Hensel Phelps Construction awarded $94.5M for Maui secure integration lab, highlighting significant defense infrastructure investment

Contract Overview

Contract Amount: $94,500,840 ($94.5M)

Contractor: Hensel Phelps Construction CO

Awarding Agency: Department of Defense

Start Date: 2024-11-27

End Date: 2027-03-17

Contract Duration: 840 days

Daily Burn Rate: $112.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: MCAF PNEK063092 SECURE INTEGRATION SUPPORT LABORATORY, MAUI, HAWAII

Place of Performance

Location: FORT SHAFTER, HONOLULU County, HAWAII, 96858

State: Hawaii Government Spending

Plain-Language Summary

Department of Defense obligated $94.5 million to HENSEL PHELPS CONSTRUCTION CO for work described as: MCAF PNEK063092 SECURE INTEGRATION SUPPORT LABORATORY, MAUI, HAWAII Key points: 1. Contract value represents a substantial investment in specialized defense facilities. 2. The firm-fixed-price structure aims to control costs for the government. 3. A single award suggests a focused approach to contractor selection for this specific project. 4. The project duration of 840 days indicates a complex and lengthy construction undertaking. 5. Location in Maui, Hawaii, points to strategic defense positioning in the Pacific. 6. The contract is for commercial and institutional building construction, a broad category.

Value Assessment

Rating: good

The contract value of $94.5 million for a secure integration laboratory in Maui appears within a reasonable range for large-scale construction projects of this nature. Benchmarking against similar Department of Defense construction contracts for specialized facilities would provide a more precise value-for-money assessment. The firm-fixed-price type suggests that cost overruns are primarily the contractor's responsibility, which is generally favorable for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders were likely solicited. The presence of 5 bids suggests a healthy level of interest and competition for this significant defense construction project. This competitive environment is expected to drive more favorable pricing and terms for the government.

Taxpayer Impact: Full and open competition ensures that taxpayers benefit from a wide range of offers, leading to potentially lower prices and better quality services due to market forces.

Public Impact

The primary beneficiaries are the Department of Defense and its personnel who will utilize the secure integration laboratory. The project will deliver a specialized facility crucial for defense operations and technological integration. The geographic impact is concentrated in Maui, Hawaii, supporting regional defense capabilities. The construction phase will likely create numerous jobs for skilled and unskilled labor in Hawaii.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for construction delays impacting operational readiness.
Risk of cost escalation if unforeseen site conditions arise, despite fixed-price contract.
Logistical challenges associated with construction in a remote island location like Maui.

Positive Signals

Firm-fixed-price contract mitigates cost overrun risk for the government.
Full and open competition suggests a robust selection process.
Experienced contractor, Hensel Phelps Construction Co., has a track record in large-scale projects.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, specifically for a specialized government facility. The defense construction market is characterized by large, complex projects often requiring high security and specialized technical capabilities. Spending in this sector is driven by national security needs and infrastructure modernization efforts. Comparable benchmarks would involve other large-scale military construction projects, such as barracks, training facilities, or research laboratories.

Small Business Impact

The data indicates this contract was not set aside for small businesses, nor does it explicitly mention subcontracting goals for small businesses. This suggests that the primary award went to a large construction firm. Further analysis would be needed to determine if Hensel Phelps has a subcontracting plan that includes small business participation, which is common in projects of this scale.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Army contracting officers and project managers. The firm-fixed-price nature of the contract provides a degree of financial oversight by limiting the government's exposure to cost increases. Transparency will depend on the agency's policies regarding the release of project details and progress reports. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of Defense Military Construction
Defense Infrastructure Projects
Secure Facility Construction
Pacific Command Infrastructure

Risk Flags

Geographic isolation may increase logistical costs and timelines.
Potential for environmental challenges (e.g., seismic, weather) impacting construction.
Security requirements for a 'secure integration laboratory' add complexity and risk.
Dependence on specialized labor and materials in a remote location.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $94.5 million to HENSEL PHELPS CONSTRUCTION CO. MCAF PNEK063092 SECURE INTEGRATION SUPPORT LABORATORY, MAUI, 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 Army).

What is the total obligated amount?

The obligated amount is $94.5 million.

What is the period of performance?

Start: 2024-11-27. End: 2027-03-17.

What is Hensel Phelps Construction Co.'s track record with similar Department of Defense secure facility projects?

Hensel Phelps Construction Co. has a significant history of undertaking large-scale government and military construction projects. While specific details on 'secure integration laboratories' may vary, their portfolio includes numerous complex facilities for defense agencies, airports, and institutional clients. Their experience often involves adhering to stringent security protocols, advanced technological integration, and managing large workforces in challenging environments. A review of their past performance on projects with similar security requirements and technical specifications would be necessary to fully assess their suitability and past success rates for this specific contract. Their established presence in the federal contracting space suggests a familiarity with government procurement processes and compliance standards.

How does the $94.5 million contract value compare to similar secure integration laboratory constructions?

Benchmarking the $94.5 million contract value requires comparing it to similar secure integration laboratories or specialized defense facility constructions, which can be challenging due to the unique nature of such projects. Factors like size, technological complexity, security requirements, and geographic location significantly influence costs. Generally, large-scale, high-security facilities for defense purposes can range from tens of millions to hundreds of millions of dollars. The value of this contract appears to be within the mid-to-high range for such specialized infrastructure, especially considering the location in Maui, Hawaii, which can incur higher logistical and labor costs. A detailed comparison would necessitate access to data on comparable projects, including their scope, duration, and final costs.

What are the primary risks associated with constructing a secure integration laboratory in Maui, Hawaii?

Constructing a secure integration laboratory in Maui, Hawaii, presents several key risks. Geographically, the island location can lead to increased logistical challenges and costs for material transport and workforce mobilization. Environmental factors, such as seismic activity and hurricane potential, may require specialized construction techniques and materials, adding complexity and cost. Furthermore, the remote nature of the site could impact the availability of specialized labor and equipment. Security requirements for a 'secure integration laboratory' inherently introduce risks related to design, implementation, and ongoing maintenance of sensitive systems, demanding rigorous protocols and highly skilled personnel. Finally, potential delays due to weather, supply chain disruptions, or unforeseen site conditions are amplified in an island environment.

What is the expected effectiveness of this secure integration laboratory for the Department of Defense?

The expected effectiveness of this secure integration laboratory hinges on its design, technological capabilities, and how well it supports the Department of Defense's operational and strategic objectives. Such facilities are typically built to enable advanced research, development, testing, and integration of critical defense systems and technologies. Its effectiveness will be measured by its ability to enhance command and control, facilitate secure communication, support intelligence analysis, or accelerate the development of new defense capabilities. The investment suggests a critical need for enhanced integration and security in a specific area of defense operations, likely aimed at improving national security posture, particularly in the strategic Pacific region.

How has federal spending on similar defense construction projects in Hawaii trended over the past five years?

Analyzing federal spending trends on similar defense construction projects in Hawaii over the past five years would require access to detailed historical contract data. Generally, federal investment in military infrastructure in Hawaii has been substantial, driven by its strategic importance in the Indo-Pacific region. Spending typically focuses on modernizing existing facilities, building new operational capabilities, and enhancing force readiness. Trends might show an increase in spending on advanced technology integration facilities, cybersecurity infrastructure, and resilient construction to withstand environmental challenges. Specific data would reveal the volume and value of contracts awarded for construction projects by agencies like the Department of Defense and its branches within Hawaii.

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: W9128A24R0011

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: $94,500,840

Exercised Options: $94,500,840

Current Obligation: $94,500,840

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline