DoD awards $94M MACC for ambulatory care center addition-alteration to Hensel Phelps Construction Co

Contract Overview

Contract Amount: $93,966,973 ($94.0M)

Contractor: Hensel Phelps Construction CO

Awarding Agency: Department of Defense

Start Date: 2024-09-17

End Date: 2028-03-29

Contract Duration: 1,289 days

Daily Burn Rate: $72.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: DBB CONSTRUCTION MACC TO P3800 AMBULATORY CARE CENTER ADDITION-ALTERATION

Place of Performance

Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92145

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $94.0 million to HENSEL PHELPS CONSTRUCTION CO for work described as: DBB CONSTRUCTION MACC TO P3800 AMBULATORY CARE CENTER ADDITION-ALTERATION Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract is a firm-fixed-price delivery order, providing cost certainty for the government. 3. The project duration of approximately 4.3 years indicates a significant, long-term construction effort. 4. The contract is for commercial and institutional building construction, a common sector for federal spending. 5. The award is for an addition-alteration to an ambulatory care center, implying facility modernization or expansion. 6. The contractor, Hensel Phelps Construction Co., is a large, established entity in the construction industry.

Value Assessment

Rating: good

The contract value of $93,966,973 for a large-scale construction project like an ambulatory care center addition-alteration appears reasonable within the context of federal building projects. Benchmarking against similar MACC (Multiple Award Construction Contract) vehicles or large-scale healthcare facility construction would provide a more precise value-for-money assessment. The firm-fixed-price nature of the contract helps manage cost risks for the government.

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 data does not specify the number of bids received, but the 'full and open' designation suggests a robust competitive environment. This approach is generally expected to yield competitive pricing and a wider range of potential contractors.

Taxpayer Impact: Full and open competition is favorable for taxpayers as it maximizes the potential for cost savings through a broad bidding process, encouraging contractors to offer their best pricing to secure the work.

Public Impact

The primary beneficiaries are military personnel and their families receiving healthcare services at the facility. The project will deliver expanded and/or improved ambulatory care services through facility upgrades. The geographic impact is localized to the specific military installation in California where the center is located. The construction effort will likely involve a significant workforce, including skilled trades and project management personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen construction challenges arise, despite the firm-fixed-price structure.
Delays in construction could impact the timely delivery of enhanced healthcare services.
Dependence on a single large contractor for a multi-year project introduces execution risk.

Positive Signals

Award to an experienced contractor like Hensel Phelps suggests a higher likelihood of successful project execution.
Firm-fixed-price contract provides budget certainty for the government.
Full and open competition indicates a potentially competitive pricing environment.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a significant segment of the federal contracting landscape. The Department of Defense, particularly the Navy, frequently engages in construction projects to maintain and upgrade its facilities, including healthcare infrastructure. Spending in this sector is driven by the need for new construction, renovations, and maintenance across numerous government installations. Comparable spending benchmarks would involve analyzing other large-scale construction contracts awarded by DoD or other federal agencies for similar facility types.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (sb: false) and does not explicitly mention subcontracting goals for small businesses. Therefore, the direct impact on small business set-asides appears minimal. However, large prime contractors like Hensel Phelps often utilize small businesses for specialized subcontracting work, which could provide opportunities within the broader ecosystem, though this is not guaranteed by the contract terms provided.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Navy's contracting and engineering divisions, with potential involvement from the Naval Facilities Engineering Command (NAVFAC). Accountability measures are embedded in the firm-fixed-price contract terms, performance specifications, and delivery schedules. Transparency is generally provided through federal contract databases like FPDS. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Department of Defense Military Construction
Naval Facilities and Engineering Command Contracts
Ambulatory Care Facility Construction
Federal Building and Infrastructure Projects

Risk Flags

Potential for construction delays
Risk of unforeseen site conditions
Cost escalation risk for contractor
Integration challenges with existing facility

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $94.0 million to HENSEL PHELPS CONSTRUCTION CO. DBB CONSTRUCTION MACC TO P3800 AMBULATORY CARE CENTER ADDITION-ALTERATION

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 $94.0 million.

What is the period of performance?

Start: 2024-09-17. End: 2028-03-29.

What is Hensel Phelps Construction Co.'s track record with the Department of the Navy and similar healthcare construction projects?

Hensel Phelps Construction Co. is a large, well-established general contractor with extensive experience in various construction sectors, including federal projects and healthcare facilities. While specific details on their past performance with the Department of the Navy or for ambulatory care centers are not provided in this data snippet, their general profile suggests a capacity for undertaking complex projects. A deeper dive into their contract history with the Navy, including past performance evaluations and any disputes or claims, would be necessary for a comprehensive assessment. Their portfolio often includes large-scale institutional and public works projects, indicating familiarity with government contracting requirements and standards.

How does the awarded amount of $93.97 million compare to similar ambulatory care center construction projects by the federal government?

Benchmarking this $93.97 million contract requires comparing it to similar federal ambulatory care center construction projects, considering factors like size (square footage), complexity, location, and specific requirements (e.g., advanced medical equipment integration). Without specific project details, a direct comparison is difficult. However, large-scale healthcare facility construction, especially for government entities, can range from tens of millions to hundreds of millions of dollars. The firm-fixed-price nature of this award suggests a defined scope, which aids in cost control. Further analysis would involve identifying comparable projects awarded by agencies like the Department of Veterans Affairs or other branches of the DoD over the past few years.

What are the primary risk indicators associated with this specific contract award?

Key risk indicators for this contract include the inherent complexities of large-scale construction projects, such as potential for unforeseen site conditions, material cost fluctuations (though mitigated by FFP), and labor availability. The project's duration of over four years also increases the risk of schedule delays and potential scope creep if not managed meticulously. Given it's an addition-alteration, integrating new construction with existing facilities can present unique challenges. The reliance on a single prime contractor for such a substantial project also concentrates execution risk. However, the award to an experienced contractor and the firm-fixed-price structure are mitigating factors.

How effective is the 'full and open competition' strategy likely to be in ensuring value for money for this project?

The 'full and open competition' strategy is generally considered the most effective method for ensuring value for money in federal contracting. By allowing all responsible sources to bid, it fosters a competitive environment that pressures contractors to offer their most competitive pricing and innovative solutions. For a project of this magnitude ($93.97 million), a broad competition increases the likelihood that the government will receive multiple proposals, allowing for a thorough evaluation of technical merit and cost. This approach minimizes the risk of paying an inflated price and maximizes the potential for selecting a contractor that offers the best overall value, balancing cost, performance, and schedule.

What are the historical spending patterns for ambulatory care center construction within the Department of Defense?

Historical spending patterns for ambulatory care center construction within the Department of Defense (DoD) show a consistent need for facility upgrades and expansions to support military readiness and personnel well-being. The DoD invests significantly in its healthcare infrastructure, which includes hospitals, clinics, and specialized centers like this one. Spending in this area is influenced by factors such as aging facilities, evolving medical technologies, and the need to provide state-of-the-art care to service members and their families. While specific aggregate spending figures for ambulatory care centers alone are not readily available without detailed analysis of construction contract categories, the overall military construction budget reflects ongoing investment in healthcare facilities.

What are the potential implications of the firm-fixed-price (FFP) contract type on project cost and contractor performance?

The firm-fixed-price (FFP) contract type places the majority of the cost risk on the contractor, Hensel Phelps Construction Co. This means the contractor is obligated to complete the work for the agreed-upon price, regardless of unforeseen cost increases. This structure provides significant cost certainty for the Department of the Navy and incentivizes the contractor to manage costs efficiently and control project scope. However, it can also lead contractors to build in larger contingencies, potentially increasing the initial price compared to other contract types. For the contractor, performance is critical, as exceeding the budget directly impacts their profit margin. This contract type is generally preferred for projects with well-defined scopes and minimal anticipated changes.

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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N6247321R1411

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 18850 VON KARMAN AVE STE 100, IRVINE, CA, 92612

Business Categories: Category Business, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $93,966,973

Exercised Options: $93,966,973

Current Obligation: $93,966,973

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N6247322D1405

IDV Type: IDC

Timeline