Commerce Department's $64.8M NIST Building Addition Contract Awarded to Hensel Phelps Construction Co

Contract Overview

Contract Amount: $64,840,988 ($64.8M)

Contractor: Hensel Phelps Construction CO

Awarding Agency: Department of Commerce

Start Date: 2016-09-30

End Date: 2022-06-15

Contract Duration: 2,084 days

Daily Burn Rate: $31.1K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: IGF::OT::IGF - DESIGN AND BUILD B/C WING ADDITION TO BUILDING 245

Place of Performance

Location: GAITHERSBURG, MONTGOMERY County, MARYLAND, 20899

State: Maryland Government Spending

Plain-Language Summary

Department of Commerce obligated $64.8 million to HENSEL PHELPS CONSTRUCTION CO for work described as: IGF::OT::IGF - DESIGN AND BUILD B/C WING ADDITION TO BUILDING 245 Key points: 1. The contract represents a significant investment in federal infrastructure, specifically for the National Institute of Standards and Technology. 2. Hensel Phelps Construction Co. secured this large contract, indicating their capacity for major federal construction projects. 3. The project duration of over 2000 days suggests a complex and long-term construction undertaking. 4. The firm-fixed-price contract type aims to provide cost certainty for the government. 5. The absence of small business set-aside flags suggests the primary contractor is not a small business, and subcontracting opportunities for small businesses will need to be monitored. 6. The project is located in Maryland, contributing to the local economy and workforce.

Value Assessment

Rating: fair

Benchmarking the value of this specific contract is challenging without comparable data for similar NIST building additions. However, the firm-fixed-price structure suggests an attempt to control costs. The duration of the contract (over 5 years) implies a substantial scope of work, and the final cost should be evaluated against the initial estimates and any change orders. Without detailed cost breakdowns or independent cost estimates, a definitive value-for-money assessment is difficult.

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. This competitive process is generally expected to yield better pricing and value for the government. The specific number of bids received is not provided, which would offer further insight into the intensity of the competition.

Taxpayer Impact: Full and open competition is favorable for taxpayers as it typically drives down costs through market forces, ensuring the government receives competitive pricing for construction services.

Public Impact

The primary beneficiaries are the National Institute of Standards and Technology, which will gain expanded facilities for its research and operations. The contract delivers construction services for a significant building addition, enhancing federal infrastructure. The geographic impact is localized to Maryland, where the construction will take place. Workforce implications include job creation for construction workers and related trades in the Maryland area.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if project scope changes significantly or unforeseen issues arise during the extended construction period.
Dependence on a single large contractor for a critical infrastructure project could pose risks if performance issues emerge.
Limited visibility into the specific cost drivers and profit margins without detailed bid information.

Positive Signals

Awarded through full and open competition, suggesting a robust selection process.
Firm-fixed-price contract type provides cost predictability for the government.
The contractor, Hensel Phelps Construction Co., is a well-established entity in the construction industry, implying experience and capability.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector. This sector is characterized by large-scale projects requiring significant capital investment and specialized labor. Federal construction spending, particularly for research facilities like those at NIST, is a key component of this market. Benchmarks for similar federal building projects would typically consider factors like square footage, complexity of design, and location.

Small Business Impact

The contract was not awarded as a small business set-aside, and the 'sb' field is false. This indicates that the primary contract was not specifically targeted towards small businesses. While Hensel Phelps Construction Co. may utilize small business subcontractors, there is no explicit requirement or guarantee within the contract details provided. Further analysis would be needed to determine the extent of small business subcontracting.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting agency (Department of Commerce, NIST) through contract officers and technical representatives. Performance monitoring, site inspections, and adherence to contract terms are standard oversight mechanisms. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Federal Building Construction
National Institute of Standards and Technology Facilities
Department of Commerce Infrastructure Projects
Large-Scale Construction Contracts

Risk Flags

Extended project duration may increase risk of cost escalation or scope creep.
Lack of specific small business subcontracting goals requires monitoring.
Value for money assessment is limited without detailed cost breakdowns or comparable project data.

Frequently Asked Questions

What is this federal contract paying for?

Department of Commerce awarded $64.8 million to HENSEL PHELPS CONSTRUCTION CO. IGF::OT::IGF - DESIGN AND BUILD B/C WING ADDITION TO BUILDING 245

Who is the contractor on this award?

The obligated recipient is HENSEL PHELPS CONSTRUCTION CO.

Which agency awarded this contract?

Awarding agency: Department of Commerce (National Institute of Standards and Technology).

What is the total obligated amount?

The obligated amount is $64.8 million.

What is the period of performance?

Start: 2016-09-30. End: 2022-06-15.

What is the track record of Hensel Phelps Construction Co. on federal contracts, particularly similar large-scale construction projects?

Hensel Phelps Construction Co. is a major player in the construction industry with a significant history of undertaking large federal projects. Their portfolio includes numerous contracts for various government agencies, often involving complex infrastructure, research facilities, and institutional buildings. A review of their past performance on similar projects would likely reveal a pattern of successful delivery, though specific details regarding cost performance, schedule adherence, and quality on prior federal contracts would require deeper investigation into contract databases and performance reports. Their established presence suggests a capacity to manage the scale and complexity of the NIST building addition.

How does the awarded amount of $64.8 million compare to the estimated cost or budget for this NIST building addition?

Without access to the original budget or cost estimates for the NIST building addition, it is difficult to definitively assess whether the $64.8 million award represents good value. However, the fact that it was awarded under full and open competition suggests that the bids received were considered competitive by the agency. To provide a more precise comparison, one would need to examine the initial cost projections, any pre-solicitation notices, and potentially compare the cost per square foot to similar government construction projects completed around the same time in the same region. The firm-fixed-price nature of the contract implies that the awarded amount was intended to cover all costs and profit.

What are the primary risks associated with a construction project of this duration and value?

Construction projects of this magnitude and duration (over 2000 days, approximately 5.7 years) carry inherent risks. Key risks include potential cost overruns due to unforeseen site conditions, material price fluctuations, labor shortages, or changes in regulatory requirements. Schedule delays are also a significant concern, stemming from weather impacts, supply chain disruptions, or contractor performance issues. Furthermore, the complexity of integrating a new building addition with existing NIST facilities presents technical risks. The firm-fixed-price contract aims to mitigate some cost risks for the government, but the contractor bears the primary burden of managing these factors within the awarded price.

How effective is the firm-fixed-price contract type in ensuring value for money on this project?

The firm-fixed-price (FFP) contract type is generally considered effective in ensuring value for money for the government on construction projects when the scope of work is well-defined and risks are understood. It shifts the majority of cost risk to the contractor, incentivizing them to control expenses and complete the project efficiently to maximize profit. For the NIST building addition, this means the government has a high degree of certainty regarding the total cost. However, if the scope changes significantly, or if unforeseen issues require substantial modifications, the FFP structure can sometimes lead to more contentious change order negotiations. The success of FFP in delivering value hinges on the initial clarity of the project requirements and the contractor's ability to manage risks.

What is the historical spending pattern for construction projects at the National Institute of Standards and Technology?

Analyzing historical spending patterns for construction projects at NIST would provide context for the $64.8 million award. This would involve examining past contracts for facility upgrades, new building constructions, and major renovations. Key metrics to consider would include the average contract value, the types of contractors engaged (large vs. small business), the prevalence of different contract types (FFP, cost-plus), and the typical duration of such projects. Understanding these patterns can help determine if this contract is an outlier in terms of cost or scale, or if it aligns with NIST's historical investment in its infrastructure. Without specific historical data, it's difficult to place this contract within a broader trend.

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: TWO STEP

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: $89,145,137

Exercised Options: $64,840,988

Current Obligation: $64,840,988

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: DOCSB134116CQ0026

IDV Type: IDC

Timeline