Department of the Army awards $41.5M for construction, with Hensel Phelps Construction Co. securing the contract

Contract Overview

Contract Amount: $41,528,425 ($41.5M)

Contractor: Hensel Phelps Construction CO

Awarding Agency: Department of Defense

Start Date: 2008-06-30

End Date: 2010-04-28

Contract Duration: 667 days

Daily Burn Rate: $62.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: MILITARY BRANCH - EN COF (NORTH) AND SITEWORK; EN COF (SOUTH); MP COF AND SITEWORK- NWD MATOC

Place of Performance

Location: COLORADO SPRINGS, EL PASO County, COLORADO, 80913

State: Colorado Government Spending

Plain-Language Summary

Department of Defense obligated $41.5 million to HENSEL PHELPS CONSTRUCTION CO for work described as: MILITARY BRANCH - EN COF (NORTH) AND SITEWORK; EN COF (SOUTH); MP COF AND SITEWORK- NWD MATOC Key points: 1. The contract value of $41.5 million represents a significant investment in military construction infrastructure. 2. Full and open competition suggests a potentially competitive bidding process, which can drive better pricing. 3. The contract duration of 667 days indicates a substantial project timeline, requiring careful project management. 4. The fixed-price contract type shifts risk to the contractor, potentially stabilizing costs for the government. 5. The project's focus on construction and sitework points to critical infrastructure development for military operations. 6. The award to a single contractor, Hensel Phelps Construction Co., highlights their capacity for large-scale projects.

Value Assessment

Rating: good

The contract value of approximately $41.5 million for military construction and sitework appears reasonable given the scope and duration. Benchmarking against similar large-scale military construction projects would provide a more precise value-for-money assessment. The firm fixed-price nature of the contract suggests that the government has secured a defined cost, with the contractor bearing the risk of cost overruns. However, without specific details on the scope of work and market rates for similar construction services in Colorado, a definitive assessment of pricing competitiveness is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of two bidders suggests a degree of competition, though the exact number of interested parties and the rigor of the bidding process are not detailed. A higher number of bidders typically leads to more competitive pricing and a wider range of innovative solutions. The fact that it was competed fully is a positive sign for price discovery.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to lower prices and better value. It ensures that the government is not limited to a select few contractors, increasing the likelihood of obtaining the best possible deal.

Public Impact

The primary beneficiaries are the Department of the Army and its personnel, who will gain improved or new facilities. The services delivered include the construction of various facilities such as Engineer Construction of the Future (EN COF) and Mission Planning Construction of the Future (MP COF), along with associated sitework. The geographic impact is concentrated in Colorado, where the construction projects will be undertaken. The project will likely have implications for the local construction workforce in Colorado, creating employment opportunities during the project's duration.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if the fixed-price contract does not adequately account for unforeseen construction challenges.
Risk of schedule delays impacting military readiness or operational timelines.
Ensuring the quality of construction meets stringent military standards throughout the 667-day duration.
Managing the environmental impact of large-scale construction activities in the specified region.

Positive Signals

The firm fixed-price contract type provides cost certainty for the government.
Full and open competition suggests a robust process for selecting the most capable and cost-effective contractor.
The award to an established contractor like Hensel Phelps Construction Co. indicates a level of confidence in their ability to execute the project.
The project's focus on future-oriented construction (EN COF, MP COF) suggests strategic investment in long-term military capabilities.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a vital part of the broader construction industry. This sector is characterized by large-scale projects requiring significant capital investment, specialized labor, and adherence to strict building codes and regulations. The Department of Defense is a major client in this sector, frequently awarding contracts for military bases, training facilities, and operational infrastructure. Comparable spending benchmarks in this sector would involve analyzing the cost per square foot or per project for similar military construction endeavors across different branches and agencies.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (sb: false) and there is no indication of small business subcontracting goals being a primary driver (st: CO, likely indicating a prime contractor). This suggests that the primary contractor, Hensel Phelps Construction Co., will likely manage the project with its own resources or through larger subcontractors. The impact on the small business ecosystem would be indirect, potentially through opportunities for specialized trades or material suppliers if they are engaged by the prime contractor, rather than through direct set-aside requirements.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer's representative (COR) from the Department of the Army, responsible for monitoring performance, quality, and compliance. Accountability measures are embedded in the contract terms, including payment schedules tied to milestones and potential penalties for non-performance or delays. Transparency is generally maintained through contract award databases and public reporting, although detailed project-specific oversight reports may not always be publicly accessible. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Military Construction Program
Base Realignment and Closure (BRAC) projects
Department of Defense Facilities Modernization
Engineer Construction Contracts
General Services Administration (GSA) Public Buildings Service

Risk Flags

Potential for cost overruns due to fixed-price nature
Risk of schedule delays impacting military operations
Ensuring adherence to stringent military construction standards
Environmental impact management during construction

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $41.5 million to HENSEL PHELPS CONSTRUCTION CO. MILITARY BRANCH - EN COF (NORTH) AND SITEWORK; EN COF (SOUTH); MP COF AND SITEWORK- NWD MATOC

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 $41.5 million.

What is the period of performance?

Start: 2008-06-30. End: 2010-04-28.

What is the track record of Hensel Phelps Construction Co. on similar Department of Defense contracts?

Hensel Phelps Construction Co. is a well-established general contractor with a significant history of working on large-scale projects, including many for the Department of Defense and other federal agencies. Their portfolio often includes complex military construction, aviation facilities, and institutional buildings. Analyzing their past performance on similar firm-fixed-price contracts, particularly those involving extensive sitework and specialized construction like EN COF and MP COF, would reveal their ability to manage budgets, timelines, and quality standards. Past performance reviews and contract award data from federal procurement databases can provide insights into their reliability, safety records, and any history of disputes or contract modifications. A review of their project history would likely show a pattern of successful delivery on large, complex federal projects, though specific details on cost savings or overruns on individual projects would require deeper data analysis.

How does the awarded amount compare to the estimated cost or initial solicitation value?

The provided data shows the awarded amount as $41,528,424.95. To assess value, this figure needs to be compared against the government's initial estimate or the solicitation's advertised value, if available. If the awarded amount is significantly lower than the estimate, it suggests successful price competition and potential savings for the government. Conversely, if it's close to or exceeds the estimate, it might indicate a less competitive market or a need for re-evaluation of the initial cost projections. Without the solicitation value or estimate, it's difficult to definitively state if this represents a 'good deal' from a price discovery perspective. However, the fact that it was awarded under full and open competition with two bidders suggests that the price achieved was considered acceptable by the government based on the bids received.

What are the key risks associated with a firm-fixed-price contract for this type of construction project?

A firm-fixed-price (FFP) contract shifts the majority of the cost risk to the contractor. For a large construction project like this, key risks include unforeseen site conditions (e.g., unexpected soil issues, underground utilities), material price escalations beyond what was anticipated, labor shortages, or design changes requested by the government. If Hensel Phelps Construction Co. underestimated these risks or if significant unforeseen issues arise, they could incur substantial losses, potentially impacting their financial stability or leading to disputes. Conversely, if they accurately predicted and managed these risks, the FFP structure ensures cost certainty for the Department of the Army. The government's primary risk in an FFP contract is paying a premium for this risk transfer, meaning the price might be higher than a cost-reimbursable contract to account for the contractor's potential downside.

What is the expected impact of these new facilities on the Army's operational capabilities in Colorado?

The contract specifies 'EN COF (NORTH) AND SITEWORK; EN COF (SOUTH); MP COF AND SITEWORK,' which likely refers to Engineer Construction of the Future and Mission Planning Construction of the Future facilities. These types of modernizations suggest an investment in enhancing engineering capabilities and mission planning infrastructure. Improved facilities can lead to increased efficiency, better training environments, enhanced technological integration, and potentially greater operational readiness for the units stationed at or utilizing these locations. The 'sitework' component indicates that the surrounding infrastructure will also be upgraded, which could support new equipment, improved access, or enhanced security. The specific impact depends on the exact nature of the 'Future' capabilities these buildings are designed to support, but generally, such investments aim to modernize and bolster long-term operational effectiveness.

How does the contract duration of 667 days compare to typical construction timelines for similar military projects?

A duration of 667 days, approximately 22 months, is a substantial period for a construction project. For large-scale military construction involving new facilities and extensive sitework, this duration is not uncommon, especially considering potential complexities, environmental reviews, and the need to adhere to stringent military standards. To benchmark, one would compare this to other Department of Defense contracts for similar types of buildings (e.g., barracks, training centers, administrative facilities) of comparable size and scope. Factors influencing duration include the complexity of the design, site accessibility, weather conditions in Colorado, and the phasing of construction. A duration of this length suggests a significant undertaking, and its appropriateness would be judged against the specific project requirements and the contractor's proposed schedule.

What is the significance of the NAICS code 236220 (Commercial and Institutional Building Construction) in understanding this contract?

The North American Industry Classification System (NAICS) code 236220, 'Commercial and Institutional Building Construction,' categorizes the primary business activity of the contractor and the nature of the work performed. This code signifies that the contract involves the construction of new buildings and alterations/renovations to existing buildings that are not primarily residential. This includes a wide range of structures such as office buildings, government facilities, educational institutions, and healthcare facilities. For this Department of Defense contract, it confirms the project's focus on building physical infrastructure intended for non-residential, institutional use, aligning with the development of military bases and operational centers. Understanding this NAICS code helps in benchmarking the contract against industry standards, identifying relevant market data, and assessing the contractor's specialization.

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: 420 6TH AVE, GREELEY, CO, 08

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $41,528,425

Exercised Options: $41,528,425

Current Obligation: $41,528,425

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W912DQ08D0056

IDV Type: IDC

Timeline