GSA awards $188M construction contract for Calexico West Land Port of Entry modernization

Contract Overview

Contract Amount: $188,297,215 ($188.3M)

Contractor: Hensel Phelps Construction CO.

Awarding Agency: General Services Administration

Start Date: 2019-09-27

End Date: 2026-06-30

Contract Duration: 2,468 days

Daily Burn Rate: $76.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Construction

Official Description: CONSTRUCTION MANAGER AS CONSTRUCTOR (CMC) SERVICES FOR THE MODERNIZATION AND EXPANSION OF THE CALEXICO WEST LAND PORT OF ENTRY PHASE 2A, CALEXICO, CALIFORNIA.

Place of Performance

Location: CALEXICO, IMPERIAL County, CALIFORNIA, 92231

State: California Government Spending

Plain-Language Summary

General Services Administration obligated $188.3 million to HENSEL PHELPS CONSTRUCTION CO. for work described as: CONSTRUCTION MANAGER AS CONSTRUCTOR (CMC) SERVICES FOR THE MODERNIZATION AND EXPANSION OF THE CALEXICO WEST LAND PORT OF ENTRY PHASE 2A, CALEXICO, CALIFORNIA. Key points: 1. Contract awarded to Hensel Phelps Construction Co. for a significant infrastructure project. 2. Project involves modernization and expansion of a key border crossing. 3. Contract type is Cost Plus Incentive Fee, suggesting shared risk and reward. 4. Duration of 2468 days indicates a long-term, complex undertaking. 5. Location in Calexico, California, highlights strategic border infrastructure investment. 6. This project falls under the Commercial and Institutional Building Construction NAICS code.

Value Assessment

Rating: fair

The contract value of $188.3 million for construction management services is substantial, reflecting the scale of the Calexico West Land Port of Entry modernization. Benchmarking this against similar large-scale federal construction projects is challenging without more granular cost breakdowns. The Cost Plus Incentive Fee (CPIF) structure implies that cost efficiencies and performance targets will influence the final price, making a direct comparison to fixed-price contracts difficult. However, the duration and scope suggest a significant investment in critical infrastructure.

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. This competitive process is generally expected to yield fair market pricing and encourage efficiency from the selected contractor. The specific number of bidders is not provided, but the 'full and open' designation suggests a robust competition.

Taxpayer Impact: Full and open competition is favorable for taxpayers as it increases the likelihood of receiving competitive pricing and encourages contractors to offer their best value propositions.

Public Impact

Benefits the General Services Administration (GSA) in its mission to manage federal buildings and infrastructure. Delivers modernization and expansion services for a critical land port of entry. Geographic impact is concentrated in Calexico, California, enhancing border operations. Workforce implications include job creation in the construction sector in Southern California.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Incentive Fee contracts can sometimes lead to higher final costs if not managed diligently.
Long project duration increases exposure to potential cost overruns due to market fluctuations or unforeseen issues.
The specific performance metrics for the incentive fee are not detailed, making it hard to assess the potential for cost savings.
Reliance on a single contractor for a multi-year project carries inherent execution risks.

Positive Signals

Awarded through full and open competition, suggesting a competitive bidding process.
The project aims to modernize and expand critical border infrastructure, a high-priority government objective.
The GSA's involvement indicates adherence to established federal procurement and project management standards.
The CPIF structure incentivizes the contractor to perform efficiently and meet cost targets.

Sector Analysis

This contract falls within the construction sector, specifically Commercial and Institutional Building Construction. The General Services Administration (GSA) is a major federal entity responsible for managing government buildings and infrastructure. Projects like the modernization of land ports of entry are crucial for national security and trade facilitation. Comparable spending benchmarks would involve other large-scale federal construction projects, particularly those involving border infrastructure or significant facility upgrades, which often run into hundreds of millions of dollars.

Small Business Impact

The contract was awarded under full and open competition and does not indicate any specific small business set-aside. While the prime contractor is Hensel Phelps Construction Co., a large entity, there may be opportunities for small businesses to participate as subcontractors. The extent of small business subcontracting will depend on the prime contractor's strategy and GSA's subcontracting goals for this project.

Oversight & Accountability

Oversight for this contract will primarily be managed by the General Services Administration (GSA), likely through its Public Buildings Service. Accountability measures are embedded within the Cost Plus Incentive Fee structure, which ties contractor compensation to performance and cost targets. Transparency is expected through GSA's public contract data, though detailed project performance metrics may not be fully public. Inspector General jurisdiction would typically fall under the GSA's Office of Inspector General for audits and investigations.

Related Government Programs

Federal Border Infrastructure Modernization Programs
GSA Public Buildings Service Construction Projects
Land Port of Entry Improvement Initiatives
Department of Homeland Security Infrastructure Support

Risk Flags

Potential for cost overruns due to long project duration and CPIF structure.
Risk of operational disruptions at the port of entry during construction.
Security challenges inherent in border infrastructure projects.
Need for extensive interagency coordination.

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $188.3 million to HENSEL PHELPS CONSTRUCTION CO.. CONSTRUCTION MANAGER AS CONSTRUCTOR (CMC) SERVICES FOR THE MODERNIZATION AND EXPANSION OF THE CALEXICO WEST LAND PORT OF ENTRY PHASE 2A, CALEXICO, CALIFORNIA.

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 $188.3 million.

What is the period of performance?

Start: 2019-09-27. End: 2026-06-30.

What is the historical spending by GSA on similar land port of entry modernization projects?

The General Services Administration (GSA) has undertaken several significant projects to modernize and expand land ports of entry across the United States, recognizing their critical role in national security, trade, and international relations. While specific historical spending figures for 'similar' projects can vary widely based on scope, location, and complexity, GSA's budget allocations for infrastructure improvements often run into hundreds of millions of dollars annually. For instance, projects at ports like Nogales, Arizona, and Laredo, Texas, have also involved substantial investments in facility upgrades, technology integration, and capacity expansion. The Calexico West project, with its $188 million price tag, aligns with the scale of these major infrastructure undertakings. Analyzing GSA's historical obligations for construction and facility modernization within its portfolio provides context, showing a consistent commitment to upgrading aging infrastructure and enhancing operational efficiency at key border crossings.

How does the Cost Plus Incentive Fee (CPIF) structure typically impact final project costs compared to other contract types?

The Cost Plus Incentive Fee (CPIF) contract type is designed to share risks and rewards between the government and the contractor. In a CPIF arrangement, the final cost is determined by the actual costs incurred plus a fee that is adjusted based on the contractor's performance against pre-defined targets, such as cost, schedule, or technical performance. If the contractor performs better than target (e.g., comes in under budget), both the government and the contractor benefit, with the contractor potentially earning a higher fee and the government realizing cost savings. Conversely, if performance falls short, the contractor's fee is reduced. Compared to fixed-price contracts, CPIF can offer more flexibility for complex projects where costs are uncertain, potentially leading to better value if managed effectively. However, it also carries a risk of higher final costs than initially estimated if targets are not met or if the base fee is set too high. Diligent oversight by the contracting agency is crucial to ensure the incentive structure drives the desired outcomes without inflating the overall expenditure.

What are the key performance indicators (KPIs) likely being used to determine the incentive fee for this contract?

For a Cost Plus Incentive Fee (CPIF) contract like the one awarded for the Calexico West Land Port of Entry modernization, the key performance indicators (KPIs) are crucial for determining the contractor's incentive fee. While the specific KPIs are not detailed in the provided data, they typically revolve around project cost, schedule adherence, and quality of work. For this project, KPIs could include: 1) Cost Control: Meeting or exceeding targets for keeping project expenditures within allocated budgets. 2) Schedule Performance: Completing project milestones and the overall project by the established deadlines. 3) Quality and Safety: Adherence to construction standards, specifications, and maintaining a strong safety record on site. 4) Functional Performance: Ensuring the modernized facilities meet the operational requirements for border processing and security. The GSA would have established target costs and fee ranges, with the final fee being adjusted upwards or downwards based on Hensel Phelps Construction Co.'s performance against these defined metrics.

What is Hensel Phelps Construction Co.'s track record with large-scale federal infrastructure projects, particularly for GSA?

Hensel Phelps Construction Co. is a well-established and reputable general contractor with extensive experience in large-scale federal infrastructure projects. They have a significant history of working with the General Services Administration (GSA) on various building and renovation projects across the country. Their portfolio includes courthouses, federal office buildings, airports, and other public facilities. Notably, Hensel Phelps has a strong track record in complex construction endeavors, often involving significant budgets and challenging timelines. Their experience with projects of similar scale and type, such as major transportation hubs or government facilities, suggests they possess the necessary expertise, resources, and management capabilities to successfully execute the modernization and expansion of the Calexico West Land Port of Entry. Past performance reviews and contract awards from GSA and other federal agencies would provide more specific details on their success rates and client satisfaction.

Are there any specific risks associated with constructing facilities at a land port of entry, and how might they be mitigated?

Constructing facilities at a land port of entry presents unique risks that require careful management. These include: 1) Operational Continuity: The need to maintain ongoing port operations during construction, which can disrupt workflows and require phased construction approaches. Mitigation involves close coordination with GSA and Customs and Border Protection (CBP) to minimize impact. 2) Security Concerns: Working in a sensitive border environment necessitates stringent security protocols for personnel and materials. Mitigation includes background checks, controlled access, and adherence to security directives. 3) Environmental Factors: Ports of entry can be located in challenging climates (e.g., desert environments), impacting construction schedules and material durability. Mitigation involves selecting appropriate materials and scheduling work to avoid extreme conditions. 4) Interagency Coordination: Multiple federal agencies (GSA, CBP, etc.) and potentially international partners are involved, requiring complex coordination. Mitigation relies on clear communication channels and established interagency agreements. 5) Unforeseen Site Conditions: As with any large construction project, discovering unexpected subsurface conditions or existing infrastructure issues can cause delays and cost increases. Mitigation involves thorough site investigations and contingency planning.

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: 47PK0119R0007

Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE (V)

Evaluated Preference: NONE

Contractor Details

Parent Company: Hensel Phelps Construction CO

Address: 4129 E VAN BUREN ST STE 100, PHOENIX, AZ, 85008

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

Financial Breakdown

Contract Ceiling: $188,297,215

Exercised Options: $188,297,215

Current Obligation: $188,297,215

Actual Outlays: $140,312,989

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline