Hensel Phelps Construction Co. awarded $27.6M for Tucson ATCT, a definitive contract with firm fixed pricing

Contract Overview

Contract Amount: $27,621,319 ($27.6M)

Contractor: Hensel Phelps Construction CO

Awarding Agency: Department of Transportation

Start Date: 2014-03-05

End Date: 2016-04-22

Contract Duration: 779 days

Daily Burn Rate: $35.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: TUCSON ATCT IGF::OT::IGF

Place of Performance

Location: GREELEY, WELD County, COLORADO, 80631

State: Colorado Government Spending

Plain-Language Summary

Department of Transportation obligated $27.6 million to HENSEL PHELPS CONSTRUCTION CO for work described as: TUCSON ATCT IGF::OT::IGF Key points: 1. The contract's firm fixed price structure suggests a clear scope and budget, potentially limiting cost overruns. 2. With 3 bidders, the competition level appears moderate, offering some price discovery but potentially not the lowest possible price. 3. The contract duration of 779 days indicates a significant project timeline, requiring sustained oversight. 4. The project falls under commercial and institutional building construction, a common sector for federal procurement. 5. The absence of small business set-aside flags suggests the primary contractor is likely a large business, with subcontracting opportunities yet to be detailed.

Value Assessment

Rating: good

The awarded amount of $27.6 million for the Tucson ATCT project appears within a reasonable range for large-scale construction contracts of this nature. Benchmarking against similar air traffic control tower construction or major institutional building projects would provide a more precise value-for-money assessment. The firm fixed price contract type generally indicates that the contractor assumes the risk for cost overruns, which can be favorable 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, with three bids received. This level of competition is generally positive, as it allows multiple contractors to vie for the work, theoretically driving down prices and encouraging efficiency. However, with only three bidders, it's possible that the market could support more participants, and further analysis might explore if any potential bidders were deterred.

Taxpayer Impact: A full and open competition with multiple bidders is beneficial for taxpayers as it increases the likelihood of securing competitive pricing and encourages a wider pool of contractors to participate in government projects.

Public Impact

The primary beneficiaries are the Federal Aviation Administration (FAA) and the traveling public, who will gain an updated air traffic control facility. The services delivered include the construction of a new air traffic control tower and associated facilities. The geographic impact is localized to Tucson, Arizona, improving local aviation infrastructure. Workforce implications include job creation for construction workers and related trades during the project's duration.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if initial requirements are not precisely defined, leading to cost increases despite fixed pricing.
Risk of delays if unforeseen site conditions or permitting issues arise, impacting the project timeline.
Ensuring quality of construction meets FAA standards throughout the 779-day duration requires diligent oversight.

Positive Signals

Firm fixed price contract provides cost certainty for the government.
Full and open competition suggests a robust bidding process.
Hensel Phelps Construction Co. is a well-established contractor with a history of large-scale projects.

Sector Analysis

This contract falls within the commercial and institutional building construction sector, a significant segment of the federal contracting market. The Federal Aviation Administration (FAA) frequently procures construction services for its infrastructure, including air traffic control towers, airports, and related facilities. Spending in this sector is driven by the need to modernize and maintain critical national infrastructure, with projects often involving complex engineering and long construction timelines. Comparable benchmarks would include other large-scale government building projects or similar air traffic control tower constructions across different regions.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This suggests that the primary contract was awarded to a large business, likely Hensel Phelps Construction Co. While there are no explicit subcontracting requirements detailed here, large federal construction contracts often involve significant subcontracting opportunities for various trades and specialized services. The impact on the small business ecosystem would depend on whether Hensel Phelps actively seeks out and engages small businesses for subcontracting roles.

Oversight & Accountability

Oversight for this contract would primarily fall under the Federal Aviation Administration (FAA), the contracting agency. Given the project's scale and duration, regular site inspections, progress reviews, and financial audits are expected. Accountability measures would be tied to the contract's performance clauses and the firm fixed price structure. Transparency is generally maintained through contract award databases and public reporting, though specific oversight reports from an Inspector General would depend on whether any investigations or audits were initiated.

Related Government Programs

FAA Air Traffic Control Tower Modernization Programs
Federal Building and Infrastructure Construction
Department of Transportation Capital Improvement Projects

Risk Flags

Potential for cost overruns if scope is not tightly managed.
Risk of schedule delays due to project complexity or unforeseen issues.
Need for robust quality assurance to meet FAA standards.

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $27.6 million to HENSEL PHELPS CONSTRUCTION CO. TUCSON ATCT IGF::OT::IGF

Who is the contractor on this award?

The obligated recipient is HENSEL PHELPS CONSTRUCTION CO.

Which agency awarded this contract?

Awarding agency: Department of Transportation (Federal Aviation Administration).

What is the total obligated amount?

The obligated amount is $27.6 million.

What is the period of performance?

Start: 2014-03-05. End: 2016-04-22.

What is Hensel Phelps Construction Co.'s track record with the Federal Aviation Administration and similar large-scale construction projects?

Hensel Phelps Construction Co. has a substantial track record in large-scale construction, including significant work for government agencies. While specific details on their FAA project history require deeper database searches, their general portfolio includes major airport facilities, institutional buildings, and infrastructure projects. Their experience with firm fixed-price contracts and managing complex timelines is crucial for a project like the Tucson ATCT. A review of past performance evaluations and any past performance issues would provide a clearer picture of their reliability and capability in delivering projects on time and within budget for federal clients.

How does the $27.6 million award compare to the estimated cost or budget for the Tucson ATCT project?

The provided data shows the awarded amount ($27.6 million) but does not include the initial estimated cost or budget set by the FAA. To assess value for money, a comparison between the awarded price and the government's independent cost estimate is necessary. If the awarded amount is significantly lower than the estimate, it suggests strong competition and potentially good negotiation. Conversely, if it's close to or exceeds the estimate, it might warrant further scrutiny into the estimation process or the bidding dynamics. Without the estimated cost, a definitive value assessment is incomplete.

What are the primary risks associated with a firm fixed-price contract for a project of this duration (779 days)?

The primary risk with a firm fixed-price (FFP) contract, especially for a long-duration project like the Tucson ATCT (779 days), is the potential for scope creep. If the project requirements are not meticulously defined and controlled, the contractor may seek additional compensation for work deemed outside the original scope, even under an FFP. Another risk is contractor performance; if the contractor faces financial difficulties or management issues, it could lead to delays or quality compromises, which are harder to rectify under FFP without significant contractual disputes. The government also bears the risk if unforeseen conditions arise that fundamentally alter the project's feasibility or cost, potentially leading to contract termination or renegotiation.

What does the 'DEFINITIVE CONTRACT' award type imply for the project's flexibility and potential for modifications?

A 'DEFINITIVE CONTRACT' is a type of contract that is fixed-price or cost-reimbursed, representing a firm commitment by the government to purchase the specified supplies or services. In this case, it's a firm fixed-price definitive contract. This implies that the price is set and not subject to adjustment based on the contractor's cost experience. While definitive contracts are firm commitments, they can still be modified through formal contract modifications if the scope, schedule, or terms need to change. However, modifications to FFP contracts are generally scrutinized to ensure they do not undermine the original competitive pricing and are justified by changes in requirements or unforeseen circumstances.

How does the number of bidders (3) influence the price discovery and potential for cost savings for taxpayers?

Having three bidders suggests a moderate level of competition. While more bidders generally lead to better price discovery and potentially lower prices for taxpayers, three bidders still provide a competitive environment. It indicates that at least three firms were interested and capable of undertaking the project. However, a higher number of bidders (e.g., five or more) could have potentially driven the price down further. The specific pricing strategies of the three bidders and the government's negotiation process would determine the ultimate cost savings realized. Without knowing the bid spread, it's difficult to definitively say if this was the most cost-effective outcome possible.

What is the significance of the 'PSC' (Product or Service Code) being blank, and what does NAICS code 236220 indicate?

The blank 'PSC' (Product or Service Code) field is unusual, as PSC codes are typically used to categorize the type of product or service being procured. This might indicate an oversight in data entry or a specific internal categorization method. However, the NAICS (North American Industry Classification System) code 236220, 'Commercial and Institutional Building Construction,' clearly defines the nature of the work. This code covers establishments primarily engaged in the construction or alteration and repair of nonresidential buildings, such as commercial, industrial, and institutional structures. This aligns with the construction of an air traffic control tower and related facilities.

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

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 420 SIXTH AVE, GREELEY, CO, 80631

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

Financial Breakdown

Contract Ceiling: $27,621,319

Exercised Options: $27,621,319

Current Obligation: $27,621,319

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline