GSA awards $160M design-build contract for Miramar Federal Office Building to Hensel Phelps Construction Co

Contract Overview

Contract Amount: $159,754,654 ($159.8M)

Contractor: Hensel Phelps Construction CO

Awarding Agency: General Services Administration

Start Date: 2012-03-15

End Date: 2016-09-26

Contract Duration: 1,656 days

Daily Burn Rate: $96.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 9

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: IGF::OT::IGF OTHER FUNCTIONS. THIS IS THE BASE CONTRACT AWARDED TO HENSEL PHELPS CONSTRUCTION CO. FOR THE BRIDGING, DESIGN-BUILD OF THE NEW FEDERAL OFFICE BUILDING IN MIRAMAR, BROWARD COUNTY, FLORIDA.

Place of Performance

Location: MIRAMAR, BROWARD County, FLORIDA, 33027

State: Florida Government Spending

Plain-Language Summary

General Services Administration obligated $159.8 million to HENSEL PHELPS CONSTRUCTION CO for work described as: IGF::OT::IGF OTHER FUNCTIONS. THIS IS THE BASE CONTRACT AWARDED TO HENSEL PHELPS CONSTRUCTION CO. FOR THE BRIDGING, DESIGN-BUILD OF THE NEW FEDERAL OFFICE BUILDING IN MIRAMAR, BROWARD COUNTY, FLORIDA. Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract is a firm-fixed-price definitive contract, providing cost certainty for the government. 3. The project involves the design-build of a new federal office building, indicating a significant construction undertaking. 4. The duration of the contract is 1656 days, spanning over four years. 5. The awardee, Hensel Phelps Construction Co., is a large, established construction firm. 6. The project is located in Miramar, Broward County, Florida, a specific geographic area.

Value Assessment

Rating: fair

The total award amount of $159.75 million for a federal office building is substantial. Benchmarking this against similar large-scale government construction projects would be necessary to fully assess value for money. Without specific cost breakdowns for design and construction elements, or comparisons to private sector projects of similar scope and complexity, a definitive value assessment is challenging. The firm-fixed-price nature of the contract helps control costs, but the overall efficiency and cost-effectiveness relative to market rates for design-build services of this magnitude require further analysis.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit a bid. The presence of 9 bids suggests a healthy level of interest and competition for this project. A competitive bidding process generally leads to better price discovery and can result in more favorable terms for the government. The number of bidders provides a reasonable indication that the government received multiple proposals to evaluate.

Taxpayer Impact: The full and open competition for this significant construction project likely resulted in a more competitive price for taxpayers compared to a sole-source or limited competition award. This process helps ensure that taxpayer funds are used efficiently by leveraging market forces to drive down costs.

Public Impact

The primary beneficiaries are federal agencies that will occupy the new office building, providing them with modern workspace. The project delivers a new federal office building, contributing to the federal government's infrastructure. The geographic impact is concentrated in Miramar, Broward County, Florida, potentially stimulating local economic activity. The construction phase will likely involve a significant workforce, including skilled trades and project management personnel. The completed building will support federal operations and services in the South Florida region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions or design changes arise, despite the fixed-price nature.
Long project duration increases exposure to market fluctuations in material costs and labor availability.
Dependence on a single large contractor for both design and construction could lead to coordination challenges.
Ensuring compliance with all federal building codes and environmental regulations throughout the long construction period.
Potential for delays impacting the operational readiness of federal agencies intended to occupy the building.

Positive Signals

Firm-fixed-price contract provides cost certainty and limits the government's exposure to cost overruns.
Design-build approach can streamline the project delivery process by integrating design and construction phases.
Award to an experienced contractor like Hensel Phelps suggests a higher likelihood of successful project execution.
Full and open competition indicates a robust bidding process, potentially leading to a well-priced contract.
Clear project scope for a new federal office building provides a defined objective for the contractor.

Sector Analysis

The construction industry, particularly commercial and institutional building construction, is a significant sector for federal spending. This contract falls under the General Services Administration's (GSA) Public Buildings Service, which manages federal real estate. The North American Industry Classification System (NAICS) code 236220, Commercial and Institutional Building Construction, encompasses projects like this. Federal spending in this sector is driven by the need for new facilities, upgrades, and maintenance of government infrastructure. Comparable spending benchmarks would involve analyzing other large federal building projects managed by GSA or other agencies.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). As a large-scale design-build project, it is typical for such contracts to be awarded to larger firms capable of managing the complexity and scale. There is no explicit information on subcontracting plans for small businesses within this award data. However, large prime contractors are often required to meet certain small business subcontracting goals, which could provide opportunities for small businesses to participate in this project indirectly.

Oversight & Accountability

Oversight for this contract would primarily fall under the General Services Administration (GSA), specifically its Public Buildings Service. Mechanisms likely include regular progress reviews, site inspections, and contract performance management. Accountability measures would be tied to the firm-fixed-price contract terms, with penalties for non-performance or delays. Transparency is generally facilitated through contract award databases and public reporting, though detailed project-specific oversight reports may not always be publicly accessible. 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 Construction
GSA Public Buildings Service Projects
Design-Build Contracts
Commercial Construction Projects
Government Infrastructure Development

Risk Flags

Potential for cost overruns if scope is not fully defined.
Risk of schedule delays due to complexity and duration.
Contractor performance and quality control.
Changes in federal requirements or budget priorities.
Site condition surprises impacting design/cost.

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $159.8 million to HENSEL PHELPS CONSTRUCTION CO. IGF::OT::IGF OTHER FUNCTIONS. THIS IS THE BASE CONTRACT AWARDED TO HENSEL PHELPS CONSTRUCTION CO. FOR THE BRIDGING, DESIGN-BUILD OF THE NEW FEDERAL OFFICE BUILDING IN MIRAMAR, BROWARD COUNTY, FLORIDA.

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 $159.8 million.

What is the period of performance?

Start: 2012-03-15. End: 2016-09-26.

What is the track record of Hensel Phelps Construction Co. on similar federal design-build projects?

Hensel Phelps Construction Co. is a well-established general contractor with extensive experience in large-scale construction projects, including numerous federal facilities. They have a history of undertaking complex design-build initiatives for various government agencies. Analyzing their past performance on similar federal office buildings or infrastructure projects would involve reviewing contract completion records, any reported disputes or claims, and client satisfaction feedback. Their portfolio often includes projects with significant dollar values and challenging timelines, suggesting a capacity to manage contracts of this magnitude. A deeper dive into specific past federal projects would reveal their success rates, adherence to budgets and schedules, and overall reputation within the federal contracting community.

How does the awarded price compare to industry benchmarks for similar federal office building construction?

To benchmark the $159.75 million award price, one would need to compare it against the cost per square foot or cost per cubic foot of recently completed federal office buildings of similar size, complexity, and location. Data from the Congressional Budget Office (CBO), GSA's own cost estimating tools, or industry cost databases (like RSMeans) could provide relevant benchmarks. Factors such as the specific design requirements, site conditions, and the inclusion of design services within the award amount are crucial for an accurate comparison. Without knowing the building's square footage and specific features, a precise comparison is difficult. However, the firm-fixed-price nature suggests the government sought to lock in costs, implying a level of confidence in the bid's alignment with market expectations at the time of award.

What are the primary risks associated with a large, multi-year design-build federal construction project?

Key risks for a project of this scale include potential cost escalation due to unforeseen site conditions, material price volatility, or scope creep, although the firm-fixed-price contract aims to mitigate direct cost overruns for the government. Schedule delays are another significant risk, stemming from weather, labor shortages, permitting issues, or design coordination problems. Contractor performance risk exists, even with experienced firms, and could lead to quality issues or non-compliance. Furthermore, changes in federal requirements or budget priorities during the multi-year duration could impact the project. Effective risk management by the GSA, including robust oversight, clear communication, and proactive issue resolution, is critical to navigating these challenges.

How effective is the design-build delivery method for federal construction projects compared to traditional design-bid-build?

The design-build method, used here, integrates the design and construction phases under a single contract. This can lead to faster project delivery, improved cost control, and better coordination between designers and builders, as potential constructability issues are identified earlier. It offers a single point of responsibility for the owner. In contrast, the traditional design-bid-build method separates these phases, potentially leading to longer timelines and more adversarial relationships if issues arise during construction. For federal projects, design-build can be highly effective when the scope is well-defined upfront, allowing the contractor flexibility in design while meeting performance requirements. However, it requires careful scope definition and robust oversight to ensure the final design meets all government needs.

What is the historical spending trend for federal office building construction by the GSA?

Historical spending by the GSA on federal office building construction fluctuates based on infrastructure needs, budget appropriations, and economic conditions. The GSA's portfolio includes new construction, major renovations, and lease acquisitions. Spending trends are influenced by factors such as agency space requirements, asset condition assessments, and government-wide directives on workspace utilization. Analyzing GSA's annual reports, budget requests, and historical contract awards would reveal patterns in investment. Periods of increased federal workforce growth or consolidation often drive demand for new facilities. Overall, GSA's capital investment in buildings represents a significant, albeit variable, component of federal real property management.

What are the implications of a firm-fixed-price contract for a project of this magnitude?

A firm-fixed-price (FFP) contract, like the one awarded here, establishes a ceiling price that the contractor must not exceed. This shifts most of the risk for cost overruns to the contractor, providing the government with significant cost certainty. It incentivizes the contractor to manage costs efficiently to maximize profit. For a large project like a federal office building, an FFP contract is often preferred to budget predictability. However, it requires a very well-defined scope of work upfront, as changes can be costly and difficult to negotiate. The government must ensure the initial scope is comprehensive to avoid extensive change orders, which could negate the cost-saving benefits of the FFP structure.

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

Solicitation ID: GS-04P-11-BV-C-0027

Offers Received: 9

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 6557 HAZELTINE NATIONAL DR STE 1, ORLANDO, FL, 32822

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

Financial Breakdown

Contract Ceiling: $159,754,654

Exercised Options: $159,754,654

Current Obligation: $159,754,654

Subaward Activity

Number of Subawards: 15

Total Subaward Amount: $78,285,227

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline