GSA awards $122M modernization contract to Hensel Phelps Construction Co. for Baltimore's Altmeyer Building

Contract Overview

Contract Amount: $122,000,000 ($122.0M)

Contractor: Hensel Phelps Construction CO

Awarding Agency: General Services Administration

Start Date: 2018-03-26

End Date: 2021-03-25

Contract Duration: 1,095 days

Daily Burn Rate: $111.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 9

Pricing Type: FIXED PRICE INCENTIVE

Sector: Construction

Official Description: AWARD OF THE CMC SERVICES FOR THE ALTMEYER BUILDING MODERNIZATION IN BALTIMORE (WOODLAWN), MD

Place of Performance

Location: GWYNN OAK, BALTIMORE County, MARYLAND, 21207

State: Maryland Government Spending

Plain-Language Summary

General Services Administration obligated $122.0 million to HENSEL PHELPS CONSTRUCTION CO for work described as: AWARD OF THE CMC SERVICES FOR THE ALTMEYER BUILDING MODERNIZATION IN BALTIMORE (WOODLAWN), MD Key points: 1. The contract value of $122 million for the Altmeyer Building modernization represents a significant investment in federal infrastructure. 2. Competition dynamics for this project are assessed to understand the impact on pricing and value. 3. Risk indicators are evaluated based on contract type, duration, and contractor performance history. 4. Performance context is established by comparing this project to similar federal building modernization efforts. 5. The contract falls within the Commercial and Institutional Building Construction sector, a key area for federal real estate. 6. The fixed-price incentive contract type suggests a focus on cost control with performance-based incentives. 7. The project duration of 1095 days indicates a substantial, multi-year undertaking.

Value Assessment

Rating: good

The award of $122 million for the modernization of the Altmeyer Building appears to be within a reasonable range for a project of this scale and complexity. Benchmarking against similar large-scale federal building renovations suggests that the pricing is competitive, especially considering the scope of work which includes modernization and construction services. The fixed-price incentive contract structure aims to balance cost certainty with contractor performance, potentially yielding good value if performance targets are met. Further analysis would involve detailed cost breakdowns and comparison with private sector projects of equivalent scope.

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 contractors had the opportunity to bid. With 9 bidders participating, the level of competition was robust. This broad participation generally leads to more competitive pricing and a wider selection of qualified firms, suggesting that the government likely received a fair market price for the services. The presence of numerous bidders also implies a healthy market for this type of construction service.

Taxpayer Impact: A high level of competition benefits taxpayers by driving down costs and ensuring that the contract is awarded to the most capable and cost-effective bidder, maximizing the return on public investment.

Public Impact

The primary beneficiaries are federal employees and agencies operating within the Altmeyer Building, who will gain access to a modernized and functional workspace. The project delivers essential building modernization and construction services, ensuring the long-term viability and efficiency of a significant federal facility. The geographic impact is concentrated in Baltimore (Woodlawn), Maryland, contributing to local economic activity and employment. Workforce implications include job creation for construction workers, engineers, architects, and project managers involved in the modernization effort.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if incentive targets are not met or if unforeseen issues arise during modernization.
Contract duration of nearly three years could lead to schedule delays impacting agency operations.
Reliance on a single prime contractor, Hensel Phelps Construction Co., for all aspects of the modernization.
The fixed-price incentive structure requires careful monitoring to ensure contractor efficiency and cost control.

Positive Signals

Awarded under full and open competition with 9 bidders, indicating a competitive process.
The fixed-price incentive contract type aligns cost and performance objectives.
The contractor, Hensel Phelps Construction Co., is a reputable firm with experience in large-scale construction projects.
The project addresses critical modernization needs for a federal facility, ensuring its long-term utility.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, which is a substantial segment of the overall construction industry. Federal agencies, particularly the General Services Administration (GSA), are significant players in this market, responsible for managing and maintaining a vast portfolio of government buildings. Spending in this sector is driven by the need to upgrade aging infrastructure, improve energy efficiency, and adapt facilities to evolving operational requirements. Comparable spending benchmarks for large federal building modernizations can range from tens to hundreds of millions of dollars, depending on the size and scope of the project.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications specifically mandated for small business set-asides within this award. However, the prime contractor, Hensel Phelps Construction Co., may engage small businesses as subcontractors to fulfill portions of the work, contributing to the broader small business ecosystem. The absence of a set-aside means the primary competition was open to all qualified large businesses.

Oversight & Accountability

Oversight for this contract is primarily managed by the General Services Administration (GSA), specifically its Public Buildings Service. Mechanisms for oversight likely include regular progress reports, site inspections, and performance reviews. Accountability measures are embedded in the contract terms, particularly through the fixed-price incentive structure, which links payment to performance. Transparency is generally maintained through federal contract databases and public reporting, though detailed cost breakdowns may be proprietary. The Inspector General of the GSA would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

Federal Building Modernization Programs
GSA Public Buildings Service Contracts
Commercial and Institutional Building Construction
Infrastructure Investment and Jobs Act Projects
Government Real Property Management

Risk Flags

Potential for cost overruns due to unforeseen conditions in building modernization.
Schedule delays impacting agency operations.
Effectiveness of incentive clauses in driving performance and cost control.
Ensuring quality and safety standards are maintained throughout the multi-year project.

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $122.0 million to HENSEL PHELPS CONSTRUCTION CO. AWARD OF THE CMC SERVICES FOR THE ALTMEYER BUILDING MODERNIZATION IN BALTIMORE (WOODLAWN), MD

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 $122.0 million.

What is the period of performance?

Start: 2018-03-26. End: 2021-03-25.

What is the track record of Hensel Phelps Construction Co. on similar federal contracts?

Hensel Phelps Construction Co. has a significant track record with federal agencies, including the General Services Administration (GSA). They have been awarded numerous contracts for large-scale construction and renovation projects across various government facilities. Their experience typically includes complex projects involving new construction, major renovations, and upgrades to existing infrastructure. While specific performance metrics for past federal contracts are not detailed here, their consistent award of substantial projects suggests a generally positive performance history and capability to manage complex federal requirements. A deeper dive into their past performance evaluations and any past performance issues would provide a more comprehensive understanding of their reliability for this specific modernization project.

How does the $122 million award compare to other federal building modernization projects managed by GSA?

The $122 million award for the Altmeyer Building modernization is a substantial but not unprecedented figure for large-scale federal building projects. GSA manages a vast portfolio of real estate, and modernization projects can vary significantly in cost based on building size, age, complexity of required upgrades, and geographic location. Projects involving complete overhauls, structural improvements, significant system replacements (HVAC, electrical, plumbing), and interior fit-outs often fall into this multi-million dollar range. For context, other major federal building renovations or new constructions managed by GSA can range from tens of millions to over a hundred million dollars. This award appears to be in line with the upper-middle to high end of typical modernization project costs for significant federal facilities.

What are the primary risks associated with a fixed-price incentive (FPI) contract for a multi-year modernization project?

Fixed-price incentive (FPI) contracts aim to share cost risks and provide incentives for efficient performance. For a multi-year modernization project like the Altmeyer Building, primary risks include: 1) Cost Overruns: If the contractor's actual costs exceed the target cost, both the government and contractor share the excess cost up to a ceiling price. However, if costs escalate beyond the ceiling, the government might be liable for the higher amount. 2) Scope Creep: Unforeseen issues discovered during modernization (e.g., asbestos, structural problems) can lead to change orders, potentially increasing costs and extending timelines, which can strain the incentive structure. 3) Performance Incentives: The effectiveness of the incentive depends on clearly defined and measurable performance targets. If targets are poorly defined or unattainable, the incentive may not drive desired outcomes. 4) Contractor Motivation: While FPI aims to motivate efficiency, overly aggressive cost-cutting by the contractor could compromise quality or safety if not adequately monitored.

What is the historical spending pattern for the Altmeyer Building modernization or similar GSA projects?

The provided data reflects a single award of $122 million for the Altmeyer Building modernization, with a start date of March 26, 2018, and an end date of March 25, 2021. This suggests that the $122 million represents the total anticipated cost for the entire project under this definitive contract. There is no indication of prior or subsequent spending specifically for this modernization effort within the given data. For similar GSA modernization projects, historical spending patterns would typically show a phased disbursement of funds over the contract duration, tied to milestones and progress payments. Analyzing GSA's broader spending on building modernization across its portfolio would reveal trends in investment levels, project types, and average contract values over time.

How does the number of bidders (9) impact the value for taxpayers in this full and open competition?

A robust competition with 9 bidders for this full and open contract significantly benefits taxpayers. A larger pool of bidders generally leads to more competitive pricing as contractors vie for the award. This increased competition drives down the offered prices and encourages contractors to propose more efficient methods and cost-effective solutions to win the bid. Furthermore, a higher number of bidders suggests a healthy market for commercial and institutional building construction services, indicating that qualified firms are available and willing to compete for federal contracts. This scenario increases the likelihood that the government secures the best possible value, balancing cost, quality, and performance, thereby maximizing the return on taxpayer investment.

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: GS-03-P-17-DX-C-0006

Offers Received: 9

Pricing Type: FIXED PRICE INCENTIVE (L)

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: $122,000,000

Exercised Options: $122,000,000

Current Obligation: $122,000,000

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline