DoD's $63M Corrosion Control Hangar Contract Awarded to Hensel Phelps Faces Scrutiny
Contract Overview
Contract Amount: $63,121,043 ($63.1M)
Contractor: Hensel Phelps Construction CO
Awarding Agency: Department of Defense
Start Date: 2019-05-31
End Date: 2022-09-27
Contract Duration: 1,215 days
Daily Burn Rate: $52.0K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 5
Pricing Type: FIRM FIXED PRICE
Sector: Construction
Official Description: IGF::OT::IGF FY19 MCON P-946 CORROSION CONTROL HANGAR (CCH)&PARKING FACILITY, MARINE CORPS BASE HAWAII, KANEOHE, HAWAII
Place of Performance
Location: M C B H KANEOHE BAY, HONOLULU County, HAWAII, 96863
State: Hawaii Government Spending
Plain-Language Summary
Department of Defense obligated $63.1 million to HENSEL PHELPS CONSTRUCTION CO for work described as: IGF::OT::IGF FY19 MCON P-946 CORROSION CONTROL HANGAR (CCH)&PARKING FACILITY, MARINE CORPS BASE HAWAII, KANEOHE, HAWAII Key points: 1. The contract awarded to Hensel Phelps Construction Co. for the Corrosion Control Hangar at Marine Corps Base Hawaii is a significant investment. 2. Competition was full and open, suggesting a potentially competitive bidding process. 3. The project's duration of 1215 days indicates a complex and lengthy construction undertaking. 4. The absence of small business participation warrants further investigation into contracting opportunities.
Value Assessment
Rating: fair
The contract value of $63.1 million for a large-scale construction project like a hangar is within a typical range for similar government contracts. However, without specific cost breakdowns or benchmarks for hangar construction, a precise value assessment is difficult.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which generally promotes competitive pricing. The definitive contract type suggests a clear scope of work, but the final price could be influenced by change orders over the project's extended duration.
Taxpayer Impact: Taxpayer funds are being utilized for a critical military infrastructure project. While competition aims for efficiency, the total cost over the project's lifecycle will determine the ultimate taxpayer impact.
Public Impact
Enhances military readiness by providing specialized facilities for aircraft maintenance. Supports local economy through construction jobs and related services in Hawaii. Potential for long-term operational cost savings due to improved corrosion control measures.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of small business participation
- Extended contract duration (1215 days)
- Potential for cost overruns with fixed-price contracts over long periods
Positive Signals
- Full and open competition
- Critical infrastructure development
- Definitive contract type
Sector Analysis
This contract falls within the Commercial and Institutional Building Construction sector. Spending in this sector for the Department of Defense is substantial, driven by the need for modern and resilient infrastructure to support military operations globally.
Small Business Impact
The data indicates no small business participation in this contract. This is a concern as it suggests missed opportunities to support small businesses and potentially limits the diversity of contractors involved in large federal projects.
Oversight & Accountability
Oversight will be crucial throughout the 1215-day duration to ensure the project stays on schedule and within budget. The Department of the Navy's contracting officers and potentially the Inspector General will monitor performance and compliance.
Related Government Programs
- Commercial and Institutional Building Construction
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Lack of small business involvement
- Extended contract duration increases risk of cost escalation
- Potential for scope creep and change orders
- Limited transparency on specific cost drivers
Tags
commercial-and-institutional-building-co, department-of-defense, hi, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $63.1 million to HENSEL PHELPS CONSTRUCTION CO. IGF::OT::IGF FY19 MCON P-946 CORROSION CONTROL HANGAR (CCH)&PARKING FACILITY, MARINE CORPS BASE HAWAII, KANEOHE, HAWAII
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 $63.1 million.
What is the period of performance?
Start: 2019-05-31. End: 2022-09-27.
What specific factors contributed to the lack of small business participation in this large-scale construction contract?
The absence of small business participation could stem from several factors. The project's complexity and scale may have required specialized expertise or bonding capacity that larger firms are better equipped to handle. Additionally, the bidding process itself might have inadvertently excluded smaller entities, or there may have been insufficient outreach to the small business community regarding subcontracting opportunities.
How will the fixed-price contract structure mitigate risks associated with the project's extended duration?
A firm fixed-price contract aims to transfer risk to the contractor, providing cost certainty for the government. However, with a duration of 1215 days, there's an inherent risk of unforeseen economic fluctuations (e.g., material costs, labor rates) that could strain the contractor. Effective contract management and clear scope definition are essential to prevent costly change orders that could negate the benefits of the fixed-price structure.
What are the projected long-term benefits of this Corrosion Control Hangar in terms of operational efficiency and cost savings for the Marine Corps?
The primary long-term benefit is expected to be enhanced aircraft readiness and reduced maintenance costs through effective corrosion prevention. By housing aircraft in a controlled environment designed for corrosion mitigation, the lifespan of valuable assets can be extended, and the frequency and cost of repairs associated with environmental damage can be significantly lowered.
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: N6274219R1303
Offers Received: 5
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: $63,121,043
Exercised Options: $63,121,043
Current Obligation: $63,121,043
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2019-05-31
Current End Date: 2022-09-27
Potential End Date: 2022-09-27 00:00:00
Last Modified: 2023-03-20
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