Department of the Army awarded $53M firm-fixed-price contract for construction services to Hensel Phelps Construction Co

Contract Overview

Contract Amount: $53,015,281 ($53.0M)

Contractor: Hensel Phelps Construction CO

Awarding Agency: Department of Defense

Start Date: 2009-03-12

End Date: 2011-05-02

Contract Duration: 781 days

Daily Burn Rate: $67.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 11

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: BASE BID 0001 - CO120-CONTRACT (142249)

Place of Performance

Location: FORT GEORGE G MEADE, ANNE ARUNDEL County, MARYLAND, 20755

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $53.0 million to HENSEL PHELPS CONSTRUCTION CO for work described as: BASE BID 0001 - CO120-CONTRACT (142249) Key points: 1. Contract awarded at a competitive price, indicating potential value for money. 2. Full and open competition suggests a robust market for these services. 3. Contract duration of 781 days implies a significant project scope. 4. The contract is for commercial and institutional building construction, a common federal need. 5. Fixed-price contract type limits cost overrun risk for the government. 6. The base bid was $53,015,280.71, with a total award of $67,881,000. 7. This contract falls within the broader category of construction services for the Department of Defense.

Value Assessment

Rating: good

The contract's total award of $67.88 million appears reasonable given the project's scope and duration (781 days). While specific benchmarks for this exact type of construction are not provided, the firm-fixed-price nature of the contract suggests that the initial bid was deemed acceptable and that cost risks are largely borne by the contractor. The difference between the base bid and the final award could be attributed to contract modifications or options exercised, which would require further investigation to fully assess value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, with 11 bids received. This indicates a healthy level of market interest and suggests that the government had multiple viable options to choose from. The presence of numerous bidders typically drives down prices and encourages contractors to offer competitive terms, benefiting the government.

Taxpayer Impact: The extensive competition for this contract likely resulted in a more favorable price for taxpayers compared to a sole-source or limited competition scenario.

Public Impact

The primary beneficiary is the Department of the Army, which will receive the constructed facilities. The contract delivers essential commercial and institutional building construction services. The project is located in Maryland (MD), impacting the local economy and workforce in that state. Construction projects of this scale typically involve significant employment opportunities for skilled trades and laborers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if contract modifications are not carefully managed.
Reliance on a single contractor for the duration of the project could pose risks if performance issues arise.
The fixed-price nature might disincentivize contractors from identifying cost-saving efficiencies beyond initial bid.

Positive Signals

Firm-fixed-price contract type provides cost certainty for the government.
Full and open competition suggests a strong pool of qualified bidders.
The contractor, Hensel Phelps Construction Co., is a well-established entity in the construction industry.
The contract duration is clearly defined, allowing for structured project management.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a significant segment of the broader construction industry. This sector encompasses the building of non-residential structures such as offices, educational facilities, healthcare buildings, and government installations. Federal spending in this area is substantial, supporting infrastructure development and operational capabilities across various agencies. Comparable spending benchmarks would typically involve analyzing the cost per square foot or cost per project for similar government construction projects.

Small Business Impact

The provided data indicates that small business participation was not a specific set-aside for this contract (ss: false, sb: false). While Hensel Phelps Construction Co. is a large business, there may be subcontracting opportunities for small businesses within the scope of this project. The extent of small business subcontracting would depend on the prime contractor's strategy and any flow-down requirements from the government.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant project management office within the Department of the Army. Accountability measures are inherent in the firm-fixed-price contract, which holds the contractor responsible for delivering the specified construction within the agreed-upon price. Transparency is generally maintained through contract award databases and reporting requirements, though specific project-level oversight details are not provided.

Related Government Programs

Military Construction
Federal Building Construction
Department of Defense Facilities Management
General Services Administration (GSA) Construction Contracts

Risk Flags

Potential for cost overruns if scope is not well-defined.
Contractor performance risk.
Delays due to unforeseen site conditions.
Quality control issues.
Contract disputes.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $53.0 million to HENSEL PHELPS CONSTRUCTION CO. BASE BID 0001 - CO120-CONTRACT (142249)

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 $53.0 million.

What is the period of performance?

Start: 2009-03-12. End: 2011-05-02.

What is the track record of Hensel Phelps Construction Co. with the Department of Defense?

Hensel Phelps Construction Co. has a significant history of working with the Department of Defense and other federal agencies. As a large, established construction firm, they have likely been involved in numerous projects of varying scales and complexities. Analyzing their past performance on similar DoD contracts would involve reviewing contract databases for awards, performance ratings, and any documented disputes or claims. A positive performance history with the DoD would indicate a lower risk profile for this specific contract. Without access to detailed performance reviews, it's assumed their selection under full and open competition suggests they met the required qualifications and demonstrated capability.

How does the awarded amount compare to similar construction projects in Maryland?

Benchmarking the $67.88 million award against similar construction projects in Maryland requires detailed cost data for comparable projects, including size, type, and complexity. Factors such as prevailing wage rates, material costs, and specific site conditions in Maryland would influence project costs. Generally, large-scale institutional or commercial building projects in major metropolitan areas tend to have higher costs. A comprehensive comparison would involve analyzing cost-per-square-foot metrics for recently completed, similar-sized government or private sector projects in the region. Given the competitive bidding process, the award is presumed to be market-aligned, but a precise comparison would necessitate access to more granular market data.

What are the primary risks associated with a firm-fixed-price construction contract of this magnitude?

The primary risk with a firm-fixed-price (FFP) contract of this magnitude is the potential for the contractor to incur significant losses if costs exceed the agreed-upon price. This risk is largely borne by Hensel Phelps Construction Co. However, for the government, risks can include the contractor cutting corners on quality to maintain profitability, potential for disputes over contract scope or unforeseen conditions, and the possibility of contractor default if they become financially distressed. Effective project oversight, clear contract specifications, and robust risk management by the government are crucial to mitigate these potential issues and ensure successful project completion.

What is the expected effectiveness of this construction contract in meeting the Army's facility needs?

The effectiveness of this contract hinges on the successful completion of the construction project according to the specified requirements, timeline, and budget. Assuming Hensel Phelps Construction Co. delivers a high-quality facility that meets the Army's operational needs, the contract will be highly effective. The firm-fixed-price structure incentivizes the contractor to manage resources efficiently. The effectiveness will ultimately be measured by the usability, durability, and suitability of the completed facility for its intended purpose, as well as adherence to the contract terms. Post-occupancy evaluations would provide the most definitive measure of effectiveness.

How has federal spending on commercial and institutional building construction trended over the past five years?

Federal spending on commercial and institutional building construction has generally remained robust, driven by the need to maintain and modernize government infrastructure, including military bases, federal courthouses, research facilities, and administrative buildings. While specific year-over-year trends can fluctuate based on budget appropriations, economic conditions, and national priorities, there is a consistent demand for these services. Factors such as aging infrastructure, evolving security requirements, and the need for energy-efficient upgrades contribute to sustained federal investment in this sector. Analyzing historical data from sources like the USASpending.gov or agency budget reports would provide precise figures on spending trends.

What is the significance of the 781-day duration for this contract?

A contract duration of 781 days (approximately 2.1 years) indicates a substantial construction project. This length suggests that the scope of work involves significant complexity, potentially including new construction, major renovations, or the development of large-scale facilities. Such durations are typical for projects requiring extensive planning, site preparation, foundation work, structural assembly, interior finishing, and system installations. The extended timeline allows for phased construction, coordination of various trades, and management of potential weather delays or unforeseen site conditions, while also necessitating robust project management from both the contractor and the government oversight team.

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: W912DR08R0111

Offers Received: 11

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 4437 BROOKFIELD CORPORATE DR, STE 207, CHANTILLY, VA, 20151

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $58,551,763

Exercised Options: $57,116,763

Current Obligation: $53,015,281

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline