Hensel Phelps Construction Co. awarded $368M design/build contract for Navy facilities in Virginia

Contract Overview

Contract Amount: $368,203,362 ($368.2M)

Contractor: Hensel Phelps Construction CO

Awarding Agency: Department of Defense

Start Date: 2008-07-30

End Date: 2010-12-23

Contract Duration: 876 days

Daily Burn Rate: $420.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: P012V-DESIGN/BUILD TO COLLOCATE MILDEP

Place of Performance

Location: QUANTICO, PRINCE WILLIAM County, VIRGINIA, 22134

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $368.2 million to HENSEL PHELPS CONSTRUCTION CO for work described as: P012V-DESIGN/BUILD TO COLLOCATE MILDEP Key points: 1. Contract value of $368 million for a design/build project indicates a significant investment in infrastructure. 2. Full and open competition suggests a robust bidding process, potentially leading to competitive pricing. 3. The fixed-price contract type shifts performance risk to the contractor, incentivizing efficient project completion. 4. Project duration of 876 days (approx. 2.4 years) is typical for large-scale construction endeavors. 5. The contract falls under the Commercial and Institutional Building Construction NAICS code, a common sector for federal construction. 6. The award to a single contractor, Hensel Phelps, highlights their capacity for large, complex projects.

Value Assessment

Rating: good

The contract value of $368 million for a design/build project is substantial. Benchmarking against similar large-scale military construction projects would be necessary for a precise value-for-money assessment. However, the use of a firm-fixed-price contract generally indicates a commitment to cost control by the government, as the contractor assumes the risk of cost overruns. The number of bids received (5) suggests a reasonable level of competition, which typically correlates with more favorable pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit bids. Five bids were received, indicating a healthy level of interest and competition for this project. This competitive environment is generally favorable for price discovery and can lead to more cost-effective outcomes for the government.

Taxpayer Impact: The full and open competition process ensures that taxpayer dollars are likely being used efficiently by fostering a competitive environment that drives down costs.

Public Impact

The primary beneficiaries are the Department of the Navy, which will receive upgraded or new facilities, and the contractor, Hensel Phelps Construction Co. The project delivers design and build services for military facilities, crucial for operational readiness and personnel support. The geographic impact is concentrated in Virginia, supporting local economic activity and employment. Workforce implications include job creation for construction workers, engineers, architects, and project managers in the Virginia area.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions or design complexities arise, despite the fixed-price nature.
Delays in project completion could impact military operational readiness.
Ensuring compliance with all environmental and safety regulations throughout the construction process.

Positive Signals

Firm-fixed-price contract incentivizes contractor efficiency and cost control.
Full and open competition suggests a competitive bidding process that likely secured a fair price.
The contractor, Hensel Phelps, has a significant track record in large-scale construction projects, suggesting capability.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a significant segment of the federal construction market. Federal spending in this area supports a wide range of facilities, from administrative buildings to specialized operational structures. The total federal spending on construction services is in the tens of billions annually, with the Department of Defense being a major contributor. This contract represents a substantial investment within that broader landscape.

Small Business Impact

The data indicates this contract was not set aside for small businesses (sb: false) and there is no specific mention of small business subcontracting goals (ss: false). Therefore, the direct impact on small businesses through set-asides is likely minimal. However, the prime contractor, Hensel Phelps, may engage small businesses as subcontractors for specialized services, contributing indirectly to the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting and engineering divisions. Accountability measures are embedded in the firm-fixed-price contract terms, requiring the contractor to deliver the specified design and construction within the agreed-upon price. Transparency is generally maintained through contract award databases and reporting requirements, though detailed project-specific oversight information may not be publicly available.

Related Government Programs

Military Construction, Navy
Design-Build Contracts
Federal Building Construction
Department of Defense Facilities

Risk Flags

Potential for cost overruns despite fixed-price contract.
Risk of project delays impacting military readiness.
Ensuring adequate quality control throughout the construction process.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $368.2 million to HENSEL PHELPS CONSTRUCTION CO. P012V-DESIGN/BUILD TO COLLOCATE MILDEP

Who is the contractor on this award?

The obligated recipient is HENSEL PHELPS CONSTRUCTION CO.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $368.2 million.

What is the period of performance?

Start: 2008-07-30. End: 2010-12-23.

What is Hensel Phelps Construction Co.'s track record with large federal design-build projects?

Hensel Phelps Construction Co. is a well-established and reputable general contractor with extensive experience in large-scale federal projects, including design-build initiatives. They have a history of successfully delivering complex infrastructure and facilities for various government agencies, particularly within the Department of Defense. Their portfolio often includes military bases, aviation facilities, and other critical infrastructure. While specific project performance metrics like on-time and on-budget delivery for all past federal contracts are not detailed here, their sustained presence and award of significant contracts like this one suggest a strong capability and a generally positive performance history in meeting federal requirements.

How does the $368 million contract value compare to similar Navy design-build projects?

A contract value of $368 million for a design-build project is considered substantial, even within the context of large federal construction. The Department of the Navy undertakes numerous large-scale construction and renovation projects annually, with values often ranging from tens to hundreds of millions of dollars. Projects of this magnitude typically involve significant infrastructure development, such as new barracks, training facilities, or operational support buildings. Without specific details on the scope and complexity of this particular 'P012V-DESIGN/BUILD TO COLLOCATE MILDEP' project, a direct comparison is challenging. However, it aligns with the upper tier of federal construction awards, indicating a significant investment in military infrastructure in Virginia.

What are the primary risks associated with a firm-fixed-price design-build contract of this size?

The primary risks for a firm-fixed-price design-build contract of this magnitude ($368 million) primarily lie with the contractor, Hensel Phelps Construction Co. These include the risk of underestimating construction costs, encountering unforeseen site conditions (e.g., soil issues, hazardous materials), or facing design challenges that increase expenses. If costs exceed the fixed price, the contractor absorbs the loss. For the government, risks are generally lower but can include potential compromises in quality if the contractor seeks to cut costs to meet the fixed price, or delays if the contractor faces financial or operational difficulties. Effective government oversight is crucial to mitigate these risks and ensure project success.

How effective is full and open competition in ensuring value for money for large federal construction contracts?

Full and open competition is widely considered the most effective method for ensuring value for money in large federal construction contracts. By allowing all responsible sources to bid, it maximizes the pool of potential contractors, thereby increasing the likelihood of receiving competitive pricing. A larger number of bids, as seen with the five received for this contract, generally leads to better price discovery and can drive down costs. Furthermore, it encourages contractors to submit their most competitive proposals, knowing they are competing against a broad range of firms. While the lowest bid doesn't always guarantee the best value (other factors like technical approach and past performance are considered), the competitive pressure inherent in this procurement method is a strong driver for cost efficiency and taxpayer savings.

What are the historical spending patterns for similar military facility construction contracts in Virginia?

Historical spending patterns for similar military facility construction contracts in Virginia are substantial, reflecting the state's significant military presence. The Department of Defense, particularly the Navy and Marine Corps, consistently invests heavily in infrastructure within Virginia. Annual spending on military construction projects in the state often runs into hundreds of millions, if not billions, of dollars, encompassing new construction, renovations, and upgrades to barracks, training grounds, research facilities, and operational support buildings. Contracts awarded under 'full and open competition' for design-build services are common, with values frequently ranging from tens to hundreds of millions, similar to the $368 million awarded here. This indicates a consistent demand and significant budget allocation for maintaining and modernizing military infrastructure in the region.

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: N4008007R0011

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 4437 BROOKFIELD CORP DR, CHANTILLY, VA, 90

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

Financial Breakdown

Contract Ceiling: $368,203,362

Exercised Options: $368,203,362

Current Obligation: $368,203,362

Contract Characteristics

Cost or Pricing Data: NO

Timeline