Hensel Phelps Construction Co. awarded $55.3M for Fort Carson hangar construction, a significant investment in military infrastructure
Contract Overview
Contract Amount: $55,348,648 ($55.3M)
Contractor: Hensel Phelps Construction CO.
Awarding Agency: Department of Defense
Start Date: 2012-08-09
End Date: 2019-03-05
Contract Duration: 2,399 days
Daily Burn Rate: $23.1K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 12
Pricing Type: FIRM FIXED PRICE
Sector: Construction
Official Description: M - DESIGN-BUILD 13TH CAB, ASB HANGAR, PN 77306, FORT CARSON, COLORADO [P2# 336558]
Place of Performance
Location: COLORADO SPRINGS, EL PASO County, COLORADO, 80913
State: Colorado Government Spending
Plain-Language Summary
Department of Defense obligated $55.3 million to HENSEL PHELPS CONSTRUCTION CO. for work described as: M - DESIGN-BUILD 13TH CAB, ASB HANGAR, PN 77306, FORT CARSON, COLORADO [P2# 336558] Key points: 1. The contract represents a substantial investment in upgrading military facilities, specifically for aviation support. 2. Competition dynamics for this large-scale construction project are crucial for ensuring taxpayer value. 3. Performance risks are associated with large, multi-year construction projects, including potential delays and cost overruns. 4. The project's success hinges on effective project management and adherence to design specifications. 5. This contract positions Hensel Phelps as a key player in large-scale defense construction projects. 6. The firm-fixed-price contract type shifts significant cost risk to the contractor.
Value Assessment
Rating: good
The $55.3 million award for the 13th CAB hangar at Fort Carson appears to be within a reasonable range for a project of this scale and complexity. Benchmarking against similar military construction projects for aircraft hangars and support facilities suggests that the pricing is competitive, especially considering the firm-fixed-price nature of the contract which typically includes a premium for contractor risk. The duration of the contract (2399 days) also indicates a comprehensive scope of work, justifying the overall cost.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that multiple qualified contractors had the opportunity to bid. With 12 bids received, the level of competition was robust, which generally leads to more competitive pricing and better value for the government. This broad competition suggests that the market has sufficient capacity and interest in undertaking such large-scale defense construction projects.
Taxpayer Impact: A high level of competition among bidders for this project helps ensure that taxpayer dollars are used efficiently by driving down costs and encouraging the most capable contractors to offer their best pricing.
Public Impact
The primary beneficiaries are the U.S. Army and the personnel stationed at Fort Carson, Colorado, who will receive a modern and functional aviation support facility. The project delivers essential infrastructure for the 13th Combat Aviation Brigade, enhancing operational readiness and capabilities. The geographic impact is concentrated at Fort Carson, Colorado, supporting local economic activity through construction jobs and related services. Workforce implications include the creation of numerous construction jobs, both directly with the prime contractor and indirectly through subcontractors.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for construction delays impacting operational readiness.
- Risk of cost overruns despite the firm-fixed-price contract, especially with unforeseen site conditions.
- Ensuring compliance with stringent military construction standards and security requirements.
Positive Signals
- Awarded under full and open competition with a significant number of bids received.
- Firm-fixed-price contract type transfers cost risk to the contractor.
- Contractor has a track record in large-scale construction projects.
- Project addresses critical military infrastructure needs.
Sector Analysis
The Commercial and Institutional Building Construction sector is a vital part of the U.S. economy, encompassing a wide range of projects from office buildings to specialized facilities like military hangars. The market for defense construction is substantial, driven by the need to maintain and modernize military infrastructure globally. This contract fits within the broader trend of government investment in upgrading aging facilities and ensuring operational readiness. Comparable spending benchmarks for similar military construction projects often range in the tens to hundreds of millions of dollars, depending on size, complexity, and location.
Small Business Impact
While this contract was not specifically set aside for small businesses and the prime contractor, Hensel Phelps Construction Co., is a large entity, the subcontracting opportunities generated by a project of this magnitude are significant. Large prime contractors are often required to meet small business subcontracting goals, providing a pathway for smaller firms to participate in major federal projects. This can foster growth and experience within the small business construction ecosystem.
Oversight & Accountability
Oversight for this contract would typically be managed by the U.S. Army Corps of Engineers or a similar Department of Defense contracting activity, ensuring compliance with contract terms, specifications, and quality standards. Accountability measures are built into the contract through performance milestones, payment schedules tied to progress, and potential penalties for delays or deficiencies. Transparency is facilitated through contract award databases and reporting requirements, though specific day-to-day oversight details are often internal.
Related Government Programs
- Military Construction (MILCON)
- Department of Defense Facilities
- Airfield and Hangar Construction
- Fort Carson Infrastructure Projects
- Large-Scale Design-Build Contracts
Risk Flags
- Potential for schedule delays
- Risk of cost escalation (despite FFP)
- Quality control during construction
- Site condition unforeseen issues
Tags
construction, defense, department-of-defense, fort-carson, colorado, definitive-contract, firm-fixed-price, full-and-open-competition, large-contract, aviation-infrastructure, design-build
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $55.3 million to HENSEL PHELPS CONSTRUCTION CO.. M - DESIGN-BUILD 13TH CAB, ASB HANGAR, PN 77306, FORT CARSON, COLORADO [P2# 336558]
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 $55.3 million.
What is the period of performance?
Start: 2012-08-09. End: 2019-03-05.
What is Hensel Phelps Construction Co.'s track record with large-scale military construction projects?
Hensel Phelps Construction Co. has a well-established history of undertaking large and complex construction projects, including significant work for the Department of Defense and other federal agencies. They have experience in building military facilities, aviation infrastructure, and other critical installations. Their portfolio often includes design-build projects, similar to this Fort Carson hangar, demonstrating their capability to manage multifaceted projects from conception through completion. Reviewing their past performance on similar contracts, particularly those involving aviation facilities or military bases, would provide further insight into their reliability and expertise in this specific domain.
How does the $55.3 million cost compare to similar military hangar construction projects?
The $55.3 million award for the 13th CAB hangar at Fort Carson appears to be within a reasonable range for a project of this scale and complexity. Benchmarking against similar military construction projects for aircraft hangars and support facilities suggests that the pricing is competitive, especially considering the firm-fixed-price nature of the contract which typically includes a premium for contractor risk. The duration of the contract (2399 days) also indicates a comprehensive scope of work, justifying the overall cost. Factors such as specific technological requirements, site conditions, and regional labor costs can cause variations, but the overall figure aligns with industry norms for such specialized defense infrastructure.
What are the primary risks associated with a firm-fixed-price contract for a project of this magnitude?
The primary risk associated with a firm-fixed-price (FFP) contract for a large construction project like the Fort Carson hangar is that the contractor bears the brunt of any cost overruns. While this is generally favorable for the government in terms of cost certainty, it can incentivize the contractor to cut corners on quality or schedule if unforeseen issues arise that significantly increase costs beyond their initial estimates. For the government, risks include potential disputes over scope changes, contractor claims for unforeseen conditions, and the possibility of contractor default if they mismanaged costs. However, FFP contracts also provide strong cost control for the government, assuming the initial price was set appropriately and the contractor is competent.
How effective is full and open competition in ensuring value for money on large defense construction contracts?
Full and open competition is widely considered the most effective method for ensuring value for money on large defense construction contracts. By allowing all responsible sources to submit bids, it maximizes the pool of potential contractors, thereby increasing the likelihood of receiving competitive pricing and innovative solutions. The presence of 12 bids in this case indicates a healthy market response. This competitive pressure encourages contractors to offer their best prices and performance guarantees to win the contract. While the lowest bid doesn't always guarantee the best value, the process itself drives efficiency and cost-consciousness among bidders.
What is the historical spending pattern for similar aviation infrastructure projects at Department of the Army installations?
Historical spending patterns for similar aviation infrastructure projects at Department of the Army installations reveal a consistent need for modernization and expansion of facilities to support evolving aviation technologies and operational requirements. Projects often involve the construction or renovation of hangars, maintenance facilities, and supporting infrastructure, with costs frequently ranging from tens to hundreds of millions of dollars, depending on the scale and complexity. Factors such as the type of aircraft supported, specific technological requirements (e.g., climate control, specialized equipment), and geographic location significantly influence project costs. The Army frequently utilizes large, multi-year contracts, often awarded through competitive bidding processes, to address these infrastructure needs.
What oversight mechanisms are in place to ensure the successful completion of this hangar project?
Oversight for this contract is primarily managed by the contracting officer and their representatives (CORs) within the Department of the Army, likely supported by the U.S. Army Corps of Engineers. These entities are responsible for monitoring the contractor's performance against contract requirements, including schedule adherence, quality of work, and compliance with specifications. Regular site inspections, progress meetings, and review of contractor submittals are standard oversight practices. Payment is typically tied to verified progress, ensuring that funds are disbursed only for completed and accepted work. Any significant deviations or issues would trigger formal communication and potential corrective action plans.
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: W9128F12R0005
Offers Received: 12
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Hensel Phelps Construction CO (UEI: 063322085)
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: $55,348,648
Exercised Options: $55,348,648
Current Obligation: $55,348,648
Subaward Activity
Number of Subawards: 27
Total Subaward Amount: $28,086,062
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2012-08-09
Current End Date: 2019-03-05
Potential End Date: 2019-03-05 00:00:00
Last Modified: 2021-02-25
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