Naval Weapons Station Seal Beach contract awarded to Hensel Phelps Construction Co. for $28M for surveillance and test laboratory
Contract Overview
Contract Amount: $28,020,452 ($28.0M)
Contractor: Hensel Phelps Construction CO
Awarding Agency: Department of Defense
Start Date: 2013-09-30
End Date: 2016-06-16
Contract Duration: 990 days
Daily Burn Rate: $28.3K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 7
Pricing Type: FIRM FIXED PRICE
Sector: Construction
Official Description: IGF::OT::IGF DESIGN-BUILD PROJECT FOR P-229 WEAPONS SURVEILLANCE AND TEST LABORATORY AND CALIBRATION LABORATORY AT NAVAL WEAPONS STATION (NWS) SEAL BEACH, CA COMMERCIAL&INSTITUTIONAL SOUTH II MACC
Place of Performance
Location: SEAL BEACH, ORANGE County, CALIFORNIA, 90740
Plain-Language Summary
Department of Defense obligated $28.0 million to HENSEL PHELPS CONSTRUCTION CO for work described as: IGF::OT::IGF DESIGN-BUILD PROJECT FOR P-229 WEAPONS SURVEILLANCE AND TEST LABORATORY AND CALIBRATION LABORATORY AT NAVAL WEAPONS STATION (NWS) SEAL BEACH, CA COMMERCIAL&INSTITUTIONAL SOUTH II MACC Key points: 1. The contract was awarded under a full and open competition, indicating a broad market solicitation. 2. The project involved the design and construction of a weapons surveillance and test laboratory, crucial for defense readiness. 3. The fixed-price contract type suggests a defined scope and cost control measures. 4. The duration of the project was approximately 990 days, indicating a significant construction undertaking. 5. The contract was awarded to a single entity, Hensel Phelps Construction Co., suggesting they were the most competitive bidder. 6. The project falls under the Commercial and Institutional Building Construction sector.
Value Assessment
Rating: good
The contract value of approximately $28 million for a design-build laboratory project appears reasonable within the context of large-scale construction. Benchmarking against similar defense infrastructure projects would provide a more precise value-for-money assessment. The firm-fixed-price structure helps manage cost overruns, but the final cost relative to initial estimates is not detailed here. Without specific cost breakdowns or comparisons to similar facilities, a definitive value assessment is challenging, but the competitive award suggests a fair market price was likely achieved.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded through a full and open competition, meaning all responsible sources were permitted to submit a bid. The presence of 7 bidders (indicated by 'no': 7) suggests a healthy level of competition for this significant defense construction project. A competitive environment like this typically drives down prices and encourages contractors to offer their best value propositions to secure the award.
Taxpayer Impact: A full and open competition ensures that taxpayer dollars are used efficiently by fostering a competitive bidding process that aims to secure the best price and quality for the government.
Public Impact
The primary beneficiaries are the Department of the Navy and the Naval Weapons Station Seal Beach, which will receive enhanced testing and surveillance capabilities. The project delivers a specialized laboratory facility essential for maintaining and improving weapons systems. The geographic impact is localized to Seal Beach, California, supporting regional defense operations. The construction phase likely created temporary employment opportunities in the local construction workforce.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns if unforeseen site conditions or design changes arise, despite the fixed-price nature.
- Dependence on a single contractor for the entire design-build process could lead to risks if performance issues emerge.
- The long duration of the project increases exposure to market fluctuations in material and labor costs.
Positive Signals
- The firm-fixed-price contract type provides cost certainty for the government.
- The full and open competition with multiple bidders suggests a robust selection process.
- The project addresses a critical need for enhanced surveillance and testing capabilities at a key naval facility.
Sector Analysis
This contract falls within the Commercial and Institutional Building Construction sector, a significant segment of the construction industry. Projects of this nature, particularly those for defense installations, often involve specialized requirements and stringent quality controls. The market for defense construction is characterized by large contracts, often awarded through competitive bidding processes, and requires contractors with proven experience in secure and complex environments. The $28 million value is substantial for a single facility construction project.
Small Business Impact
The contract details indicate that small business participation was not a specific set-aside (ss: false, sb: false). While Hensel Phelps Construction Co. is a large business, there may be opportunities for small businesses to participate as subcontractors. The extent of small business subcontracting would depend on the prime contractor's strategy and any flow-down requirements, which are not detailed in this summary.
Oversight & Accountability
Oversight for this contract would typically be managed by the Naval Facilities Engineering Command (NAVFAC) or a designated contracting officer's representative (COR) within the Department of the Navy. Accountability measures are inherent in the firm-fixed-price contract, requiring delivery of the specified facility. Transparency is generally maintained through contract award announcements and reporting, though detailed project progress and financial oversight are internal government functions.
Related Government Programs
- Naval Facilities Engineering Command (NAVFAC) Construction Projects
- Department of Defense Infrastructure Modernization
- Weapons Systems Testing and Evaluation Facilities
- Large-Scale Design-Build Construction Contracts
Risk Flags
- Potential for cost overruns due to change orders
- Risk of contractor performance issues impacting schedule
- Dependence on specialized technical expertise for laboratory functions
Tags
construction, department-of-defense, department-of-the-navy, naval-weapons-station-seal-beach, california, full-and-open-competition, firm-fixed-price, design-build, laboratory-construction, weapons-surveillance, large-contract, commercial-institutional-building
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $28.0 million to HENSEL PHELPS CONSTRUCTION CO. IGF::OT::IGF DESIGN-BUILD PROJECT FOR P-229 WEAPONS SURVEILLANCE AND TEST LABORATORY AND CALIBRATION LABORATORY AT NAVAL WEAPONS STATION (NWS) SEAL BEACH, CA COMMERCIAL&INSTITUTIONAL SOUTH II MACC
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 Navy).
What is the total obligated amount?
The obligated amount is $28.0 million.
What is the period of performance?
Start: 2013-09-30. End: 2016-06-16.
What is the track record of Hensel Phelps Construction Co. on similar government contracts?
Hensel Phelps Construction Co. is a well-established general contractor with extensive experience in large-scale construction projects, including many for government and defense clients. They have a history of undertaking complex projects such as laboratories, research facilities, and operational buildings. While specific performance metrics for past defense contracts are not detailed here, their consistent ability to win and execute large federal contracts suggests a generally positive track record. A deeper dive into past performance evaluations and any past performance issues would be necessary for a comprehensive assessment of their reliability on this specific project.
How does the awarded price compare to similar laboratory construction projects for the Department of Defense?
The awarded price of approximately $28 million for the P-229 Weapons Surveillance and Test Laboratory and Calibration Laboratory at Naval Weapons Station Seal Beach, CA, needs to be benchmarked against comparable projects. Factors such as facility size (square footage), complexity of specialized equipment, specific security requirements, and geographic location significantly influence costs. Without access to detailed cost breakdowns or a database of similar DoD laboratory construction projects with known cost per square foot or per specialized function, a precise comparison is difficult. However, given the firm-fixed-price nature and full and open competition with 7 bidders, it suggests the price was deemed competitive and fair at the time of award.
What are the primary risks associated with this design-build contract?
The primary risks associated with this design-build contract include potential scope creep if the initial design is not fully comprehensive, leading to change orders that could increase costs despite the fixed-price structure. There's also a risk related to the contractor's ability to meet the specific technical requirements for a weapons surveillance and test laboratory, which may involve highly specialized equipment and environmental controls. Furthermore, the long project duration (990 days) exposes the project to risks associated with material price volatility, labor availability, and potential delays due to unforeseen site conditions or regulatory changes. The concentration of design and construction responsibility with one entity (Hensel Phelps) also means that any performance issues could impact the entire project timeline and outcome.
How effective is the firm-fixed-price contract type in managing costs for this type of project?
The firm-fixed-price (FFP) contract type is generally considered effective for managing costs on projects where the scope of work can be clearly defined upfront, such as the construction of a laboratory facility. It shifts the risk of cost overruns to the contractor, providing the government with a high degree of cost certainty. For this project, the FFP structure incentivizes Hensel Phelps Construction Co. to control costs efficiently to maximize their profit margin. However, the effectiveness can be diminished if unforeseen issues necessitate significant change orders, which can add complexity and potentially increase the overall cost beyond the initial fixed price. Robust initial design and scope definition are crucial for maximizing the cost-control benefits of an FFP contract.
What is the historical spending pattern for similar facilities at Naval Weapons Station Seal Beach?
Analyzing historical spending patterns for similar facilities at Naval Weapons Station Seal Beach would provide valuable context for this $28 million contract. Without specific data on past construction projects at this particular base, it's challenging to establish a trend. However, defense installations often undergo periodic upgrades and expansions of specialized facilities like laboratories. If this contract represents a new build or a significant upgrade, it could be part of a larger modernization effort. Understanding the frequency and cost of previous similar projects would help determine if this contract's value is consistent with historical investment levels or represents a significant increase or decrease in spending for such infrastructure.
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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Solicitation ID: N6247309R1608
Offers Received: 7
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 18850 VON KARMAN AVE STE 100, IRVINE, CA, 92612
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $28,020,452
Exercised Options: $28,020,452
Current Obligation: $28,020,452
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N6247310D5405
IDV Type: IDC
Timeline
Start Date: 2013-09-30
Current End Date: 2016-06-16
Potential End Date: 2016-06-16 00:00:00
Last Modified: 2015-10-22
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