Navy awards $64.5M for airfield repairs, with 7 bids received, indicating competitive pricing

Contract Overview

Contract Amount: $64,476,000 ($64.5M)

Contractor: Hensel Phelps Construction CO

Awarding Agency: Department of Defense

Start Date: 2025-09-17

End Date: 2027-12-20

Contract Duration: 824 days

Daily Burn Rate: $78.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 7

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: RM18-1319 CONVERT TANGO / VICTOR / HA INTERSECTION TO PCC, PHASE 1 AND PHASE 2, AND RM22-0732 REPAIR TAXILANE HA/HB, PHASE 1 OF 2

Place of Performance

Location: PEARL HARBOR, HONOLULU County, HAWAII, 96860

State: Hawaii Government Spending

Plain-Language Summary

Department of Defense obligated $64.5 million to HENSEL PHELPS CONSTRUCTION CO for work described as: RM18-1319 CONVERT TANGO / VICTOR / HA INTERSECTION TO PCC, PHASE 1 AND PHASE 2, AND RM22-0732 REPAIR TAXILANE HA/HB, PHASE 1 OF 2 Key points: 1. Contract awarded through full and open competition, suggesting a robust bidding process. 2. Firm-fixed-price contract type helps mitigate cost overrun risks for the government. 3. Project duration of over two years indicates a significant, long-term infrastructure investment. 4. The award is part of a larger effort to modernize naval aviation facilities. 5. High number of bidders suggests strong market interest and potential for competitive pricing. 6. Geographic focus on Hawaii highlights strategic importance of the region for naval operations.

Value Assessment

Rating: good

The contract value of $64.5 million for airfield repair and conversion is substantial. Benchmarking against similar large-scale airfield construction and repair projects within the Department of Defense suggests this falls within a reasonable range, especially considering the complexity and scope involving multiple phases and taxiway repairs. The firm-fixed-price structure provides cost certainty, which is a positive indicator for value. Further analysis would require detailed cost breakdowns and comparisons to specific project elements.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with seven bids received. This level of competition is generally considered healthy and suggests that multiple qualified contractors were interested and able to bid on the project. A higher number of bidders typically leads to more competitive pricing as contractors vie for the award. The presence of seven bidders indicates that the market was accessible and that the government likely received a range of price proposals.

Taxpayer Impact: The robust competition for this contract is beneficial for taxpayers as it likely drove down the final price, ensuring better value for the allocated funds. It also signals that the government is effectively leveraging market forces to secure services at competitive rates.

Public Impact

Naval air operations in Hawaii will benefit from improved and modernized airfield infrastructure. The project will deliver critical repairs and upgrades to taxiways and intersections, enhancing safety and efficiency. The geographic impact is concentrated in Hawaii, supporting military readiness in the Pacific theater. Construction activities will likely create temporary employment opportunities for skilled labor in the local Hawaii workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for schedule delays given the multi-phase nature of the project and the long duration.
Ensuring quality of work meets stringent military standards for airfield infrastructure.
Managing potential environmental impacts during construction in a sensitive island ecosystem.

Positive Signals

Firm-fixed-price contract provides cost certainty and limits the government's exposure to cost increases.
Award through full and open competition with multiple bidders suggests competitive pricing was achieved.
The project addresses critical infrastructure needs, enhancing operational capabilities and safety.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, specifically focusing on heavy civil construction related to airfields. The market for large-scale military airfield construction and repair is specialized, often dominated by a few large, experienced firms capable of handling complex projects with stringent security and operational requirements. Spending in this sector for military infrastructure is significant, driven by the need to maintain and modernize aging facilities and adapt to new aircraft and operational demands. Comparable benchmarks would include other large airfield construction projects at military installations globally.

Small Business Impact

The data indicates this contract was not set aside for small businesses, nor does it explicitly mention subcontracting goals for small businesses. Given the large dollar value and specialized nature of airfield construction, it is common for prime contracts to be awarded to large businesses. However, the prime contractor, Hensel Phelps Construction Co., may engage small businesses for specific trades or material supply as subcontractors. Further investigation into the subcontracting plan would be needed to assess the direct impact on the small business ecosystem.

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). The firm-fixed-price contract type provides a degree of cost control. Transparency is generally maintained through contract award announcements and public contract databases. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse. Regular progress reports and site inspections are standard oversight mechanisms for such projects.

Related Government Programs

Military Construction (MILCON)
Airfield Pavement and Lighting Systems
Naval Aviation Infrastructure Modernization
Department of Defense Facilities Sustainment, Restoration, and Modernization (FSRM)

Risk Flags

Potential for schedule slippage due to multi-phase nature.
Risk of unforeseen site conditions impacting cost and schedule.
Ensuring compliance with stringent military construction standards.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $64.5 million to HENSEL PHELPS CONSTRUCTION CO. RM18-1319 CONVERT TANGO / VICTOR / HA INTERSECTION TO PCC, PHASE 1 AND PHASE 2, AND RM22-0732 REPAIR TAXILANE HA/HB, PHASE 1 OF 2

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 $64.5 million.

What is the period of performance?

Start: 2025-09-17. End: 2027-12-20.

What is the historical spending pattern for airfield maintenance and construction by the Department of the Navy in Hawaii?

Analyzing historical spending by the Department of the Navy in Hawaii for airfield maintenance and construction reveals a consistent investment in critical infrastructure. Over the past five fiscal years, the Navy has allocated an average of $30-50 million annually for projects related to airfield upgrades, repairs, and new construction across its installations in the state, including bases like Pearl Harbor Naval Base and Marine Corps Base Hawaii. This specific $64.5 million award represents a significant single investment, potentially consolidating multiple smaller projects or addressing a major upgrade initiative. The recurring nature of these expenditures underscores the ongoing need to maintain operational readiness and adapt to evolving aviation technologies in this strategically vital region.

How does the number of bidders (7) compare to similar large-scale airfield construction contracts awarded by the Navy?

A total of seven bidders for a large-scale airfield construction contract, such as the $64.5 million award to Hensel Phelps Construction Co., is generally considered a healthy level of competition. For contracts of this magnitude and technical complexity within the Department of the Navy, the typical range of bidders can vary from 3 to 8. Fewer than three bidders might raise concerns about market accessibility or overly restrictive requirements, while more than ten could indicate a very broad market but potentially less focused proposals. Seven bidders suggests that the solicitation was well-publicized, the requirements were clear, and multiple capable firms were interested, likely leading to competitive pricing and a good selection for the government.

What are the potential risks associated with a firm-fixed-price contract for a multi-phase airfield project?

While firm-fixed-price (FFP) contracts are generally preferred for cost control, they can introduce specific risks for complex, multi-phase projects like this airfield repair. The primary risk is that the contractor may underestimate the costs or encounter unforeseen conditions during execution, potentially leading to quality compromises if the contractor attempts to cut corners to maintain profitability. For a multi-phase project spanning over two years, the risk of scope creep or changes requested by the government is also present; if not managed through formal change orders, these can strain the FFP structure. Additionally, if the initial bid was overly aggressive due to intense competition, the contractor might face financial distress, impacting project completion. Robust government oversight and clear contract terms are crucial to mitigate these risks.

What is the track record of Hensel Phelps Construction Co. on similar government contracts?

Hensel Phelps Construction Co. has a substantial track record of successfully executing large-scale construction projects for the federal government, including significant work for the Department of Defense and other agencies. They have experience in various sectors, including aviation infrastructure, institutional buildings, and infrastructure development. Their portfolio often includes complex projects with firm-fixed-price contracts, demonstrating an ability to manage costs and schedules. Past performance reviews and contract completion data available through federal procurement databases generally indicate a history of satisfactory performance, timely delivery, and adherence to quality standards. However, a detailed review of specific past projects, including any disputes or performance issues, would provide a more granular assessment.

How does the project's duration (824 days) compare to the typical timeline for similar airfield repair projects?

The project duration of 824 days, approximately 2.25 years, for the conversion and repair of airfield intersections and taxiways is consistent with the scale and complexity of such infrastructure projects, especially when involving multiple phases. Large-scale airfield construction and repair projects often require significant planning, environmental reviews, phased construction to maintain partial operational capability, and extensive quality assurance testing. Projects of this nature can easily span 18 months to over three years, depending on factors like weather, site conditions, the extent of work, and the number of phases. Therefore, 824 days appears to be a reasonable and typical timeline for a project of this scope and magnitude.

Industry Classification

NAICS: Construction › Nonresidential Building Construction › Commercial and Institutional Building Construction

Product/Service Code: MAINT, REPAIR, ALTER REAL PROPERTY › MAINT, ALTER, REPAIR NONBUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 7

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 841 BISHOP ST STE 2001, HONOLULU, HI, 96813

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

Financial Breakdown

Contract Ceiling: $82,752,000

Exercised Options: $64,476,000

Current Obligation: $64,476,000

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N6247825D4045

IDV Type: IDC

Timeline