

State: California Government Spending

Plain-Language Summary

Department of the Interior obligated $76.4 million to HENSEL PHELPS CONSTRUCTION CO. for work described as: CONSTRUCTION - USGS LABORATORY BUILDING AT MOFFETT FIELD, CA Key points: 1. The contract value of $76.4 million represents a significant investment in federal infrastructure. 2. Competition dynamics for this large-scale construction project are crucial for ensuring taxpayer value. 3. Performance risks are inherent in long-duration construction projects, requiring robust oversight. 4. This project positions the USGS to enhance its research capabilities at a key federal facility. 5. The firm-fixed-price structure aims to control costs, but requires careful scope management.

Value Assessment

Rating: good

The contract value of $76.4 million for a laboratory building at Moffett Field appears within a reasonable range for a project of this scale and complexity. Benchmarking against similar federal construction projects for scientific facilities would provide a more precise assessment of value for money. The firm-fixed-price contract type suggests an expectation of cost certainty, which is positive for budget predictability.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple qualified bidders had the opportunity to submit proposals. With six bidders, the level of competition appears healthy for a project of this magnitude. This broad competition is generally expected to drive down prices and encourage innovation, leading to better value for the government.

Taxpayer Impact: A competitive bidding process for this construction project helps ensure that taxpayer funds are used efficiently by selecting the most cost-effective and capable contractor.

Public Impact

The primary beneficiaries are the scientists and researchers of the U.S. Geological Survey (USGS), who will gain access to modern laboratory facilities. The project will deliver a new laboratory building, enhancing the USGS's capacity for scientific research and data collection. The geographic impact is concentrated at Moffett Field, California, a significant federal research campus. The construction phase will likely create numerous jobs in the local California workforce, supporting skilled trades and related industries.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions arise during construction.
Delays in project completion could impact USGS research timelines.
Ensuring compliance with environmental regulations during construction is critical.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Full and open competition suggests a strong pool of qualified bidders.
Experienced contractor (Hensel Phelps) has a track record in large-scale construction.

Sector Analysis

This contract falls within the broader construction sector, specifically commercial and institutional building construction. Federal spending on infrastructure, including research facilities, is a significant component of this sector. The market for large-scale federal construction is competitive, with established firms like Hensel Phelps often securing major awards. Benchmarking against similar laboratory construction projects for agencies like NASA or other scientific bodies would offer further context.

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, Hensel Phelps, is a large entity, there may be opportunities for small businesses to participate as subcontractors. The extent of small business subcontracting will be a key factor in assessing the broader economic impact on the small business ecosystem.

Oversight & Accountability

Oversight for this project will likely be managed by the U.S. Geological Survey and potentially the General Services Administration (GSA), depending on the specific arrangement. Accountability measures will be embedded in the contract terms, including performance milestones and quality control. Transparency is generally maintained through contract award databases and public reporting, though detailed project-specific oversight reports may not always be publicly accessible.

Related Government Programs

USGS Research Facilities
Federal Laboratory Construction
Moffett Field Infrastructure Projects
Department of the Interior Capital Investments

Risk Flags

Long project duration increases risk of cost escalation and schedule delays.
Potential for unforeseen site conditions impacting budget and timeline.
Complexity of laboratory construction requires specialized expertise and oversight.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Interior awarded $76.4 million to HENSEL PHELPS CONSTRUCTION CO.. CONSTRUCTION - USGS LABORATORY BUILDING AT MOFFETT FIELD, CA

Who is the contractor on this award?

The obligated recipient is HENSEL PHELPS CONSTRUCTION CO..

Which agency awarded this contract?

Awarding agency: Department of the Interior (U.S. Geological Survey).

What is the total obligated amount?

The obligated amount is $76.4 million.

What is the period of performance?

Start: 2020-10-26. End: 2025-12-31.

What is Hensel Phelps Construction Co.'s track record with similar federal laboratory construction projects?

Hensel Phelps Construction Co. has a substantial track record in constructing large-scale facilities, including those for government and research purposes. While specific data on 'federal laboratory construction' projects is not detailed here, their portfolio often includes complex buildings requiring adherence to stringent technical specifications and security protocols. A review of their past performance on projects of comparable size and complexity, particularly those involving scientific research infrastructure, would be necessary to fully assess their suitability and past success rates. Their experience with firm-fixed-price contracts on large projects suggests a capacity for managing budget and schedule risks, which are critical for taxpayer value.

How does the $76.4 million contract value compare to similar USGS laboratory construction projects?

Direct comparison of the $76.4 million contract value to similar USGS laboratory construction projects requires access to historical data on projects with comparable scope, size, and location. However, for a definitive contract awarded in 2020 for a laboratory building, this figure suggests a significant investment. Factors such as specialized equipment integration, advanced HVAC systems, and specific safety requirements for laboratories can drive up costs compared to standard commercial construction. Benchmarking against projects awarded around the same period for similar scientific facilities by agencies like NASA or the National Science Foundation would provide a more robust context for assessing value for money.

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

The primary risks associated with this firm-fixed-price construction contract, despite its cost control benefits, revolve around potential scope creep and unforeseen conditions. If the project scope expands beyond the initial agreement, change orders can increase the total cost, potentially negating the fixed-price advantage. Unforeseen site conditions (e.g., soil issues, hazardous materials) can also lead to significant cost increases and delays, requiring careful negotiation and contingency planning. Contractor performance risk, though mitigated by competition and selection of an experienced firm, remains; failure to meet quality standards or schedule milestones can impact the government's intended use of the facility and potentially lead to disputes or claims.

How effective is the 'full and open competition' strategy likely to be in ensuring cost-effectiveness for this project?

The 'full and open competition' strategy is generally considered highly effective in promoting cost-effectiveness for large federal construction projects like this one. By allowing all responsible sources to submit bids, it maximizes the number of potential offerors, thereby increasing the likelihood of receiving competitive pricing. The presence of six bidders suggests a robust market response. This level of competition incentivizes contractors to offer their best pricing and most efficient solutions to win the contract. Furthermore, it provides the agency with a broader range of technical approaches and price points to evaluate, increasing the probability of selecting the best value proposal for the taxpayer.

What are the historical spending patterns for construction projects by the U.S. Geological Survey?

Historical spending patterns for construction projects by the U.S. Geological Survey (USGS) would typically show a mix of facility upgrades, new construction for research centers, and specialized infrastructure development. Spending levels can fluctuate based on agency budget appropriations, infrastructure needs assessments, and specific research initiatives requiring new or improved facilities. Analyzing past USGS construction contracts would reveal trends in project types (e.g., laboratories, field stations, data centers), average contract values, and the typical procurement methods used. This context helps in understanding whether the $76.4 million award for the Moffett Field laboratory represents a typical investment or an outlier.

What are the implications of the 'definitive contract' award type for project management and flexibility?

A 'definitive contract' is a type of contract that is fixed in price and contains all the terms and clauses that bind the parties involved. For this construction project, it implies that the scope, price, and delivery terms are clearly defined upfront. This provides a high degree of certainty for both the government and the contractor regarding financial obligations and project deliverables. While offering cost predictability, definitive contracts can sometimes be less flexible in accommodating significant changes once awarded. Modifications typically require formal change order processes, which can be time-consuming and may involve renegotiation of price and schedule, potentially impacting the project's agility if unforeseen circumstances necessitate substantial alterations.

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: 140G0320R0001

Offers Received: 6

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Hensel Phelps Construction CO

Address: 226 AIRPORT PKWY STE 150, SAN JOSE, CA, 95110

Business Categories: Category Business, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $76,383,318

Exercised Options: $76,383,318

Current Obligation: $76,383,318

Actual Outlays: $76,383,318

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline