GSA awards $139M construction contract for State Dept. training center, highlighting firm fixed-price terms

Contract Overview

Contract Amount: $139,241,286 ($139.2M)

Contractor: Hensel Phelps Construction CO

Awarding Agency: General Services Administration

Start Date: 2017-08-25

End Date: 2019-12-04

Contract Duration: 831 days

Daily Burn Rate: $167.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: IGF::OT::IGF AWARD CONSTRUCTION CONTRACT 3 FOR THE DEPT. OF STATE, FOREIGN AFFAIRS SECURITY TRAINING CENTER IN BLACKSTONE, VA

Place of Performance

Location: BLACKSTONE, NOTTOWAY County, VIRGINIA, 23824

State: Virginia Government Spending

Plain-Language Summary

General Services Administration obligated $139.2 million to HENSEL PHELPS CONSTRUCTION CO for work described as: IGF::OT::IGF AWARD CONSTRUCTION CONTRACT 3 FOR THE DEPT. OF STATE, FOREIGN AFFAIRS SECURITY TRAINING CENTER IN BLACKSTONE, VA Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The firm fixed-price contract type aims to control costs and provide predictability. 3. The contract duration of 831 days indicates a significant construction project timeline. 4. Hensel Phelps Construction Co. secured this large-scale award. 5. The project is located in Blackstone, Virginia, impacting the local economy. 6. This award falls under the Commercial and Institutional Building Construction NAICS code.

Value Assessment

Rating: good

The contract value of $139.2 million for a large-scale training facility appears within a reasonable range for major construction projects of this nature. Benchmarking against similar government construction contracts for specialized facilities would provide a more precise value-for-money assessment. The firm fixed-price structure suggests an effort to manage cost overruns, which is a positive indicator for budget adherence.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit bids. The presence of two bids suggests a moderate level of competition for this significant project. A higher number of bidders typically leads to more competitive pricing, but the specific nature and scale of the training facility may have limited the pool of qualified contractors.

Taxpayer Impact: Full and open competition is generally beneficial for taxpayers as it encourages multiple firms to bid, driving down prices and ensuring the government receives the best value. The two-bidder scenario warrants further investigation to confirm if optimal price discovery was achieved.

Public Impact

The primary beneficiary is the Department of State, which will utilize the Foreign Affairs Security Training Center for its personnel. The contract will result in the construction of a significant training facility, enhancing security and operational capabilities. The geographic impact is concentrated in Blackstone, Virginia, potentially creating local jobs and economic activity during construction. The project will likely involve a substantial construction workforce, including skilled trades and project management personnel.

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.
Dependence on a single prime contractor (Hensel Phelps) for successful project completion.
Risk of schedule delays impacting the Department of State's operational readiness if construction is not completed on time.

Positive Signals

Firm fixed-price contract structure provides cost certainty for the government.
Award to an established construction company (Hensel Phelps) suggests a degree of reliability and experience.
Full and open competition, even with two bidders, indicates an attempt to secure competitive pricing.
The project addresses a critical need for the Department of State's security training infrastructure.

Sector Analysis

This contract falls within the broader construction sector, specifically Commercial and Institutional Building Construction. The market for large-scale government facilities is specialized, often requiring contractors with extensive experience in security, compliance, and project management. Comparable spending benchmarks would involve analyzing other major federal construction projects for training, research, or administrative facilities, considering factors like size, complexity, and location.

Small Business Impact

The contract details indicate that small business participation was not a primary set-aside criterion (ss: false, sb: false). While the prime contractor, Hensel Phelps, is a large business, there may be opportunities for small businesses to participate as subcontractors. The extent of small business subcontracting will be crucial in determining the overall impact on the small business ecosystem for this project.

Oversight & Accountability

Oversight for this contract would typically be managed by the General Services Administration (GSA), specifically the Public Buildings Service, which is responsible for federal building construction and management. Accountability measures are embedded in the contract terms, including performance standards and payment schedules. Transparency is facilitated through contract award databases and reporting requirements. Inspector General jurisdiction would likely fall under the GSA's IG.

Related Government Programs

Department of State Facilities Construction
Federal Law Enforcement Training Centers
General Services Administration Public Buildings Service Projects
Department of Defense Construction Contracts

Risk Flags

Potential for schedule delays
Risk of cost overruns (despite FFP)
Limited competition (2 bidders)

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $139.2 million to HENSEL PHELPS CONSTRUCTION CO. IGF::OT::IGF AWARD CONSTRUCTION CONTRACT 3 FOR THE DEPT. OF STATE, FOREIGN AFFAIRS SECURITY TRAINING CENTER IN BLACKSTONE, VA

Who is the contractor on this award?

The obligated recipient is HENSEL PHELPS CONSTRUCTION CO.

Which agency awarded this contract?

Awarding agency: General Services Administration (Public Buildings Service).

What is the total obligated amount?

The obligated amount is $139.2 million.

What is the period of performance?

Start: 2017-08-25. End: 2019-12-04.

What is Hensel Phelps Construction Co.'s track record with similar large-scale federal construction projects, particularly training facilities?

Hensel Phelps Construction Co. has a significant history of undertaking large-scale federal construction projects. While specific details on their experience with security training facilities would require deeper research, their portfolio often includes complex institutional and government buildings. Analyzing past performance on similar projects, including adherence to schedule, budget, and quality standards, is crucial. Their established presence suggests they possess the necessary resources and expertise for such endeavors. Further investigation into their past performance ratings and any past performance issues on federal contracts would provide a more comprehensive understanding of their reliability for this specific project.

How does the $139.2 million award compare to the estimated cost or budget for the Foreign Affairs Security Training Center?

The provided data indicates an award amount of $139,241,286. Without access to the original cost estimates or approved budgets for the Foreign Affairs Security Training Center, it is difficult to definitively state how this award compares. However, the fact that it was awarded under full and open competition with two bids suggests that the award price was likely competitive and potentially within the government's budgetary expectations. If the award significantly exceeded initial estimates, it could indicate issues with the bidding process or unforeseen project complexities. Conversely, a competitive award below estimates would be a positive outcome for taxpayer value.

What are the primary risks associated with a firm fixed-price contract for a project of this magnitude and duration?

While firm fixed-price (FFP) contracts are designed to provide cost certainty, risks remain, especially for large, long-duration construction projects. For this $139.2 million contract spanning 831 days, potential risks include unforeseen site conditions (e.g., soil issues, hazardous materials) that could lead to significant change orders, even under FFP. Escalating material costs or labor shortages over the project's lifespan could also strain the contractor's margins, potentially impacting quality or schedule if not managed proactively. The contractor bears the primary risk of cost overruns, but the government risks potential delays or quality compromises if the contractor struggles financially or operationally due to unforeseen circumstances.

What is the expected effectiveness of the Foreign Affairs Security Training Center once completed, and how does this contract contribute to that?

The Foreign Affairs Security Training Center is critical for the Department of State to provide essential security and readiness training to its personnel, including diplomats and security staff. This $139.2 million construction contract directly contributes to the center's effectiveness by providing the physical infrastructure required for advanced training scenarios. The successful and timely completion of this facility, as facilitated by this contract, will enable the Department to enhance its operational capabilities, improve personnel safety, and meet evolving global security challenges. The quality of construction and the functionality of the facility will directly impact the quality and scope of training that can be delivered.

How has federal spending on similar large-scale construction projects for training facilities evolved over the past five years?

Analyzing federal spending trends on large-scale construction projects for training facilities over the past five years would require access to comprehensive federal procurement data. Generally, spending in this category can fluctuate based on national security priorities, agency modernization efforts, and infrastructure investment cycles. Factors such as geopolitical events, evolving training needs (e.g., cybersecurity, counter-terrorism), and budget appropriations significantly influence these trends. A detailed analysis would involve identifying comparable projects across agencies like the Department of Defense, Homeland Security, and State, and examining award values, contract types, and durations to identify patterns and shifts in investment.

What are the implications of awarding this contract to Hensel Phelps Construction Co. in terms of market concentration within federal construction?

Awarding a significant $139.2 million contract to a large, established firm like Hensel Phelps Construction Co. contributes to the existing market concentration within the federal construction sector. Large prime contractors often have the resources, past performance, and established relationships necessary to compete for and execute these complex projects. While this ensures project execution capability, it can also present challenges for smaller or newer firms seeking to enter the federal market. The government's strategy often involves balancing the need for experienced large contractors with efforts to promote competition and opportunities for small businesses, potentially through subcontracting requirements or specific set-aside programs for smaller projects.

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: GS-03-P-17-AZ-C-0002

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 4437 BROOKFIELD CORPORATE DR STE 207, CHANTILLY, VA, 20151

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $139,241,286

Exercised Options: $139,241,286

Current Obligation: $139,241,286

Actual Outlays: $7,331

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline