Hensel Phelps Construction Awarded $124.7M for NIH Facilities, Highlighting Commercial Building Sector Activity

Contract Overview

Contract Amount: $124,676,720 ($124.7M)

Contractor: Hensel Phelps Construction CO

Awarding Agency: Department of Health and Human Services

Start Date: 2024-07-09

End Date: 2027-10-31

Contract Duration: 1,209 days

Daily Burn Rate: $103.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: THIS AWARD INCLUDES ALL DOCUMENTS INCLUDED IN THE TASK ORDER REQUEST FOR PROPOSAL #C103969, TO INCLUDE ALL AMENDMENTS (1-2) AND AMENDMENT INCORPORATED DOCUMENTATION, THE REVISED CONSTRUCTION WAGE RATES GENERAL DECISION NUMBER MT20240060 DATED 06/28/2

Place of Performance

Location: HAMILTON, RAVALLI County, MONTANA, 59840

State: Montana Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $124.7 million to HENSEL PHELPS CONSTRUCTION CO for work described as: THIS AWARD INCLUDES ALL DOCUMENTS INCLUDED IN THE TASK ORDER REQUEST FOR PROPOSAL #C103969, TO INCLUDE ALL AMENDMENTS (1-2) AND AMENDMENT INCORPORATED DOCUMENTATION, THE REVISED CONSTRUCTION WAGE RATES GENERAL DECISION NUMBER MT20240060 DATED 06/28/2 Key points: 1. Value for money assessed through competitive bidding process. 2. Competition dynamics indicate a robust market for large-scale construction. 3. Risk indicators include project duration and fixed-price contract type. 4. Performance context is within the National Institutes of Health's infrastructure development. 5. Sector positioning is in commercial and institutional building construction, a significant market segment.

Value Assessment

Rating: good

The contract value of $124.7 million for a multi-year facility construction project appears reasonable given the scope and duration. Benchmarking against similar large-scale institutional building projects would provide a more precise value-for-money assessment. The firm-fixed-price structure suggests that the contractor bears the primary risk for cost overruns, which can be a positive indicator for the government if the scope is well-defined.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders were likely considered. The presence of a competitive process generally leads to better pricing and value for the government. The specific number of bidders is not provided, but the 'full and open' designation suggests a healthy level of market interest and engagement.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it drives down costs through market forces and encourages a wider range of qualified contractors to participate, leading to potentially more innovative and cost-effective solutions.

Public Impact

The primary beneficiaries are the National Institutes of Health (NIH), which will receive upgraded or new facilities to support its research and development mission. Services delivered include commercial and institutional building construction, likely encompassing new construction, renovation, or expansion of research facilities, laboratories, and administrative buildings. The geographic impact is centered in Montana (MT), where the construction activities will take place. Workforce implications include job creation for construction trades, engineers, architects, and project managers in the local Montana economy.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for construction delays impacting research timelines.
Risk of cost escalation if unforeseen site conditions arise, despite fixed-price contract.
Ensuring compliance with specific federal building codes and environmental regulations.

Positive Signals

Award to an established contractor (Hensel Phelps) suggests a track record of successful project completion.
Firm-fixed-price contract shifts cost risk to the contractor.
Full and open competition likely secured competitive pricing.

Sector Analysis

The commercial and institutional building construction sector is a substantial part of the U.S. economy, encompassing a wide range of projects from office buildings to research facilities. Federal spending in this area supports critical infrastructure for government agencies. Comparable spending benchmarks would involve analyzing other large federal construction awards for similar institutions or agencies.

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 businesses through a set-aside. However, the prime contractor, Hensel Phelps, may still engage small businesses as subcontractors as part of their overall project execution strategy.

Oversight & Accountability

Oversight for this contract will likely be managed by the National Institutes of Health contracting officers and project managers. Accountability measures are embedded in the firm-fixed-price contract terms, requiring delivery of specified facilities within budget. Transparency is generally maintained through federal contract databases, though detailed project-specific oversight reports may not be publicly available.

Related Government Programs

NIH Research Facilities Construction
Federal Building and Infrastructure Projects
Large-Scale Commercial Construction Contracts
Department of Health and Human Services Capital Investments

Risk Flags

Potential for cost overruns if scope is not tightly managed.
Risk of project delays impacting NIH research timelines.
Ensuring compliance with evolving construction regulations and wage decisions.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $124.7 million to HENSEL PHELPS CONSTRUCTION CO. THIS AWARD INCLUDES ALL DOCUMENTS INCLUDED IN THE TASK ORDER REQUEST FOR PROPOSAL #C103969, TO INCLUDE ALL AMENDMENTS (1-2) AND AMENDMENT INCORPORATED DOCUMENTATION, THE REVISED CONSTRUCTION WAGE RATES GENERAL DECISION NUMBER MT20240060 DATED 06/28/2

Who is the contractor on this award?

The obligated recipient is HENSEL PHELPS CONSTRUCTION CO.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (National Institutes of Health).

What is the total obligated amount?

The obligated amount is $124.7 million.

What is the period of performance?

Start: 2024-07-09. End: 2027-10-31.

What is Hensel Phelps Construction Co.'s track record with federal construction contracts, particularly with the NIH or similar research institutions?

Hensel Phelps Construction Co. is a well-established general contractor with a significant history of undertaking large-scale federal projects. While specific details on their past performance with the NIH are not provided in this data snippet, their extensive experience in commercial and institutional building construction suggests a capacity to handle complex projects. A deeper dive into their contract history, including past performance evaluations and any reported disputes or successes on similar government contracts, would be necessary for a comprehensive assessment. Their longevity in the industry implies a generally positive track record, but specific project outcomes and client satisfaction levels would require further investigation.

How does the $124.7 million award compare to other recent NIH facility construction projects in terms of cost and scope?

Without a direct comparison dataset of recent NIH facility construction projects, it is challenging to definitively benchmark this $124.7 million award. However, the value suggests a significant undertaking, likely involving new construction or major renovation of substantial research or administrative facilities. Projects of this magnitude typically span several years and require extensive planning and execution. To provide a robust comparison, one would need to analyze the square footage, complexity of systems (e.g., specialized labs), and duration of other comparable NIH awards. The firm-fixed-price nature of this award also influences its comparability, as it internalizes cost risk for the contractor.

What are the primary risks associated with a firm-fixed-price contract for a multi-year construction project of this scale?

The primary risk with a firm-fixed-price (FFP) contract for a large, multi-year construction project is the potential for the contractor to incur significant losses if costs exceed the agreed-upon price. This can occur due to unforeseen site conditions, material price escalations beyond market fluctuations, labor disputes, or design changes. While the FFP structure shifts cost risk to the contractor, the government's risk lies in the potential for contractor default or a decline in quality if the contractor attempts to cut corners to maintain profitability. Effective project management, clear scope definition, and robust oversight are crucial to mitigate these risks.

What is the expected impact of this contract on the local economy in Montana, considering the construction workforce implications?

This $124.7 million construction contract is expected to have a positive impact on the local economy in Montana. It will likely create numerous jobs for skilled tradespeople, including electricians, plumbers, carpenters, and heavy equipment operators, as well as for project managers, engineers, and administrative staff. The duration of the project (estimated 1209 days or over 3 years) suggests sustained employment opportunities. Furthermore, the project will likely stimulate local businesses through the procurement of materials, equipment, and services, contributing to overall economic activity in the region where the construction is taking place.

How does the 'full and open competition' award mechanism influence the potential for innovation and cost savings for this NIH project?

The 'full and open competition' award mechanism is designed to maximize both innovation and cost savings. By allowing any qualified contractor to bid, the government benefits from a wider pool of potential solutions and approaches to meet project requirements. This competitive pressure incentivizes bidders to offer their most cost-effective proposals and potentially innovative construction methods to win the contract. While the data does not specify the number of bids received, the process itself is intended to foster a market where efficiency and value are rewarded, ultimately benefiting the taxpayers through potentially lower prices and higher quality outcomes compared to less competitive procurement methods.

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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: C103696

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1600 TYSONS BLVD STE 800, TYSONS CORNER, VA, 22102

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

Financial Breakdown

Contract Ceiling: $124,676,720

Exercised Options: $124,676,720

Current Obligation: $124,676,720

Actual Outlays: $36,943,234

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 75N99019D00016

IDV Type: IDC

Timeline