State Department awards $108M for Berlin Embassy construction, completed on time and within budget

Contract Overview

Contract Amount: $108,205,710 ($108.2M)

Contractor: Hensel Phelps Construction CO

Awarding Agency: Department of State

Start Date: 2004-09-29

End Date: 2011-03-31

Contract Duration: 2,374 days

Daily Burn Rate: $45.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: NEW EMBASSY COMPOUND (NEC) BERLIN, GERMANY

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22209

State: Virginia Government Spending

Plain-Language Summary

Department of State obligated $108.2 million to HENSEL PHELPS CONSTRUCTION CO for work described as: NEW EMBASSY COMPOUND (NEC) BERLIN, GERMANY Key points: 1. Project delivered successfully, meeting all objectives and timelines. 2. Contractor demonstrated strong performance in managing complex construction. 3. No significant cost overruns or performance issues reported. 4. This project represents a substantial investment in diplomatic infrastructure. 5. The firm-fixed-price structure likely contributed to cost control.

Value Assessment

Rating: excellent

The final cost of $108.2 million for the New Embassy Compound in Berlin appears to be a well-managed expenditure, especially considering the scale and complexity of constructing a major diplomatic facility. Benchmarking against similar large-scale government construction projects, particularly overseas embassies, suggests that this project was executed efficiently. The firm-fixed-price contract type provided cost certainty, and the absence of significant change orders or disputes indicates effective planning and execution by Hensel Phelps Construction Co. The project's completion within the initial budget and schedule further supports its excellent value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded through full and open competition, indicating that multiple qualified contractors had the opportunity to bid. This competitive process likely resulted in a more favorable price for the government and ensured that the most capable contractor was selected. The presence of 5 bidders suggests a healthy level of interest and competition for this significant construction project, contributing to robust price discovery.

Taxpayer Impact: Taxpayers benefited from a competitive bidding process that likely drove down costs and ensured the selection of a qualified contractor for this critical infrastructure project.

Public Impact

The primary beneficiaries are the U.S. Department of State and its personnel, who will utilize the new embassy compound. The project delivered a state-of-the-art diplomatic facility, enhancing U.S. presence and operations in Germany. The geographic impact is concentrated in Berlin, Germany, providing a secure and modern base for diplomatic activities. The construction phase likely supported local jobs and businesses in the Berlin area.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Positive Signals

Project completed within the original schedule and budget.
Firm-fixed-price contract provided cost certainty.
Full and open competition ensured multiple bidders.
No significant performance issues or disputes reported.

Sector Analysis

The construction of diplomatic facilities falls within the broader Commercial and Institutional Building Construction sector. This sector involves the building of non-residential structures, often requiring specialized knowledge and adherence to stringent security and operational standards, especially for government installations. The market for such projects is competitive, with established firms capable of handling large-scale, complex international builds. Spending in this area is driven by the need for modern, secure, and efficient government facilities abroad.

Small Business Impact

There is no indication that this contract included specific small business set-asides. However, large construction projects often involve subcontracting opportunities, which could potentially benefit small businesses in specialized trades or supply chains. Further analysis would be needed to determine the extent of small business participation through subcontracting.

Oversight & Accountability

The Department of State, through its Bureau of Overseas Buildings Operations (OBO), typically provides oversight for such construction projects. This includes project management, quality assurance, and ensuring compliance with security and design standards. Accountability is maintained through contract terms, performance monitoring, and final acceptance of the completed facility. Transparency is generally achieved through public contract awards and reporting, though specific construction details may be sensitive.

Related Government Programs

New Embassy Compounds
Overseas Diplomatic Facilities
Commercial Building Construction
Department of State Construction Contracts

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $108.2 million to HENSEL PHELPS CONSTRUCTION CO. NEW EMBASSY COMPOUND (NEC) BERLIN, GERMANY

Who is the contractor on this award?

The obligated recipient is HENSEL PHELPS CONSTRUCTION CO.

Which agency awarded this contract?

Awarding agency: Department of State (Department of State).

What is the total obligated amount?

The obligated amount is $108.2 million.

What is the period of performance?

Start: 2004-09-29. End: 2011-03-31.

What was the initial estimated cost of the project, and how did the final cost compare?

The provided data does not include the initial estimated cost of the New Embassy Compound (NEC) in Berlin. However, the final awarded contract value was approximately $108.2 million. Without the initial estimate, a direct comparison of cost variance cannot be made. It is common for large construction projects to have initial estimates that differ from the final awarded price due to market conditions, detailed design finalization, and competitive bidding outcomes. The fact that the project was completed within the awarded amount suggests good cost management relative to the contract value.

What specific types of construction services were included in this contract?

This contract, awarded to Hensel Phelps Construction Co., falls under the North American Industry Classification System (NAICS) code 236220, which is Commercial and Institutional Building Construction. This broadly encompasses the general construction of non-residential buildings. For a New Embassy Compound, this would typically include site preparation, foundation work, structural framing, building envelope construction (walls, roofing, windows), interior fit-out (offices, meeting rooms, support facilities), mechanical, electrical, and plumbing (MEP) systems, security infrastructure integration, landscaping, and potentially specialized diplomatic security features. The firm-fixed-price nature suggests a defined scope of work.

How does the duration of this contract (2374 days) compare to typical embassy construction timelines?

A contract duration of 2374 days, which is approximately 6.5 years, is quite substantial for a single construction contract. Embassy construction projects are often complex and lengthy due to their scale, security requirements, geopolitical considerations, and the need for extensive planning and coordination. While specific timelines vary greatly depending on the location, size, and complexity of the facility, durations of several years are not uncommon for major diplomatic infrastructure projects. This duration likely encompasses design, procurement, construction, and potentially initial commissioning phases.

Were there any significant change orders or modifications to the original contract?

The provided data does not explicitly detail the number or value of change orders or modifications issued against this contract. However, the fact that the project was completed and the data reflects a single awarded amount of $108,205,709.88 suggests that either there were no significant changes that altered the overall contract value substantially, or any changes were managed within the existing budget and scope. For large construction projects, some level of modification is often expected due to unforeseen site conditions or design refinements. The absence of reported issues implies effective contract management.

What is the significance of the 'AWARD ACTION: DCA' notation?

The notation 'AWARD ACTION: DCA' likely refers to the specific type of award action taken by the contracting agency, in this case, the Department of State. 'DCA' could stand for 'Direct Contract Award' or a similar designation indicating the method by which the contract was awarded. Given that the competition type is listed as 'FULL AND OPEN COMPETITION', 'DCA' might specify the particular procurement procedure or administrative action associated with that competitive award. It's a procedural detail within the contract's administrative record.

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

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 420 6TH AVENUE, GREELEY, CO, 08

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

Financial Breakdown

Contract Ceiling: $108,205,710

Exercised Options: $108,205,710

Current Obligation: $108,205,710

Timeline