Hensel Phelps awarded $117M contract for USGS facilities construction on Hawaii's Big Island

Contract Overview

Contract Amount: $117,001,937 ($117.0M)

Contractor: Hensel Phelps Construction CO

Awarding Agency: Department of the Interior

Start Date: 2022-09-01

End Date: 2026-12-31

Contract Duration: 1,582 days

Daily Burn Rate: $74.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: CONSTRUCTION OF USGS FACILITIES ON BIG ISLAND OF HAWAII

Place of Performance

Location: HONOLULU, HONOLULU County, HAWAII, 96813

State: Hawaii Government Spending

Plain-Language Summary

Department of the Interior obligated $117.0 million to HENSEL PHELPS CONSTRUCTION CO for work described as: CONSTRUCTION OF USGS FACILITIES ON BIG ISLAND OF HAWAII Key points: 1. Contract awarded to a single, highly experienced firm, suggesting a focus on specialized construction capabilities. 2. The firm fixed price structure aims to control costs, but requires careful scope management to avoid change orders. 3. The project duration of over four years indicates a complex and potentially high-risk undertaking. 4. Geographic location in Hawaii may introduce logistical challenges and higher material/labor costs. 5. The contract's value places it in the upper tier for construction projects of this nature.

Value Assessment

Rating: good

The contract value of $117 million for constructing USGS facilities appears reasonable given the scale and complexity of such projects, especially in a remote location like Hawaii. Benchmarking against similar large-scale institutional building projects in high-cost areas would provide a more precise value-for-money assessment. The firm fixed price contract type suggests an expectation of cost control, but the long duration could lead to cost escalations if not managed meticulously.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders were likely considered. With five bids received, the competition level suggests a healthy market interest for this type of federal construction project. This level of competition generally promotes price discovery and can lead to more favorable pricing for the government.

Taxpayer Impact: The full and open competition for this significant construction project is beneficial for taxpayers, as it likely resulted in a more competitive bid and a better overall value compared to a sole-source or limited competition award.

Public Impact

The U.S. Geological Survey (USGS) will benefit from new, modern facilities to support its scientific research and operations. The project will deliver essential infrastructure for scientific endeavors on the Big Island of Hawaii. The geographic impact is concentrated on the Big Island, potentially stimulating local economic activity and employment. The construction phase will create numerous jobs for skilled trades and laborers in Hawaii. The completed facilities will enhance the USGS's capacity for critical research and data collection.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long project duration (over 4 years) increases the risk of cost overruns due to inflation or unforeseen site conditions.
Construction in Hawaii can present unique logistical challenges and higher costs for materials and labor.
Firm fixed price contracts can lead to disputes or change orders if the scope of work is not precisely defined and managed.
Potential for environmental impacts during construction on the Big Island requires careful mitigation.

Positive Signals

Award to a single, established contractor (Hensel Phelps) suggests a high level of confidence in their ability to execute complex projects.
Full and open competition indicates a robust bidding process, likely yielding competitive pricing.
Firm fixed price contract provides cost certainty for the government, assuming effective scope management.
The project supports critical scientific infrastructure for the USGS, aligning with national research priorities.

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 critical infrastructure for government agencies. Comparable projects often involve large-scale, specialized facilities requiring significant engineering and logistical planning, particularly when located in remote or challenging environments like Hawaii. The $117 million value positions this as a major federal construction award.

Small Business Impact

The contract was not set aside for small businesses, and the prime contractor, Hensel Phelps, is a large firm. While there is no explicit small business set-aside, the prime contractor may engage small businesses for subcontracting opportunities. The extent of small business participation will depend on the subcontracting plan developed by Hensel Phelps and the availability of qualified small businesses in Hawaii for specific trades.

Oversight & Accountability

Oversight for this contract will likely be managed by the U.S. Geological Survey and the Department of the Interior's contracting officers. The firm fixed price nature of the contract necessitates rigorous oversight of project milestones, quality control, and adherence to the defined scope to prevent cost creep. Transparency will be maintained through contract reporting mechanisms. The Inspector General for the Department of the Interior may conduct audits or investigations if concerns arise regarding contract performance or financial integrity.

Related Government Programs

USGS Research Facilities
Federal Building Construction
Department of the Interior Construction Projects
Large-Scale Infrastructure Development
Hawaii Construction Contracts

Risk Flags

Long project duration increases risk of cost escalation.
Geographic isolation of Hawaii presents logistical challenges.
Potential for unforeseen site conditions.
Firm fixed price contract requires strict scope management.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Interior awarded $117.0 million to HENSEL PHELPS CONSTRUCTION CO. CONSTRUCTION OF USGS FACILITIES ON BIG ISLAND OF HAWAII

Who is the contractor on this award?

The obligated recipient is HENSEL PHELPS CONSTRUCTION CO.

Which agency awarded this contract?

Awarding agency: Department of the Interior (U.S. Geological Survey).

What is the total obligated amount?

The obligated amount is $117.0 million.

What is the period of performance?

Start: 2022-09-01. End: 2026-12-31.

What is Hensel Phelps Construction Co.'s track record with large federal construction projects, particularly in remote or island locations?

Hensel Phelps Construction Co. is a well-established and reputable general contractor with extensive experience in large-scale federal projects, including infrastructure, aviation, and institutional buildings. They have a history of successfully completing complex projects across various challenging environments. While specific details on their track record in remote island locations like Hawaii would require deeper analysis of their past performance on similar contracts, their general profile suggests they possess the capacity and expertise to manage the logistical and operational demands of such a project. Their past performance data, often available through federal procurement databases, would offer more granular insights into their on-time and on-budget delivery rates for comparable federal endeavors.

How does the $117 million contract value compare to similar USGS facility construction projects or other large institutional buildings in Hawaii?

The $117 million contract value for the USGS facilities on the Big Island of Hawaii is substantial and aligns with the costs typically associated with large-scale institutional or research facility construction, especially in high-cost areas like Hawaii. Benchmarking this against similar projects requires access to detailed cost data for comparable federal or private sector constructions in the region. Factors such as specialized equipment needs, seismic considerations, environmental regulations, and the logistical complexities of material transport to the island significantly influence project costs. Without specific comparable project data, it's challenging to definitively state if this represents exceptional value, but it falls within the expected range for a project of this magnitude and location.

What are the primary risks associated with a construction project of this duration (over 4 years) and value in Hawaii?

The primary risks associated with a construction project of this duration and value in Hawaii include significant exposure to inflation impacting material and labor costs over the extended period. Logistical challenges related to shipping materials and equipment to the island can lead to delays and increased expenses. Furthermore, the potential for unforeseen subsurface conditions, environmental impacts, and the need for specialized labor can introduce complexities. The long timeline also increases the risk of scope creep if not meticulously managed, potentially leading to change orders that drive up the final cost beyond the initial $117 million. Regulatory changes or permitting issues specific to Hawaii could also pose risks.

What specific performance metrics or milestones will be used to assess the success of this construction contract?

The success of this construction contract will likely be assessed through a combination of performance metrics and milestones tied to the project schedule, budget, and quality standards. Key performance indicators (KPIs) will include adherence to the construction timeline, with specific milestones for site preparation, foundation work, structural completion, and final handover. Budget adherence, measured by tracking expenditures against the $117 million firm fixed price, will be critical, with close monitoring of any approved change orders. Quality will be assessed through inspections, adherence to building codes, material testing, and compliance with the technical specifications outlined in the contract. User satisfaction from the U.S. Geological Survey upon occupancy and functionality of the completed facilities will be a crucial final measure of success.

How has federal spending on construction projects in Hawaii trended in recent years, and does this contract align with those trends?

Federal spending on construction projects in Hawaii has historically been influenced by factors such as military base infrastructure needs, scientific research facilities (like those for NOAA and USGS), and disaster recovery efforts. Recent trends may show an increase in infrastructure investment nationally, which could extend to Hawaii. This $117 million contract for USGS facilities aligns with the federal government's ongoing investment in scientific infrastructure. To provide a precise alignment, a detailed analysis of historical federal construction spending data specifically for Hawaii, broken down by agency and project type, would be necessary. However, the award indicates continued federal commitment to supporting scientific operations in the state.

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: 140G0321R0011

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 841 BISHOP ST STE 2001, HONOLULU, HI, 96813

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

Financial Breakdown

Contract Ceiling: $121,410,143

Exercised Options: $117,001,937

Current Obligation: $117,001,937

Actual Outlays: $84,309,728

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline