DoD awards $143M for Schriever AFB facility construction, with Hensel Phelps as prime contractor

Contract Overview

Contract Amount: $143,213,177 ($143.2M)

Contractor: Hensel Phelps Construction CO

Awarding Agency: Department of Defense

Start Date: 2021-09-01

End Date: 2025-05-11

Contract Duration: 1,348 days

Daily Burn Rate: $106.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: CONSTRUCT CONSOLIDATED OPERATIONS FACILITY AT SCHRIEVER AFB, CO

Place of Performance

Location: COLORADO SPRINGS, EL PASO County, COLORADO, 80912

State: Colorado Government Spending

Plain-Language Summary

Department of Defense obligated $143.2 million to HENSEL PHELPS CONSTRUCTION CO for work described as: CONSTRUCT CONSOLIDATED OPERATIONS FACILITY AT SCHRIEVER AFB, CO Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract type is a firm-fixed-price definitive contract, providing cost certainty. 3. Project duration is 1348 days, indicating a significant, long-term construction effort. 4. The facility is located in Colorado, potentially impacting the local construction workforce. 5. The North American Industry Classification System (NAICS) code 236220 points to commercial and institutional building construction. 6. The award value of $143.2 million represents a substantial investment in military infrastructure.

Value Assessment

Rating: good

Benchmarking construction projects of this scale can be challenging due to unique site requirements and material costs. However, the firm-fixed-price nature of the contract provides a degree of cost control. Further analysis would require detailed cost breakdowns and comparisons to similar military construction projects in comparable geographic regions. The award value appears within a reasonable range for a large-scale federal construction project of this type.

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 5 bids suggests a healthy level of competition for this significant construction project. A competitive bidding process generally leads to better price discovery and potentially more favorable terms for the government.

Taxpayer Impact: Full and open competition ensures that taxpayer dollars are used efficiently by driving down prices through market forces. Multiple bidders increase the likelihood of securing the best value for the government.

Public Impact

The primary beneficiaries are the Department of Defense and its personnel stationed at Schriever Air Force Base, who will gain a new consolidated operations facility. The project will deliver a new, modern facility designed for operational efficiency and personnel support. The geographic impact is concentrated in Colorado, specifically at Schriever AFB. The construction effort will likely create numerous jobs for skilled trades and laborers in the region, boosting the local economy. The completion of the facility is expected to enhance the operational capabilities and readiness of the base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions arise, despite the fixed-price contract.
Delays in construction could impact the operational readiness of the base.
Reliance on a single prime contractor, Hensel Phelps Construction Co., for overall project execution.
Weather-related delays are a common risk in construction projects, especially in Colorado's climate.
Coordination challenges between various subcontractors and the prime contractor.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Awarded through full and open competition, indicating a competitive market.
Experienced prime contractor, Hensel Phelps Construction Co., likely brings significant expertise.
Long project duration allows for phased construction and potential learning curve efficiencies.
Consolidated facility may lead to long-term operational cost savings for the DoD.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a significant segment of the broader construction industry. Federal construction spending in this area supports military readiness, government operations, and infrastructure development. Comparable spending benchmarks would involve analyzing other large-scale military construction projects awarded by the Department of Defense or other federal agencies for similar types of facilities, considering factors like square footage, complexity, and location.

Small Business Impact

This contract was not set aside for small businesses, nor does it explicitly mention subcontracting goals for small businesses in the provided data. The prime contractor, Hensel Phelps Construction Co., is a large entity. The implications for the small business ecosystem depend on the subcontracting opportunities that Hensel Phelps will create. Without specific subcontracting plans or goals, it is difficult to assess the direct impact on small businesses in this instance.

Oversight & Accountability

Oversight for this construction contract will primarily be managed by the Department of the Army, likely through contracting officers' representatives (CORs) and project managers. Accountability measures are embedded in the firm-fixed-price contract terms, with penalties for non-performance or delays. Transparency is generally maintained through federal contract databases like FPDS-NG. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Military Construction Program
Department of Defense Facilities Modernization
Schriever Air Force Base Operations Support
Federal Building Construction Contracts
Large-Scale Infrastructure Projects

Risk Flags

Potential for cost escalation on long-term fixed-price contracts.
Risk of construction delays due to weather or unforeseen site conditions.
Dependence on prime contractor's ability to manage subcontractors effectively.
Ensuring quality standards are met throughout the extended construction period.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $143.2 million to HENSEL PHELPS CONSTRUCTION CO. CONSTRUCT CONSOLIDATED OPERATIONS FACILITY AT SCHRIEVER AFB, CO

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 $143.2 million.

What is the period of performance?

Start: 2021-09-01. End: 2025-05-11.

What is the track record of Hensel Phelps Construction Co. on similar federal construction projects?

Hensel Phelps Construction Co. has a substantial track record with federal construction projects, particularly for the Department of Defense. They have been involved in numerous large-scale military construction initiatives, including barracks, training facilities, and operational buildings, across various bases. Their experience often includes complex projects requiring adherence to stringent military specifications and security protocols. Reviewing their past performance on similar firm-fixed-price contracts, especially those involving base infrastructure or consolidated facilities, would provide insight into their ability to manage cost, schedule, and quality effectively. Data from contract databases often shows a history of successful project completion, though specific details on cost variances or schedule adherence would require deeper analysis of individual contract performance reports.

How does the awarded value compare to similar consolidated operations facility constructions at other military bases?

Comparing the $143.2 million award for the Schriever AFB facility requires identifying comparable projects based on size (square footage), complexity, function (consolidated operations), and location. Similar projects might include operations centers, administrative hubs, or mission support facilities at other Air Force or DoD installations. Benchmarking would involve analyzing the cost per square foot, considering regional construction cost indices, and factoring in any unique technological or security requirements. Without access to a database of precisely comparable projects with detailed cost breakdowns, a definitive value comparison is difficult. However, for a large-scale, multi-year construction project of this nature, the awarded amount appears to be within the expected range for significant federal infrastructure investments.

What are the primary risks associated with this firm-fixed-price contract for a long-duration construction project?

The primary risk with a firm-fixed-price (FFP) contract, especially for a long-duration project like this 1348-day construction, lies with the contractor absorbing unforeseen cost increases. While FFP offers cost certainty to the government, the contractor assumes the risk of material price escalation, labor cost fluctuations, and unexpected site conditions that could drive up expenses beyond initial estimates. For the government, the main risks are potential contractor default if they mismanage costs, or quality compromises if the contractor seeks to cut corners to maintain profitability. Delays, even with FFP, can still occur due to factors beyond the contractor's control (e.g., extreme weather, regulatory changes), which may lead to contract modifications and potential cost adjustments, albeit typically limited under FFP terms.

How effective is full and open competition in ensuring value for money on large federal construction contracts?

Full and open competition is generally considered the most effective method for ensuring value for money on large federal construction contracts. By allowing all responsible sources to compete, the government maximizes the pool of potential bidders, thereby increasing the likelihood of receiving competitive pricing and innovative solutions. The process encourages bidders to offer their best terms and prices to win the contract. The presence of multiple bids, as seen with the 5 bids received for this project, provides a strong basis for price comparison and negotiation. While effective, the government must still ensure robust evaluation criteria are in place to select the best value proposal, not just the lowest price, considering factors like technical approach, past performance, and schedule.

What are the historical spending patterns for similar construction projects at Schriever AFB or within the Air Force?

Historical spending patterns for similar construction projects at Schriever AFB or within the Air Force typically show significant investment in infrastructure modernization and expansion. Projects often include new facilities for mission support, housing, training, and operational command. Spending can fluctuate based on military priorities, budget allocations, and the lifecycle needs of existing infrastructure. Large-scale construction projects like this consolidated facility are usually planned years in advance and funded through specific military construction appropriations. Analyzing past awards for similar types of buildings (e.g., command centers, administrative complexes) at comparable Air Force bases would reveal trends in contract values, durations, and the types of contractors frequently engaged.

What are the potential long-term operational cost implications of this new consolidated facility?

A new consolidated operations facility is typically designed with modern energy efficiency standards and optimized layouts, which can lead to significant long-term operational cost savings for the government. Consolidating functions into a single, modern building can reduce the need for maintaining multiple, potentially older and less efficient structures. This can translate into lower utility costs (heating, cooling, lighting), reduced maintenance and repair expenses, and potentially fewer personnel required for facility management. Furthermore, a purpose-built facility can enhance operational efficiency and workflow, indirectly contributing to cost savings through improved productivity and reduced downtime.

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: W9128F20R0002

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 12121 GRANT ST, THORNTON, CO, 80241

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

Financial Breakdown

Contract Ceiling: $143,213,177

Exercised Options: $143,213,177

Current Obligation: $143,213,177

Actual Outlays: $9,172,563

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline