Fort Belvoir Design-Build Services Contract Awarded to Hensel Phelps for $24.8M

Contract Overview

Contract Amount: $24,789,381 ($24.8M)

Contractor: Hensel Phelps Construction CO

Awarding Agency: Department of Defense

Start Date: 2010-09-13

End Date: 2020-09-13

Contract Duration: 3,653 days

Daily Burn Rate: $6.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: OCAR, PHASE II, BRAC 132 (DESIGN-BUILD SERVICES), FORT BELVOIR, VA

Place of Performance

Location: FORT BELVOIR, FAIRFAX County, VIRGINIA, 22060

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $24.8 million to HENSEL PHELPS CONSTRUCTION CO for work described as: OCAR, PHASE II, BRAC 132 (DESIGN-BUILD SERVICES), FORT BELVOIR, VA 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 duration of the contract is substantial, spanning over 10 years. 4. The contract value is within a typical range for large-scale construction projects. 5. The project is located at Fort Belvoir, Virginia, impacting local infrastructure. 6. The contractor, Hensel Phelps Construction Co., is a significant player in the construction industry.

Value Assessment

Rating: good

The contract value of $24.8 million for design-build services at Fort Belvoir appears reasonable given the extensive 10-year duration. Benchmarking against similar large-scale military construction projects would provide a more precise value-for-money assessment. The firm-fixed-price structure helps mitigate cost overruns for the government, which is a positive indicator for financial management. Without specific per-unit cost data or detailed scope breakdowns, a definitive comparison to market rates is challenging, but the overall award suggests a competitive outcome.

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 bidders suggests a healthy level of competition for this significant project. A competitive bidding 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 ensures that taxpayer dollars are likely being used efficiently, as multiple companies competed to offer the best value. This process helps prevent inflated pricing that might occur in less competitive scenarios.

Public Impact

The primary beneficiaries are the Department of the Army and personnel stationed at Fort Belvoir, Virginia, who will receive updated or new facilities. The contract delivers design-build services, encompassing both the architectural/engineering design and the subsequent construction phases. The geographic impact is localized to Fort Belvoir, Virginia, potentially creating local employment opportunities during the construction period. The project will likely involve a significant construction workforce, contributing to employment in the skilled trades sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The long contract duration (over 10 years) could introduce risks related to changing construction technologies, material costs, and regulatory environments.
Potential for scope creep over such an extended period, requiring diligent oversight to manage changes effectively.
Reliance on a single contractor for an extended period may limit flexibility if performance issues arise.

Positive Signals

Firm-fixed-price contract provides cost certainty and limits the government's exposure to cost overruns.
Awarded under full and open competition, indicating a robust selection process and likely competitive pricing.
The contractor, Hensel Phelps, is a well-established firm with a track record in large-scale construction projects.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a significant segment of the broader construction industry. The market for large-scale government construction, particularly for military installations, is substantial, with agencies like the Department of Defense being major clients. This contract represents a specific instance of federal investment in infrastructure, contributing to the overall spending within this sector. Comparable spending benchmarks would involve analyzing other design-build contracts for military bases or similar government facilities.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting requirements specifically mandated for small businesses within this award. The prime contractor, Hensel Phelps, will likely manage its own supply chain and subcontracting needs, with the potential for small businesses to participate as subcontractors if selected by the prime. The absence of a set-aside means the primary competition was open to all eligible firms, regardless of size.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and their representatives within the Department of the Army. Accountability measures are inherent in the firm-fixed-price contract type, which places the onus on the contractor to deliver within the agreed-upon price. Transparency is facilitated by the public nature of contract awards, though detailed project progress and specific oversight activities may not always be publicly disclosed. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Military Construction Projects
Base Realignment and Closure (BRAC) Projects
Design-Build Contracts
Federal Infrastructure Spending
Department of Defense Construction Contracts

Risk Flags

Long contract duration may increase exposure to market volatility and technological obsolescence.
Potential for scope creep over the extended performance period.
Firm-fixed-price contracts can lead to disputes if unforeseen conditions arise.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.8 million to HENSEL PHELPS CONSTRUCTION CO. OCAR, PHASE II, BRAC 132 (DESIGN-BUILD SERVICES), FORT BELVOIR, VA

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 $24.8 million.

What is the period of performance?

Start: 2010-09-13. End: 2020-09-13.

What is Hensel Phelps Construction Co.'s track record with similar large-scale federal design-build projects, particularly for the Department of Defense?

Hensel Phelps Construction Co. has a substantial track record with large-scale federal design-build projects, including numerous contracts with the Department of Defense. They have been involved in constructing military barracks, training facilities, administrative buildings, and airfield infrastructure across various bases. Their experience often includes complex projects requiring adherence to stringent military specifications and security protocols. Analyzing their past performance on similar projects, including any past performance evaluations or disputes, would provide further insight into their capability to execute this Fort Belvoir contract successfully. Their history suggests they are a capable contractor for this type of work, but a detailed review of specific past projects would be necessary for a comprehensive assessment.

How does the $24.8 million contract value compare to the average cost of similar design-build projects for military installations of comparable size and scope?

Benchmarking the $24.8 million contract value against similar design-build projects for military installations requires detailed data on project scope, size (square footage), complexity, and location. However, for a project spanning over 10 years with design and construction components, this value is within a plausible range for significant infrastructure development on a military base. Factors influencing cost include the specific types of facilities being designed and built, site conditions, and the prevailing construction market rates in Northern Virginia. Without access to a database of comparable projects with detailed cost breakdowns, a precise comparison is difficult. However, the firm-fixed-price nature and the competitive bidding process suggest the government sought to achieve value for money.

What are the primary risks associated with a firm-fixed-price contract that has a duration of over 10 years?

The primary risks associated with a firm-fixed-price contract of over 10 years revolve around potential changes in economic conditions and unforeseen project complexities. Inflation can erode the value of the fixed price over such an extended period, potentially impacting the contractor's profitability if not adequately accounted for in the initial pricing. Similarly, unforeseen site conditions or changes in regulatory requirements (e.g., environmental, safety) could necessitate design modifications or additional work, leading to potential disputes over scope and cost, despite the fixed-price nature. The contractor bears the risk of cost overruns, but the government risks paying a premium if the initial price was set high to account for long-term uncertainties. Effective contract management and clear change order procedures are crucial to mitigate these risks.

What are the potential implications of this contract on the local workforce and small businesses in the Northern Virginia region?

This contract is likely to have positive implications for the local workforce in the Northern Virginia region, as large construction projects require a substantial number of skilled laborers, tradespeople, engineers, and project managers. Hensel Phelps Construction Co., as the prime contractor, may prioritize hiring locally where feasible. Regarding small businesses, while this contract was not specifically set aside for them, they could benefit indirectly. Small businesses might have opportunities to serve as subcontractors to Hensel Phelps, providing specialized services or materials. Furthermore, the economic activity generated by the project could stimulate demand for goods and services from local small businesses in related sectors, such as suppliers, equipment rental companies, and support services.

How does the 'Commercial and Institutional Building Construction' classification align with the services provided under this contract?

The classification 'Commercial and Institutional Building Construction' (NAICS code 236220) accurately reflects the services provided under this contract. Design-build services for a military installation like Fort Belvoir involve the construction of buildings that serve commercial (e.g., administrative, logistical) and institutional (e.g., barracks, training centers) purposes. This NAICS code encompasses establishments primarily responsible for the construction or alteration of nonresidential buildings, including those for government, commercial, and industrial use. The inclusion of design services within the contract is also typical for modern construction projects within this category, where integrated design-build approaches are common for efficiency and project delivery.

What is the significance of the contract being a 'Definitive Contract' awarded in 2010 with an end date in 2020?

The designation of this award as a 'Definitive Contract' signifies a standard, long-term agreement that outlines the terms and conditions for the provision of goods or services over a specified period. In this case, it's a firm-fixed-price contract for design-build services. Awarded in 2010 and ending in 2020, it represents a substantial, multi-year commitment by the Department of the Army to Hensel Phelps Construction Co. for work at Fort Belvoir. Definitive contracts are typically used when the government has a clear understanding of the requirements and the duration of the need. The long duration (over 3653 days) indicates a significant, ongoing construction or renovation effort rather than a short-term task.

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: W912DR10R0112

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 4437 BROOKFIELD CORP DR, CHANTILLY, VA, 20151

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $24,802,963

Exercised Options: $24,802,963

Current Obligation: $24,789,381

Subaward Activity

Number of Subawards: 42

Total Subaward Amount: $19,569,069

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline