Hensel Phelps Construction Co. awarded $33.3M contract for Navy facility addition, highlighting construction sector spending

Contract Overview

Contract Amount: $33,348,863 ($33.3M)

Contractor: Hensel Phelps Construction CO

Awarding Agency: Department of Defense

Start Date: 2013-03-29

End Date: 2015-09-09

Contract Duration: 894 days

Daily Burn Rate: $37.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 21

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: IGF::OT::IGF BASE BID: P646 DSS FACILITY ADDITION

Place of Performance

Location: QUANTICO, PRINCE WILLIAM County, VIRGINIA, 22134, UNITED STATES OF AMERICA

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $33.3 million to HENSEL PHELPS CONSTRUCTION CO for work described as: IGF::OT::IGF BASE BID: P646 DSS FACILITY ADDITION Key points: 1. Contract value represents a significant investment in military infrastructure. 2. Full and open competition suggests a robust bidding process. 3. Fixed-price contract type shifts risk to the contractor. 4. Project duration of 894 days indicates a substantial construction undertaking. 5. The contract falls within the broader commercial and institutional building construction market. 6. Awarded by the Department of the Navy, it supports defense readiness.

Value Assessment

Rating: good

The contract value of $33.3 million for a facility addition appears reasonable within the context of large-scale construction projects. Benchmarking against similar Department of Defense construction contracts of comparable scope and complexity would provide a more precise value-for-money assessment. The firm fixed-price structure suggests that the contractor assumed the primary cost risk, which can be beneficial for the government if managed effectively. However, without detailed cost breakdowns or comparisons to industry standards for similar construction types, a definitive value assessment is challenging.

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 bids. The presence of 21 bids suggests a highly competitive environment for this project. A large number of bidders typically leads to more aggressive pricing and a greater likelihood of the government securing favorable terms. This level of competition is a positive indicator for price discovery and efficient use of taxpayer funds.

Taxpayer Impact: The extensive competition for this contract likely resulted in a lower final price for the government compared to a sole-source or limited competition scenario, maximizing the value of taxpayer investment.

Public Impact

The primary beneficiaries are the Department of the Navy and its personnel, who will utilize the new facility. The contract delivers essential infrastructure improvements, enhancing operational capabilities. The project's geographic impact is concentrated in Virginia, supporting local economic activity. Construction activities will likely involve a significant workforce, including skilled trades and laborers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions arise, despite fixed-price contract.
Ensuring timely completion within the 894-day timeframe is critical for operational readiness.
Quality control and adherence to specifications require diligent oversight.

Positive Signals

Firm fixed-price contract effectively transfers cost overrun risk to the contractor.
High number of bidders (21) suggests competitive pricing and contractor capability.
Award to a reputable firm like Hensel Phelps indicates a focus on experienced contractors.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a significant segment of the U.S. economy. This sector encompasses the construction of a wide range of non-residential buildings, including government facilities, educational institutions, and healthcare centers. Spending on such projects is often driven by infrastructure needs, modernization efforts, and national security requirements. Comparable spending benchmarks would involve analyzing other large-scale federal construction projects, particularly those for military installations.

Small Business Impact

The contract data indicates that small business participation was not a specific set-aside category for this award (sb: false). While the prime contractor, Hensel Phelps Construction Co., is a large entity, there may be opportunities for small businesses to participate as subcontractors. The extent of subcontracting to small businesses would depend on the prime contractor's procurement practices and the specific needs of the project. Further analysis of subcontracting plans would be necessary to assess the direct impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily be managed by the Department of the Navy's contracting and engineering departments. Accountability measures are embedded in the firm fixed-price contract terms, requiring the contractor to deliver the specified facility within the agreed-upon price and timeframe. Transparency is facilitated through contract award databases, though detailed project progress reports may not be publicly available. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Military Construction Projects
Department of Defense Facilities
Naval Base Infrastructure
Federal Building Construction

Risk Flags

Potential for unforeseen site conditions impacting fixed-price contract.
Ensuring quality control throughout the construction process.
Timely completion is critical for military operational readiness.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $33.3 million to HENSEL PHELPS CONSTRUCTION CO. IGF::OT::IGF BASE BID: P646 DSS FACILITY ADDITION

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 $33.3 million.

What is the period of performance?

Start: 2013-03-29. End: 2015-09-09.

What is Hensel Phelps Construction Co.'s track record with federal contracts, particularly with the Department of Defense?

Hensel Phelps Construction Co. has a substantial history of securing and executing federal contracts, including numerous projects for the Department of Defense and other government agencies. Their portfolio often includes large-scale, complex construction endeavors such as military bases, aviation facilities, and government buildings. Analyzing their past performance metrics, such as on-time and on-budget delivery rates, and any documented disputes or contract modifications on similar projects would provide further insight into their reliability and capability. A review of their contract history would likely reveal a pattern of successful project completion, contributing to their selection for this significant Navy facility addition.

How does the awarded amount of $33.3 million compare to the estimated cost or budget for this facility addition?

The provided data does not include the estimated cost or budget for the facility addition, making a direct comparison to the awarded amount of $33.3 million impossible. In a typical procurement process, the government establishes an independent government cost estimate (IGCE) before soliciting bids. The awarded amount is then compared against this estimate to gauge whether the competition yielded a price within expectations. Without the IGCE or a stated budget ceiling, it's difficult to definitively assess if the $33.3 million represents a value-for-money outcome relative to the government's internal projections. However, the presence of 21 bids suggests competitive pressure that likely drove the price down.

What are the key performance indicators (KPIs) used to measure the success of this construction contract?

Key performance indicators for this construction contract would likely include adherence to the project schedule (894 days), compliance with the firm fixed price of $33.3 million, and the quality of the completed facility according to specified design and construction standards. Success would also be measured by the facility's functionality and its ability to meet the operational needs of the Department of the Navy. Post-occupancy evaluations, defect liability periods, and contractor performance evaluations (e.g., CPARS) are common mechanisms to assess the contractor's performance and the overall success of the project. Safety records during construction would also be a critical KPI.

What is the historical spending pattern for similar facility additions by the Department of the Navy?

Historical spending patterns for similar facility additions by the Department of the Navy would reveal trends in contract values, project durations, and the types of construction services procured. Analyzing past contracts for naval bases and installations would provide context for the $33.3 million award. This analysis might show whether this contract is within the typical range for such projects or if it represents a significant deviation, potentially due to increased scope, market conditions, or inflation. Understanding these historical trends is crucial for budgeting, forecasting, and identifying potential anomalies in current spending.

What are the potential risks associated with a firm fixed-price contract for a large construction project like this?

While firm fixed-price contracts are generally favored for shifting cost risk to the contractor, large construction projects inherently carry risks. Potential risks include unforeseen site conditions (e.g., soil issues, hazardous materials) that could lead to significant cost increases if not adequately addressed in the contract's contingency clauses. Contractor default or bankruptcy is another risk, though less likely with established firms like Hensel Phelps. Furthermore, scope creep, if not managed through formal change order processes, can erode the benefits of the fixed price. The contractor might also cut corners on quality to maintain profitability, necessitating robust government oversight.

How does the geographic location (Virginia) influence the cost and competition for this contract?

The geographic location in Virginia can influence both the cost and competition for this contract. Virginia has a significant military presence, leading to a potentially higher demand for construction services and a robust local and regional construction market. This could mean a larger pool of qualified contractors, fostering competition. However, labor costs and material availability in a high-demand area might also be higher compared to less developed regions. Proximity to military installations can also streamline logistics and reduce transportation costs for materials and personnel, potentially offsetting some of the higher labor expenses. The specific site conditions and local regulations in Virginia would also play a role.

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: N4008012R2963

Offers Received: 21

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: $33,348,863

Exercised Options: $33,348,863

Current Obligation: $33,348,863

Contract Characteristics

Cost or Pricing Data: NO

Timeline