Navy's $64.8M Corpus Christi facility contract awarded to Hensel Phelps Construction Co. for building construction

Contract Overview

Contract Amount: $64,799,715 ($64.8M)

Contractor: Hensel Phelps Construction CO.

Awarding Agency: Department of Defense

Start Date: 2017-09-29

End Date: 2020-05-08

Contract Duration: 952 days

Daily Burn Rate: $68.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: IGF::OT::IGF P-026, POWERTRAIN FACILITY AND CENTRAL ENERGY PLANT, NAS CORPUS CHRISTI, TX

Place of Performance

Location: CORPUS CHRISTI, NUECES County, TEXAS, 78419

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $64.8 million to HENSEL PHELPS CONSTRUCTION CO. for work described as: IGF::OT::IGF P-026, POWERTRAIN FACILITY AND CENTRAL ENERGY PLANT, NAS CORPUS CHRISTI, TX Key points: 1. Contract value represents a significant investment in naval infrastructure. 2. The award was made under full and open competition, suggesting a competitive bidding process. 3. The firm-fixed-price contract type aims to control costs for the government. 4. The project duration of 952 days indicates a substantial construction undertaking. 5. The contract was awarded by the Department of the Navy, a major defense spender. 6. The North American Industry Classification System (NAICS) code 236220 points to commercial and institutional building construction.

Value Assessment

Rating: good

The contract's value of $64.8 million for a powertrain facility and central energy plant appears reasonable for a project of this scale and complexity. Benchmarking against similar large-scale construction projects for military bases would provide a more precise value-for-money assessment. The firm-fixed-price structure suggests an effort to lock in costs, which is generally favorable for the government, assuming the initial bid was competitive.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. With two bids received (as suggested by 'no': 2), the competition level was present but could be considered moderate. This level of competition generally supports price discovery, but a higher number of bidders might have led to even more aggressive pricing.

Taxpayer Impact: Full and open competition, even with a limited number of bidders, is beneficial for taxpayers as it encourages multiple firms to offer their best pricing and terms, potentially leading to cost savings compared to sole-source or limited competition scenarios.

Public Impact

The primary beneficiaries are the Department of the Navy and its personnel at NAS Corpus Christi, who will gain access to improved and potentially more efficient powertrain and energy facilities. The services delivered include the construction of a new powertrain facility and a central energy plant, crucial for base operations and maintenance. The geographic impact is localized to Naval Air Station Corpus Christi, Texas, enhancing its operational capabilities. The project likely created numerous jobs in the construction sector within the Corpus Christi region, providing employment opportunities for skilled and unskilled labor.

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.
Dependence on the contractor's ability to manage the complex construction schedule effectively.
Risk of delays impacting the operational readiness of the facility if the project timeline is not met.

Positive Signals

Awarded under full and open competition, suggesting a competitive pricing environment.
Firm-fixed-price contract type helps mitigate cost escalation risks for the government.
The contractor, Hensel Phelps Construction Co., is a well-established entity in the construction industry, implying a degree of reliability.
The project addresses critical infrastructure needs for a naval installation.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a significant segment of the broader construction industry. The market for large-scale government construction projects, particularly for defense installations, is substantial, driven by the need for modern, secure, and efficient facilities. Comparable spending benchmarks would involve analyzing other major military base construction or renovation projects, which often run into tens or hundreds of millions of dollars depending on scope and location.

Small Business Impact

The data indicates that this contract was not set aside for small businesses ('sb': false) and there is no explicit mention of subcontracting goals for small businesses. Therefore, the direct impact on small business set-asides appears minimal. However, the prime contractor, Hensel Phelps, may engage small businesses as subcontractors, contributing indirectly to the small business ecosystem. Further analysis of subcontracting plans would be needed to fully assess the impact.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the contracting officer's representative (COR) within the Department of the Navy. Accountability measures are embedded in the firm-fixed-price contract terms, requiring delivery of the specified facility. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Naval Base Infrastructure Projects
Military Construction (MILCON)
Energy Infrastructure Contracts
Department of Defense Facilities Management

Risk Flags

Moderate competition level (2 bidders)
Potential for unforeseen site conditions impacting cost and schedule
Dependence on contractor's schedule management capabilities

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $64.8 million to HENSEL PHELPS CONSTRUCTION CO.. IGF::OT::IGF P-026, POWERTRAIN FACILITY AND CENTRAL ENERGY PLANT, NAS CORPUS CHRISTI, TX

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 $64.8 million.

What is the period of performance?

Start: 2017-09-29. End: 2020-05-08.

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

Hensel Phelps Construction Co. has a significant history of performing large-scale construction projects for the federal government, including numerous contracts with the Department of Defense and other agencies. Their portfolio often includes complex facilities such as hospitals, courthouses, and aviation-related structures. While specific performance metrics for past contracts are not detailed here, their longevity and repeated awards suggest a generally positive track record. A deeper dive into past performance evaluations, such as those available through the Contractor Performance Assessment Reporting System (CPARS), would provide more granular insights into their reliability, quality of work, and adherence to schedule and budget on previous federal projects.

How does the awarded price compare to similar construction projects for naval facilities?

Benchmarking the $64.8 million award for the powertrain facility and central energy plant requires comparison with similar-sized projects at other naval installations. Factors such as geographic location, specific facility requirements (e.g., advanced technology integration, environmental controls), and prevailing construction costs at the time of award significantly influence pricing. Without access to a database of comparable projects with detailed cost breakdowns, a precise comparison is difficult. However, large-scale infrastructure projects for military bases often range from tens to hundreds of millions of dollars, making this contract appear within a plausible range for its stated purpose and scale.

What are the primary risks associated with this type of construction contract?

The primary risks associated with this firm-fixed-price construction contract include potential cost overruns due to unforeseen site conditions (e.g., soil issues, hazardous materials), design changes requested by the government, or contractor performance issues leading to delays and increased costs. Schedule risk is also significant, as delays can impact the operational readiness of the naval base. Furthermore, the quality of construction must meet stringent military standards, posing a risk if not adequately managed. The firm-fixed-price nature shifts much of the cost risk to the contractor, but significant overruns could still impact the government through change orders or claims if not managed proactively.

How effective is the firm-fixed-price contract type in controlling costs for this project?

The firm-fixed-price (FFP) contract type is generally considered effective in controlling costs for projects where the scope of work is well-defined and risks are manageable. For this construction project, the FFP structure incentivizes the contractor, Hensel Phelps Construction Co., to manage its costs efficiently to maximize profit. It sets a ceiling on the government's financial liability, preventing cost escalation due to contractor inefficiencies. However, its effectiveness can be diminished if unforeseen issues necessitate significant change orders, which can add costs and complexity. Robust government oversight and clear contract specifications are crucial to ensure the FFP structure achieves its cost-control objectives.

What is the historical spending pattern for similar infrastructure projects at NAS Corpus Christi?

Analyzing historical spending patterns for similar infrastructure projects at NAS Corpus Christi would require access to detailed contract databases and budget information specific to the base. Without this granular data, it's challenging to provide a precise historical context. Generally, naval installations undergo periodic upgrades and expansions to maintain operational readiness and modernize facilities. Spending on projects like powertrain facilities and energy plants can be cyclical, influenced by military readiness requirements, technological advancements, and available appropriations. A review of past defense spending allocations and awarded contracts for NAS Corpus Christi over the last decade would reveal trends in infrastructure investment.

What are the implications of awarding a contract of this size under full and open competition?

Awarding a contract of this magnitude ($64.8 million) under full and open competition has several implications. It signals the government's commitment to maximizing competition and achieving the best possible value for taxpayers by allowing any qualified firm to bid. This process typically leads to a wider range of innovative solutions and competitive pricing. However, managing a full and open competition for a large project can be resource-intensive for the procuring agency, requiring thorough solicitation development, evaluation, and award processes. The presence of only two bidders, as indicated, suggests that while competition was present, the market for firms capable of undertaking such a large and specialized project might be limited.

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: N6945017R0502

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Hensel Phelps Construction CO

Address: 8326 CROSS PARK DR, AUSTIN, TX, 78754

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

Financial Breakdown

Contract Ceiling: $66,496,715

Exercised Options: $64,799,715

Current Obligation: $64,799,715

Subaward Activity

Number of Subawards: 52

Total Subaward Amount: $61,239,694

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline