DoD awards $54M construction contract to Hensel Phelps for Redstone Arsenal facilities

Contract Overview

Contract Amount: $54,062,192 ($54.1M)

Contractor: Hensel Phelps Construction CO

Awarding Agency: Department of Defense

Start Date: 2023-09-29

End Date: 2026-04-07

Contract Duration: 921 days

Daily Burn Rate: $58.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: PROPULSION SYSTEMS LAB REDSTONE ARSENAL, ALABAMA (MADISON COUNTY)

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35898

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $54.1 million to HENSEL PHELPS CONSTRUCTION CO for work described as: PROPULSION SYSTEMS LAB REDSTONE ARSENAL, ALABAMA (MADISON COUNTY) Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract is a firm-fixed-price definitive contract, providing cost certainty for the government. 3. The project duration of 921 days indicates a significant construction undertaking. 4. The award value of $54.1 million falls within a moderate spending range for large construction projects. 5. The North American Industry Classification System (NAICS) code 236220 points to commercial and institutional building construction. 6. The contract is not set aside for small businesses, implying larger firms were primary bidders.

Value Assessment

Rating: good

The contract value of $54.1 million for a large construction project at Redstone Arsenal appears reasonable given the scope and duration. Benchmarking against similar large-scale institutional building projects within the Department of Defense or other federal agencies would provide a more precise value-for-money assessment. The firm-fixed-price structure helps mitigate cost overrun risks for the government. Without specific cost breakdowns or comparisons to independent cost estimates, a definitive assessment of pricing efficiency is challenging, but the competitive award process is a positive indicator.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of 4 bidders (implied by 'no': 4) suggests a healthy level of competition for this significant construction project. A competitive process generally leads to better price discovery and potentially more favorable terms for the government, as contractors vie to win the award.

Taxpayer Impact: The full and open competition for this $54.1 million contract likely resulted in a more competitive price, saving taxpayer dollars compared to a sole-source or limited competition award.

Public Impact

The primary beneficiaries are the Department of the Army and the personnel stationed at Redstone Arsenal, Alabama, who will gain improved facilities. The contract will deliver new or renovated commercial and institutional buildings, enhancing operational capabilities. The geographic impact is concentrated in Madison County, Alabama, supporting local economic activity through construction jobs. The project will likely create numerous construction-related jobs in the local and regional workforce during its execution.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions arise, despite the firm-fixed-price structure.
Dependence on the timely availability of specialized construction materials and skilled labor.
Risk of schedule delays due to weather, regulatory approvals, or contractor performance issues.

Positive Signals

Firm-fixed-price contract provides cost certainty and limits the government's financial exposure.
Awarded through full and open competition, suggesting a competitive pricing environment.
Contractor, Hensel Phelps Construction Co., is a well-established firm with experience in large federal projects.
The project is located in Alabama, potentially leveraging local construction expertise and resources.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a significant segment of the broader construction industry. Federal spending in this area supports the development and maintenance of critical infrastructure for various government agencies. The market for large federal construction projects is often characterized by a mix of large, established firms and specialized subcontractors. The award value of $54.1 million is substantial, placing it among larger federal construction awards, and comparable to significant private sector commercial building projects.

Small Business Impact

The contract was not set aside for small businesses, and the 'sb' field is false. This indicates that the primary bidding and award were likely focused on larger construction firms capable of undertaking projects of this magnitude. While there is no direct small business set-aside, Hensel Phelps Construction Co. may engage small businesses as subcontractors to fulfill specific project requirements, contributing to the small business ecosystem indirectly.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Army contracting and project management offices at Redstone Arsenal. Accountability measures are embedded in the firm-fixed-price contract terms, requiring delivery of specified facilities within the agreed budget and timeline. Transparency is generally maintained through contract award databases and public reporting, though detailed project progress and financial oversight are typically internal to the agency.

Related Government Programs

Department of Defense Military Construction
Federal Building and Facilities Construction
Army Corps of Engineers Construction Contracts
Redstone Arsenal Infrastructure Projects

Risk Flags

Potential for cost overruns due to unforeseen site conditions.
Risk of schedule delays impacting operational readiness.
Contractor performance variability on large-scale projects.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $54.1 million to HENSEL PHELPS CONSTRUCTION CO. PROPULSION SYSTEMS LAB REDSTONE ARSENAL, ALABAMA (MADISON COUNTY)

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 $54.1 million.

What is the period of performance?

Start: 2023-09-29. End: 2026-04-07.

What is Hensel Phelps Construction Co.'s track record with large federal construction contracts, particularly within the Department of Defense?

Hensel Phelps Construction Co. has a substantial track record of executing large-scale federal construction projects, including numerous contracts with the Department of Defense and other government agencies. They are known for their expertise in complex building types and infrastructure development. A review of their past performance on similar projects, such as military barracks, research facilities, or administrative buildings, would indicate their capacity to manage projects of this scope and complexity. Their history often includes successful delivery within budget and schedule, though like any large contractor, specific project challenges can arise. Examining past performance evaluations and any reported disputes or claims would provide a more granular understanding of their reliability for this specific award.

How does the $54.1 million award value compare to similar institutional building construction projects awarded by the Department of the Army in the last three years?

The $54.1 million award value for this institutional building construction project at Redstone Arsenal falls within a common range for significant federal construction endeavors. To benchmark effectively, one would compare this figure against similar projects awarded by the Department of the Army or other DoD components for facilities of comparable size, complexity, and purpose (e.g., administrative centers, laboratories, training facilities). For instance, if the Army has recently awarded contracts for similar-sized buildings in different locations ranging from $40 million to $70 million, then $54.1 million would appear to be a competitive and reasonable figure. Conversely, if comparable projects were awarded at significantly lower or higher price points, it might warrant further investigation into the specific scope, location, and market conditions influencing this particular contract's value.

What are the primary risk indicators associated with this firm-fixed-price construction contract?

While firm-fixed-price contracts offer cost certainty, key risk indicators for this type of construction contract include potential for scope creep if change orders are not managed rigorously, and the risk of contractor default or poor performance if the contractor underestimated costs or faces unforeseen challenges. For this specific project at Redstone Arsenal, risks could also stem from site-specific conditions (e.g., environmental concerns, subsurface issues), labor availability and cost fluctuations, and material supply chain disruptions. The duration of 921 days increases the exposure to market volatility in material prices and labor rates. Effective risk mitigation would involve robust contract administration, clear communication channels, and proactive monitoring of progress and potential issues by the government's project team.

What is the expected program effectiveness or impact of the new facilities to be constructed under this contract?

The program effectiveness of the new facilities will be measured by their ability to support and enhance the mission objectives of the Department of the Army at Redstone Arsenal. Improved infrastructure can lead to increased operational efficiency, better working conditions for personnel, enhanced security, and the capacity to house new technologies or expanded operations. For example, if the construction involves upgrading laboratory spaces, it could directly contribute to advancements in research and development capabilities. If it involves new administrative buildings, it could streamline operations and improve collaboration. The ultimate effectiveness will depend on how well the completed facilities meet the functional requirements and long-term strategic goals of the installation.

How does historical spending on construction at Redstone Arsenal compare to this $54.1 million award?

Analyzing historical spending on construction at Redstone Arsenal provides context for the $54.1 million award. Redstone Arsenal is a major U.S. Army installation with ongoing needs for infrastructure modernization, expansion, and maintenance. Historical data would reveal the typical scale and frequency of construction contracts awarded at the base. If Redstone Arsenal has a history of awarding multiple contracts in the tens of millions of dollars annually for various facilities, then this $54.1 million award fits within that pattern. Conversely, if this award represents a significant increase or decrease compared to historical averages, it might indicate a shift in investment priorities, a particularly large-scale project, or changes in contracting strategies. Understanding this historical context helps assess whether this award is an anomaly or part of a consistent investment trend.

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: W9127823R0072

Offers Received: 4

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: $132,024,600

Exercised Options: $84,996,600

Current Obligation: $54,062,192

Actual Outlays: $-16,566,291

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline