HHS Awards $756M for NIH SRLM Building Construction to Hensel Phelps
Contract Overview
Contract Amount: $756,432,237 ($756.4M)
Contractor: Hensel Phelps Construction CO
Awarding Agency: Department of Health and Human Services
Start Date: 2022-03-22
End Date: 2029-01-25
Contract Duration: 2,501 days
Daily Burn Rate: $302.5K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: FIRM FIXED PRICE
Sector: Construction
Official Description: C103157: SURGERY, RADIOLOGY, AND LABORATORY MEDICINE (SRLM) BUILDING CONSTRUCTION
Place of Performance
Location: BETHESDA, MONTGOMERY County, MARYLAND, 20892
State: Maryland Government Spending
Plain-Language Summary
Department of Health and Human Services obligated $756.4 million to HENSEL PHELPS CONSTRUCTION CO for work described as: C103157: SURGERY, RADIOLOGY, AND LABORATORY MEDICINE (SRLM) BUILDING CONSTRUCTION Key points: 1. The contract value of $756.4 million is substantial, reflecting a major 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 delays and cost overruns. 4. The sector is Commercial and Institutional Building Construction, a significant area of federal spending.
Value Assessment
Rating: fair
The contract value of $756.4 million is a significant investment. Benchmarking against similar large-scale federal building construction projects would be necessary to assess pricing effectiveness.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
Full and open competition was employed, which typically allows for a broad range of bidders and can lead to more competitive pricing. The award to Hensel Phelps suggests they offered the best value under the established criteria.
Taxpayer Impact: The substantial value of this contract represents a significant allocation of taxpayer funds towards infrastructure development.
Public Impact
Construction of a new building for Surgery, Radiology, and Laboratory Medicine at NIH. Potential for job creation in the Maryland region due to the large-scale construction effort. Impact on NIH's research and medical capabilities upon project completion.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Large contract value increases risk of cost overruns.
- Long project duration (2022-2029) increases exposure to market fluctuations.
- Construction projects are inherently complex and prone to unforeseen issues.
Positive Signals
- Full and open competition promotes price discovery.
- Firm fixed price contract provides cost certainty.
- Project supports critical NIH research infrastructure.
Sector Analysis
This contract falls within the Commercial and Institutional Building Construction sector, which is a major component of federal infrastructure spending. Benchmarks for similar large-scale federal building projects would provide context for the $756 million award.
Small Business Impact
The data indicates that small businesses were not directly awarded this prime contract. Further analysis would be needed to determine if small businesses are participating as subcontractors.
Oversight & Accountability
The use of full and open competition and a firm fixed price contract suggests established oversight mechanisms. However, ongoing monitoring will be crucial to manage risks and ensure taxpayer value throughout the project's lifecycle.
Related Government Programs
- Commercial and Institutional Building Construction
- Department of Health and Human Services Contracting
- National Institutes of Health Programs
Risk Flags
- Significant contract value ($756M).
- Long project duration (approx. 7 years).
- Complexity inherent in large-scale building construction.
- Potential for unforeseen site conditions or material cost escalation.
- Dependence on subcontractor performance.
Tags
commercial-and-institutional-building-co, department-of-health-and-human-services, md, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Health and Human Services awarded $756.4 million to HENSEL PHELPS CONSTRUCTION CO. C103157: SURGERY, RADIOLOGY, AND LABORATORY MEDICINE (SRLM) BUILDING CONSTRUCTION
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 $756.4 million.
What is the period of performance?
Start: 2022-03-22. End: 2029-01-25.
What is the estimated cost per square foot for this construction project, and how does it compare to industry benchmarks for similar federal facilities?
The provided data does not include square footage, making a direct cost per square foot calculation impossible. To assess value, one would need to obtain the total square footage of the SRLM building and compare the resulting cost per square foot against established benchmarks for federal medical and research facility construction, considering regional labor and material costs.
What are the key performance indicators (KPIs) being tracked to mitigate risks associated with the long duration and complexity of this construction project?
Specific KPIs are not detailed in the provided data. However, typical KPIs for such projects include adherence to schedule milestones, budget variance, quality control metrics (e.g., defect rates), safety incident rates, and timely resolution of change orders. Robust project management and regular progress reporting against these KPIs are essential for risk mitigation.
How will the effectiveness of the new SRLM building in enhancing NIH's research and medical capabilities be measured post-completion?
Effectiveness will likely be measured by the building's ability to support advanced research and clinical activities as intended. This could include metrics such as the number of research projects initiated, the types of procedures performed, the efficiency of laboratory workflows, and the successful integration of new technologies. User satisfaction surveys and achievement of specific research outcomes could also serve as indicators.
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: 2
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: $756,432,237
Exercised Options: $756,432,237
Current Obligation: $756,432,237
Actual Outlays: $477,526,682
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
Start Date: 2022-03-22
Current End Date: 2029-01-25
Potential End Date: 2029-01-25 00:00:00
Last Modified: 2026-04-07
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