Hensel Phelps Construction Awarded $181M NIH Laboratory Expansion in Maryland

Contract Overview

Contract Amount: $181,011,964 ($181.0M)

Contractor: Hensel Phelps Construction CO

Awarding Agency: Department of Health and Human Services

Start Date: 2021-11-24

End Date: 2026-04-27

Contract Duration: 1,615 days

Daily Burn Rate: $112.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: C103754 - VRC LABORATORY EXPANSION, BUILDING 40A NORTH TOWER, BETHESDA

Place of Performance

Location: BETHESDA, MONTGOMERY County, MARYLAND, 20892

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $181.0 million to HENSEL PHELPS CONSTRUCTION CO for work described as: C103754 - VRC LABORATORY EXPANSION, BUILDING 40A NORTH TOWER, BETHESDA Key points: 1. The contract value of $181 million is significant for a single construction project. 2. Full and open competition was utilized, suggesting a competitive bidding process. 3. The project carries risks associated with large-scale construction, including potential cost overruns and schedule delays. 4. The sector is Commercial and Institutional Building Construction, a vital area for infrastructure development.

Value Assessment

Rating: good

The contract is a firm-fixed-price delivery order, which typically provides good price certainty. Benchmarking against similar large-scale institutional building construction projects would be necessary for a more precise value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The use of full and open competition suggests a robust price discovery process. Multiple bids were likely received, driving the price towards a competitive level.

Taxpayer Impact: The firm-fixed-price contract aims to control costs, but the overall value of $181 million represents a substantial taxpayer investment in research infrastructure.

Public Impact

Enhances critical research infrastructure for the National Institutes of Health. Supports advanced laboratory facilities, potentially leading to scientific breakthroughs. Creates construction jobs and stimulates economic activity in Maryland. Ensures modern facilities for vital public health research.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Large contract value increases risk exposure.
Long duration (1615 days) presents schedule and cost escalation risks.
Firm-fixed-price contracts can shift risk to the contractor, potentially leading to higher initial bids.

Positive Signals

Full and open competition promotes cost efficiency.
Delivery order structure for a specific project.
Fixed-price contract provides budget predictability.

Sector Analysis

This project falls within the Commercial and Institutional Building Construction sector, which is crucial for developing public facilities. The $181 million value is substantial, reflecting the scale and complexity of building specialized research laboratories.

Small Business Impact

The data indicates that small businesses were not directly awarded this prime contract, as the awardee is Hensel Phelps Construction Co. Further analysis would be needed to determine if small businesses are involved as subcontractors.

Oversight & Accountability

The use of full and open competition is a positive oversight mechanism. However, ongoing monitoring of project progress, budget adherence, and quality control by the Department of Health and Human Services is essential for accountability.

Related Government Programs

Commercial and Institutional Building Construction
Department of Health and Human Services Contracting
National Institutes of Health Programs

Risk Flags

Large contract value.
Long project duration.
Firm-fixed-price contract can lead to higher initial bids.
Potential for unforeseen site conditions in large construction.
Reliance on specific subcontractors.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $181.0 million to HENSEL PHELPS CONSTRUCTION CO. C103754 - VRC LABORATORY EXPANSION, BUILDING 40A NORTH TOWER, BETHESDA

Who is the contractor on this award?

The obligated recipient is HENSEL PHELPS CONSTRUCTION CO.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (National Institutes of Health).

What is the total obligated amount?

The obligated amount is $181.0 million.

What is the period of performance?

Start: 2021-11-24. End: 2026-04-27.

What is the estimated cost per square foot for this laboratory expansion, and how does it compare to similar NIH or other federal laboratory construction projects?

Without specific square footage data, a precise per-square-foot cost cannot be calculated. However, the total contract value of $181 million for a major laboratory expansion suggests a significant investment. Benchmarking against similar projects would require detailed cost breakdowns and facility size information to determine if the pricing is competitive and efficient for the scope of work.

What are the primary risks associated with a project of this magnitude and duration, and what mitigation strategies are in place?

Major risks include potential cost overruns due to material price fluctuations, labor shortages, unforeseen site conditions, and schedule delays. Mitigation strategies likely involve robust project management, contingency planning, detailed scheduling, and strong contract oversight by NIH to ensure adherence to scope, budget, and timeline. The firm-fixed-price nature also places some risk on the contractor.

How effectively does this contract leverage competition to ensure the best value for taxpayer dollars, considering the firm-fixed-price structure?

The contract's 'full and open competition' designation is a strong indicator of efforts to achieve best value. This process typically involves multiple qualified bidders competing, which should drive down prices. The firm-fixed-price structure further locks in costs, providing budget certainty. However, the initial bid price reflects the contractor's assessment of risk and profit, so ongoing oversight is still crucial.

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

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1600 TYSONS BLVD STE 800, TYSONS CORNER, VA, 22102

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

Financial Breakdown

Contract Ceiling: $181,011,964

Exercised Options: $181,011,964

Current Obligation: $181,011,964

Actual Outlays: $123,040,295

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 75N99019D00016

IDV Type: IDC

Timeline