Hensel Phelps Construction Co. awarded $12.8M for ATCT Building construction, highlighting strong competition

Contract Overview

Contract Amount: $12,840,314 ($12.8M)

Contractor: Hensel Phelps Construction CO.

Awarding Agency: Department of Transportation

Start Date: 2008-07-15

End Date: 2010-09-14

Contract Duration: 791 days

Daily Burn Rate: $16.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: ATCT BUILDING

Place of Performance

Location: GREELEY, WELD County, COLORADO, 80631

State: Colorado Government Spending

Plain-Language Summary

Department of Transportation obligated $12.8 million to HENSEL PHELPS CONSTRUCTION CO. for work described as: ATCT BUILDING Key points: 1. Contract value of $12.8 million for a single building project. 2. Awarded under full and open competition, suggesting a robust bidding process. 3. Firm Fixed Price contract type indicates defined costs and limited risk of overruns for the government. 4. Project duration of 791 days (approx. 2 years) for construction. 5. The contract falls under commercial and institutional building construction. 6. Awarded by the Federal Aviation Administration, part of the Department of Transportation.

Value Assessment

Rating: good

The contract value of $12.8 million for the ATCT Building appears reasonable for a construction project of this scale and duration. Benchmarking against similar large-scale institutional building projects would provide a more precise value-for-money assessment. The firm fixed-price nature of the contract helps control costs, but the final value depends on the scope and quality of the completed structure.

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 a bid. With 3 bids received, the competition level suggests a healthy market interest and provides the government with a basis for price discovery. This competitive environment generally leads to more favorable pricing for the government.

Taxpayer Impact: Taxpayers benefit from a competitive bidding process that drives down costs and ensures the government receives fair market value for the construction services.

Public Impact

The primary beneficiaries are the Federal Aviation Administration and potentially air traffic controllers who will utilize the new ATCT building. The service delivered is the construction of a critical air traffic control tower building. The geographic impact is specific to the location of the ATCT, likely an airport facility. Workforce implications include employment for construction workers, engineers, and project managers involved in the building process.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for construction delays impacting operational readiness.
Risk of unforeseen site conditions requiring change orders.
Ensuring compliance with all building codes and FAA specifications.

Positive Signals

Firm Fixed Price contract limits cost escalation.
Full and open competition suggests competitive pricing.
Experienced contractor (Hensel Phelps) likely brings expertise.

Sector Analysis

The construction sector is a significant part of the federal spending landscape, encompassing a wide range of projects from infrastructure to specialized facilities. This contract for an Air Traffic Control Tower (ATCT) building falls within the commercial and institutional building construction sub-sector. Federal spending in this area is often driven by modernization efforts, capacity expansion, and replacement of aging facilities. Comparable spending benchmarks would involve analyzing other large-scale government building projects, considering factors like square footage, complexity, and location.

Small Business Impact

This contract was awarded under full and open competition and does not indicate any specific small business set-aside. While Hensel Phelps is a large construction firm, there may be opportunities for small businesses to participate as subcontractors on this project. The extent of small business subcontracting would depend on the prime contractor's strategy and federal subcontracting requirements.

Oversight & Accountability

Oversight for this construction contract would typically involve project managers from the Federal Aviation Administration, ensuring adherence to the contract's terms, specifications, and schedule. Accountability measures are built into the firm fixed-price structure, incentivizing the contractor to complete the project within budget. Transparency is generally maintained through contract award databases and reporting requirements, though specific oversight details are not provided.

Related Government Programs

FAA Air Traffic Control Tower Modernization Programs
Federal Building Construction Contracts
Department of Transportation Capital Improvement Projects

Risk Flags

Potential for cost overruns if scope is not well-defined.
Risk of project delays impacting FAA operations.
Ensuring compliance with specialized aviation construction standards.

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $12.8 million to HENSEL PHELPS CONSTRUCTION CO.. ATCT BUILDING

Who is the contractor on this award?

The obligated recipient is HENSEL PHELPS CONSTRUCTION CO..

Which agency awarded this contract?

Awarding agency: Department of Transportation (Federal Aviation Administration).

What is the total obligated amount?

The obligated amount is $12.8 million.

What is the period of performance?

Start: 2008-07-15. End: 2010-09-14.

What is the track record of Hensel Phelps Construction Co. on similar federal construction projects?

Hensel Phelps Construction Co. is a well-established and reputable general contractor with extensive experience in large-scale federal projects, including aviation facilities and institutional buildings. A review of their past performance on similar FAA or Department of Defense contracts would reveal their history of on-time and on-budget delivery, quality of work, and any past disputes or contract modifications. Their significant presence in the federal construction market suggests a strong understanding of government contracting requirements and a capacity to manage complex projects effectively. Specific data on past performance metrics, such as CPARS ratings, would offer a more granular view of their reliability and competence.

How does the awarded price compare to similar ATCT construction projects?

Direct comparison of the $12.8 million award for this ATCT building to similar projects is challenging without detailed project specifications, location, and scope. However, the number of bids (3) under full and open competition suggests that the pricing was likely competitive within the market for such specialized construction. Factors influencing cost include the size of the facility, technological integration requirements, site-specific conditions, and local labor costs. Benchmarking against other FAA ATCT construction projects awarded over the past five years, adjusted for inflation and regional economic differences, would provide a more robust assessment of value for money. The firm fixed-price nature of the contract also implies that the government secured a defined cost upfront.

What are the primary risks associated with this construction contract?

The primary risks associated with this firm fixed-price construction contract include potential construction delays due to unforeseen site conditions, weather, or supply chain disruptions, which could impact the operational readiness of the air traffic control facility. There is also a risk of scope creep if the requirements are not clearly defined or if changes are introduced during the project lifecycle, potentially leading to disputes or change orders, although the FFP structure aims to mitigate this. Ensuring the contractor's adherence to stringent FAA safety and technical specifications is critical. Furthermore, the availability of skilled labor in the project's geographic area could pose a risk to timely completion. The government's risk is primarily related to ensuring the final product meets all functional and safety requirements.

How effective is the firm fixed-price contract type in managing costs for this project?

The firm fixed-price (FFP) contract type is generally considered effective in managing costs for construction projects like this ATCT building, as it shifts the majority of the cost risk to the contractor. Under an FFP agreement, the contractor is obligated to complete the work for a predetermined price, regardless of their actual costs. This incentivizes the contractor to be efficient and control their expenses. For the government, it provides cost certainty, making budgeting more predictable. However, the effectiveness relies on a well-defined scope of work at the outset; poorly defined requirements can lead to change orders, which, while managed, can increase the overall cost and administrative burden. The government must also ensure robust oversight to verify that the contractor is meeting all contractual obligations.

What is the historical spending trend for ATCT construction by the FAA?

Analyzing historical spending trends for ATCT construction by the FAA is crucial for understanding budget allocation and identifying patterns in investment. While specific aggregate data for ATCT construction alone is not readily available in this context, the FAA consistently invests in infrastructure, including air traffic control facilities, to maintain and modernize the national airspace system. Spending in this category fluctuates based on the agency's capital improvement plans, the age of existing facilities, and technological advancements requiring new infrastructure. Periods of significant modernization or expansion often see higher spending. Examining broader FAA infrastructure budgets and capital improvement plans over several fiscal years would provide context for the significance of individual ATCT projects like this one.

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

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Hensel Phelps Construction CO (UEI: 063322085)

Address: 444 N 44TH ST STE 105, PHOENIX, AZ, 90

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

Financial Breakdown

Contract Ceiling: $223,520,000

Exercised Options: $12,840,314

Current Obligation: $12,840,314

Timeline