Hensel Phelps Construction awarded $79.5M contract for Integrated Capabilities Office Headquarters by Department of Defense

Contract Overview

Contract Amount: $79,517,706 ($79.5M)

Contractor: Hensel Phelps Construction CO

Awarding Agency: Department of Defense

Start Date: 2022-07-29

End Date: 2025-10-03

Contract Duration: 1,162 days

Daily Burn Rate: $68.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 8

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: INTEGRATED CAPABILITIES OFFICE (ICO) HEADQUARTERS

Place of Performance

Location: CAPE CANAVERAL, BREVARD County, FLORIDA, 32920

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $79.5 million to HENSEL PHELPS CONSTRUCTION CO for work described as: INTEGRATED CAPABILITIES OFFICE (ICO) HEADQUARTERS Key points: 1. Contract value of $79.5 million represents a significant investment in facility infrastructure. 2. The contract was awarded through full and open competition, suggesting a robust bidding process. 3. The firm fixed-price contract type aims to control costs and provide predictability. 4. The project duration of 1162 days indicates a substantial construction undertaking. 5. The contract is for commercial and institutional building construction, a key sector for infrastructure development. 6. The award to Hensel Phelps Construction Co. signifies a major contractor engagement for this project.

Value Assessment

Rating: good

The contract value of $79.5 million for a headquarters facility appears within a reasonable range for a project of this scale and complexity, especially considering the firm fixed-price structure which shifts risk to the contractor. Benchmarking against similar large-scale government construction projects suggests that the overall investment is commensurate with the expected deliverables. Without specific details on the scope of work and materials, a precise per-unit cost comparison is difficult, but the total award suggests a competitive pricing environment was achieved through the bidding process.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through full and open competition, indicating that all responsible sources were permitted to submit a bid. The presence of 8 bidders suggests a healthy level of competition for this significant construction project. A competitive bidding process typically leads to better price discovery and encourages contractors to offer their most competitive terms and pricing to secure the award.

Taxpayer Impact: The full and open competition ensures that taxpayer dollars are likely being used efficiently, as multiple firms vied to offer the best value. This process helps prevent inflated pricing and promotes a more cost-effective outcome for the government.

Public Impact

The primary beneficiaries are the Department of Defense and its personnel who will utilize the new Integrated Capabilities Office Headquarters. The project will deliver a new, modern facility designed to support critical defense operations and personnel. The geographic impact is concentrated in Florida, where the facility will be constructed. The construction will likely create numerous jobs in the local Florida workforce, including skilled trades and support staff. The successful completion of this facility is expected to enhance the operational capabilities of the Integrated Capabilities Office.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen construction challenges arise, despite the firm fixed-price contract.
Delays in construction could impact the operational readiness of the Integrated Capabilities Office.
Ensuring compliance with all environmental and safety regulations throughout the construction process.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Award through full and open competition suggests competitive pricing was achieved.
Experienced contractor, Hensel Phelps Construction Co., is likely to manage the project effectively.
The project aims to provide modern infrastructure, potentially improving operational efficiency.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a vital part of the construction industry responsible for developing non-residential structures. The market for large-scale government construction projects is substantial, with significant annual spending allocated to building and renovating federal facilities. This contract represents a notable investment within this sector, contributing to the development of specialized infrastructure for defense operations. Comparable spending benchmarks for similar government headquarters or large institutional buildings would typically range in the tens to hundreds of millions of dollars, depending on size, complexity, and location.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of specific subcontracting requirements for small businesses in the provided data. Therefore, the direct impact on the small business ecosystem is likely minimal unless Hensel Phelps Construction Co. voluntarily engages small businesses as subcontractors. Further analysis would be needed to determine if subcontracting opportunities exist and are being utilized.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Army's contracting and project management offices. Accountability measures are inherent in the firm fixed-price contract type, which incentivizes the contractor to complete the project within budget and schedule. Transparency is generally maintained through contract award announcements and public contract databases. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of Defense Facilities Construction
Military Construction Projects
Federal Building and Infrastructure Development
Large-Scale Commercial Construction Contracts

Risk Flags

Potential for construction delays impacting operational readiness.
Risk of unforeseen site conditions requiring change orders.
Exposure to material price fluctuations over the project duration.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $79.5 million to HENSEL PHELPS CONSTRUCTION CO. INTEGRATED CAPABILITIES OFFICE (ICO) HEADQUARTERS

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 Army).

What is the total obligated amount?

The obligated amount is $79.5 million.

What is the period of performance?

Start: 2022-07-29. End: 2025-10-03.

What is the track record of Hensel Phelps Construction Co. on similar large-scale government construction projects?

Hensel Phelps Construction Co. has a well-established track record in large-scale government and institutional construction projects. They have been involved in numerous high-profile projects for various federal agencies, including military installations, courthouses, and research facilities. Their experience typically includes managing complex logistics, adhering to stringent security requirements, and delivering projects on time and within budget. A review of their past performance on similar projects, particularly those involving significant dollar values and firm fixed-price contracts, would provide further insight into their capabilities and reliability for this specific Integrated Capabilities Office Headquarters project. Publicly available contract databases and agency performance reviews can offer details on their historical success rates and any past issues encountered.

How does the awarded amount compare to the estimated cost or initial budget for this project?

The awarded amount of $79,517,706 represents the final negotiated price for the construction of the Integrated Capabilities Office Headquarters. Without access to the government's initial cost estimates or budget allocations for this project, a direct comparison is not possible. However, the fact that the contract was awarded through full and open competition with 8 bidders suggests that the awarded price is likely competitive and reflects market conditions. If the awarded amount is significantly lower than initial estimates, it could indicate successful cost management during the procurement process or aggressive bidding by contractors. Conversely, if it is higher, it might suggest unforeseen complexities or a less competitive bidding environment than anticipated.

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

The primary risk indicators for this firm fixed-price construction contract include potential for unforeseen site conditions (e.g., soil issues, hazardous materials), labor shortages or disputes, material price volatility, and design changes or scope creep. While the firm fixed-price structure shifts financial risk to the contractor, significant delays or cost overruns due to these factors can still impact project timelines and the government's ability to utilize the facility as intended. The duration of the contract (1162 days) also increases the exposure to market fluctuations and potential disruptions over a longer period. Effective risk mitigation strategies by the contractor, including thorough site investigations, robust supply chain management, and clear communication protocols with the government, are crucial.

What is the expected effectiveness of the new Integrated Capabilities Office Headquarters once completed?

The expected effectiveness of the new Integrated Capabilities Office Headquarters hinges on its design, functionality, and ability to support the specific mission of the ICO. As a modern facility, it is anticipated to provide an improved working environment, enhanced technological infrastructure, and better security compared to existing or outdated facilities. This can lead to increased operational efficiency, better collaboration among personnel, and improved capacity to carry out the ICO's strategic objectives. The success will also depend on the seamless integration of the facility with ongoing operations and the ability of the personnel to leverage the new resources effectively. Ultimately, the effectiveness will be measured by the ICO's enhanced ability to fulfill its defense-related mission.

How does historical spending on similar Department of Defense construction projects compare to this award?

Historical spending on similar Department of Defense construction projects can vary widely based on the type, size, and location of the facility. Large-scale headquarters, research facilities, or specialized operational centers for the DoD often command contract values in the tens to hundreds of millions of dollars. This $79.5 million award for the ICO Headquarters appears to be within the typical range for a significant new construction project of this nature. For context, major military base construction, aircraft hangar development, or barracks construction can also fall within or exceed this range. Analyzing trends in DoD construction spending over the past decade would reveal average costs per square foot or per project type, allowing for a more precise comparison and assessment of whether this award represents an outlier or a standard investment.

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: TWO STEP

Solicitation ID: W9127822R0003

Offers Received: 8

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 6557 HAZELTINE NATIONAL DR STE 1, ORLANDO, FL, 32822

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

Financial Breakdown

Contract Ceiling: $87,473,706

Exercised Options: $79,517,706

Current Obligation: $79,517,706

Actual Outlays: $18,300,000

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $481,499

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline