DOI's $28.5M Moffett Field renovation awarded to Hensel Phelps Construction Co. under full and open competition

Contract Overview

Contract Amount: $28,552,755 ($28.6M)

Contractor: Hensel Phelps Construction CO.

Awarding Agency: Department of the Interior

Start Date: 2022-09-20

End Date: 2025-08-31

Contract Duration: 1,076 days

Daily Burn Rate: $26.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: CONSTRUCTION - RENOVATION OF BUILDING 19 FIRST FLOOR AT MOFFETT FIELD, CA

Place of Performance

Location: MOFFETT FIELD, SANTA CLARA County, CALIFORNIA, 94035

State: California Government Spending

Plain-Language Summary

Department of the Interior obligated $28.6 million to HENSEL PHELPS CONSTRUCTION CO. for work described as: CONSTRUCTION - RENOVATION OF BUILDING 19 FIRST FLOOR AT MOFFETT FIELD, CA Key points: 1. The contract value appears reasonable for a large-scale building renovation project of this nature. 2. Full and open competition suggests a robust bidding process, potentially leading to competitive pricing. 3. The fixed-price contract type shifts performance risk to the contractor, encouraging efficient project completion. 4. The project's duration of over 1000 days indicates a significant scope of work. 5. The geographic location in California may influence labor and material costs. 6. The absence of small business set-asides warrants further examination of subcontracting opportunities.

Value Assessment

Rating: good

The contract value of $28.5 million for the renovation of Building 19's first floor at Moffett Field is substantial. Benchmarking against similar large-scale commercial and institutional building construction projects, this figure appears to be within a reasonable range, especially considering the firm-fixed-price nature which often includes contractor contingencies. Without specific details on the scope of renovation (e.g., structural, MEP, finishes), a precise value-for-money assessment is challenging, but the competitive award process provides some assurance of fair pricing.

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 a bid. The presence of two bidders (as suggested by 'no': 2) is a moderate level of competition. While more bidders could potentially drive prices lower, two bids in a large construction contract suggest that the market for such specialized work is not overly crowded, but that a competitive process did occur.

Taxpayer Impact: Full and open competition generally benefits taxpayers by encouraging multiple firms to bid, which can lead to more competitive pricing and better value. The fact that there were at least two bidders suggests that the government received multiple offers, increasing the likelihood of a fair market price being achieved.

Public Impact

The primary beneficiaries are the U.S. Geological Survey (USGS) and other potential occupants of Building 19 at Moffett Field, who will gain modernized facilities. The project will deliver significant renovations to the first floor of a federal building, likely improving functionality, safety, and energy efficiency. The geographic impact is localized to Moffett Field, California, but the construction activities will involve local and regional labor and material suppliers. Workforce implications include employment opportunities for construction workers, project managers, engineers, and related trades in the California region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen conditions arise during renovation, despite the firm-fixed-price contract.
Dependence on contractor performance for timely completion, with delays impacting agency operations.
Limited visibility into the specific breakdown of costs within the fixed-price structure.
The moderate number of bidders could indicate potential market concentration for large federal construction projects.
Lack of explicit small business participation targets may limit subcontracting opportunities for smaller firms.

Positive Signals

Firm-fixed-price contract structure incentivizes contractor efficiency and cost control.
Full and open competition suggests a thorough vetting of potential contractors and pricing.
The contractor, Hensel Phelps Construction Co., is a well-established firm with a significant track record in large-scale construction.
The project is located at a federal facility, implying a certain level of established infrastructure and oversight.
The long duration allows for detailed planning and execution, potentially reducing rushed work and errors.

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 focuses on maintaining, upgrading, or building facilities for various agencies. Comparable spending benchmarks would typically look at the cost per square foot for similar renovation projects in the Bay Area, factoring in the specific scope of work. The total contract value of $28.5 million places this project in the large-scale category for federal building renovations.

Small Business Impact

The contract data indicates that this was not awarded as a small business set-aside, and there is no explicit mention of small business subcontracting goals. This suggests that the primary contract was awarded to a large business. While Hensel Phelps Construction Co. may engage small businesses as subcontractors, the absence of a set-aside or specific subcontracting targets means that direct opportunities for small businesses through this specific contract award are not guaranteed and would depend on the prime contractor's procurement practices.

Oversight & Accountability

Oversight for this contract will primarily be managed by the U.S. Geological Survey (part of the Department of the Interior), the contracting agency. As a firm-fixed-price contract, oversight will focus on ensuring the contractor meets the defined scope, schedule, and quality standards. Accountability measures are built into the contract terms, including potential penalties for delays or non-performance. Transparency is generally maintained through contract award databases, though detailed cost breakdowns are typically proprietary. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Federal Building Renovations
Military Base Construction
Government Facility Modernization
Public Works Construction Projects
Department of the Interior Capital Improvements

Risk Flags

Potential for unforeseen conditions in renovation projects.
Risk of contractor delays impacting project schedule.
Moderate competition level (2 bidders) may limit price negotiation.
Lack of explicit small business subcontracting goals.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Interior awarded $28.6 million to HENSEL PHELPS CONSTRUCTION CO.. CONSTRUCTION - RENOVATION OF BUILDING 19 FIRST FLOOR 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 $28.6 million.

What is the period of performance?

Start: 2022-09-20. End: 2025-08-31.

What is Hensel Phelps Construction Co.'s track record with federal construction contracts, particularly renovations?

Hensel Phelps Construction Co. is a major player in the construction industry with extensive experience in federal projects. A review of federal procurement data reveals numerous contracts awarded to Hensel Phelps across various agencies, including military, civilian, and research facilities. Their portfolio often includes large-scale new construction and complex renovations. For instance, they have been involved in projects at military bases, airports, and other government installations. Their history suggests a capacity to handle projects of this magnitude and complexity, though specific performance metrics for past federal renovation contracts would require deeper analysis of contract close-out data and any associated modifications or disputes.

How does the $28.5 million cost compare to similar federal building renovations in California?

Benchmarking the $28.5 million cost requires detailed scope comparison, but for a significant renovation of a first floor in a federal building, it appears within a plausible range for large projects in high-cost areas like California. Factors influencing cost include the extent of structural work, MEP (mechanical, electrical, plumbing) upgrades, interior finishes, and specialized requirements (e.g., lab spaces, security). Projects of similar scale (e.g., tens of thousands of square feet) in major metropolitan areas can range from hundreds to thousands of dollars per square foot depending on complexity. Given the firm-fixed-price nature, the contractor has incorporated risk and profit, which is standard. A more precise comparison would necessitate square footage and detailed scope of work.

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

The primary risks for the government in a firm-fixed-price contract are related to potential contractor performance issues and unforeseen conditions. While the contractor assumes most cost risk, the government faces risks if the contractor fails to deliver on time, meets quality standards, or goes bankrupt. For renovations, unforeseen conditions (e.g., asbestos, structural issues, outdated utilities not initially identified) are a significant risk. Although the contract is fixed-price, substantial change orders may arise if these conditions are severe, potentially increasing the overall cost beyond the initial $28.5 million. Contractor default or significant delays are also risks that could impact the agency's operational needs.

How effective is full and open competition in ensuring value for money for large federal construction projects?

Full and open competition is generally considered the most effective method for ensuring value for money in federal procurement, especially for large construction projects. It maximizes the pool of potential bidders, fostering a competitive environment that encourages lower pricing and higher quality proposals. By allowing all responsible sources to compete, the government increases the likelihood of finding the best combination of price and technical merit. However, the effectiveness is contingent on the clarity of the solicitation requirements and the agency's ability to evaluate proposals rigorously. For complex projects, even with open competition, ensuring true price discovery requires sufficient bidder interest and a well-defined scope to prevent ambiguity that could lead to change orders.

What is the historical spending trend for building renovations by the Department of the Interior?

Historical spending data for building renovations by the Department of the Interior (DOI) would likely show consistent investment in maintaining and upgrading its vast portfolio of facilities across various bureaus like the National Park Service, Bureau of Land Management, and U.S. Geological Survey. Spending fluctuates based on agency needs, budget appropriations, and the condition of existing infrastructure. Major renovation projects, like the one at Moffett Field, represent significant capital investments. Analyzing trends would involve looking at annual obligations for construction and renovation categories, identifying peaks related to major facility upgrades or compliance requirements, and noting any shifts in funding priorities over time.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 140G0322R0003

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Hensel Phelps Construction CO

Address: 4750 WILLOW RD STE 100, PLEASANTON, CA, 94588

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

Financial Breakdown

Contract Ceiling: $28,552,755

Exercised Options: $28,552,755

Current Obligation: $28,552,755

Actual Outlays: $28,552,755

Subaward Activity

Number of Subawards: 25

Total Subaward Amount: $16,611,585

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline