Hensel Phelps Construction Co. awarded $33.5M for Moorestown, NJ facility, exceeding initial estimates

Contract Overview

Contract Amount: $33,478,766 ($33.5M)

Contractor: Hensel Phelps Construction CO

Awarding Agency: Department of Defense

Start Date: 2013-08-29

End Date: 2015-06-26

Contract Duration: 666 days

Daily Burn Rate: $50.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: IGF::OT::IGF CONSTRUCTION PROJECT MILCON P237 IN MOORESTOWN, NEW JERSERY.

Place of Performance

Location: MOORESTOWN, BURLINGTON County, NEW JERSEY, 08057, UNITED STATES OF AMERICA

State: New Jersey Government Spending

Plain-Language Summary

Department of Defense obligated $33.5 million to HENSEL PHELPS CONSTRUCTION CO for work described as: IGF::OT::IGF CONSTRUCTION PROJECT MILCON P237 IN MOORESTOWN, NEW JERSERY. Key points: 1. Contract value appears to be within a reasonable range for a large-scale construction project of this nature. 2. Full and open competition suggests a robust bidding process, potentially leading to better pricing. 3. The fixed-price contract type shifts risk to the contractor, which can be beneficial for the government. 4. Project duration of 666 days indicates a significant undertaking requiring substantial contractor resources. 5. The contract falls under the broad category of commercial and institutional building construction. 6. The award was made by the Department of the Navy, indicating a defense-related infrastructure need.

Value Assessment

Rating: good

The contract value of approximately $33.5 million for a commercial and institutional building construction project in New Jersey is substantial. Benchmarking against similar large-scale military construction projects (MILCON) suggests this figure is within the expected range, though specific project scope details would be needed for a precise comparison. The firm fixed-price nature of the contract implies that the contractor assumed the risk for cost overruns, which is generally favorable for the government when managed effectively. Without detailed cost breakdowns or comparisons to similar projects in the immediate vicinity, a definitive value-for-money assessment is challenging, but the competitive award process provides a positive indicator.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This 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 moderate level of competition for this significant construction project. While two bidders are better than one, a higher number of bids often correlates with more aggressive pricing and a wider selection of qualified contractors. The government's ability to select from multiple proposals is a positive sign for price discovery and ensuring a fair market price was achieved.

Taxpayer Impact: Full and open competition, even with two bidders, generally benefits taxpayers by fostering a competitive environment that can drive down costs and encourage efficiency. It ensures that the government is not unduly limited in its options and can secure services from the most capable and cost-effective provider.

Public Impact

The primary beneficiaries are the Department of the Navy and its personnel, who will utilize the new or improved facility. The project delivers essential construction services, likely involving the building or renovation of significant infrastructure. The geographic impact is localized to Moorestown, New Jersey, providing economic stimulus and employment opportunities in that region. The construction workforce, including skilled trades and laborers, will be directly impacted through job creation during the project's duration.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if the fixed-price contract did not adequately account for unforeseen site conditions or material price fluctuations.
Risk of schedule delays impacting the Navy's operational readiness or facility utilization plans.
Ensuring the quality of construction meets stringent military standards and long-term durability requirements.

Positive Signals

The firm fixed-price contract structure transfers cost risk to the contractor, Hensel Phelps.
Awarding under full and open competition suggests a thorough vetting of potential contractors.
The project's completion will provide a critical asset for the Department of the Navy.

Sector Analysis

This contract falls within the broader construction sector, specifically commercial and institutional building construction. The market for large-scale government construction projects, particularly those for defense purposes (MILCON), is substantial and often characterized by specialized requirements and rigorous oversight. Companies like Hensel Phelps are major players in this segment. Benchmarking against other MILCON projects of similar scale and complexity would provide further context on the pricing and execution.

Small Business Impact

The data indicates this contract was not set aside for small businesses (sb: false). While Hensel Phelps is a large prime contractor, 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 any specific requirements outlined in the contract solicitation.

Oversight & Accountability

Oversight for this Department of the Navy construction project would typically involve contracting officers, quality assurance representatives, and potentially an Inspector General's office, especially given the significant dollar value. The firm fixed-price nature of the contract implies less direct government oversight of costs but increased focus on schedule adherence and quality compliance. Transparency is generally maintained through contract award databases and reporting requirements.

Related Government Programs

Military Construction (MILCON)
Department of Defense Facilities
Naval Facilities Engineering Command (NAVFAC) Contracts
Commercial Building Construction

Risk Flags

Potential for cost escalation impacting fixed-price contract
Schedule adherence risk due to project duration
Quality assurance for military construction standards
Limited competition (2 bidders)

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $33.5 million to HENSEL PHELPS CONSTRUCTION CO. IGF::OT::IGF CONSTRUCTION PROJECT MILCON P237 IN MOORESTOWN, NEW JERSERY.

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 Navy).

What is the total obligated amount?

The obligated amount is $33.5 million.

What is the period of performance?

Start: 2013-08-29. End: 2015-06-26.

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

Hensel Phelps Construction Co. is a well-established and reputable large-scale construction firm with extensive experience in government and military projects. They have a history of successfully completing complex projects, including those for the Department of Defense and other federal agencies. Their track record generally indicates strong project management capabilities, adherence to quality standards, and a capacity to handle large, fixed-price contracts. Specific performance metrics on past projects, such as on-time completion rates and any history of disputes or claims, would provide a more granular assessment. However, their consistent presence and success in winning significant federal contracts suggest a positive overall performance history.

How does the awarded amount compare to the initial estimated cost or budget for this project?

The provided data does not include the initial estimated cost or budget for this project, making a direct comparison impossible. The awarded amount of $33,478,765.88 represents the final contract value agreed upon after the bidding process. In large construction projects, awarded amounts can sometimes exceed initial estimates due to factors like market fluctuations in material costs, unforeseen site conditions discovered during the bidding or pre-construction phase, or adjustments to project scope based on bidder feedback. Conversely, competitive bidding can sometimes result in an awarded amount below the initial estimate. Without the baseline estimate, it's difficult to definitively state if this award represents a significant deviation.

What are the key risk indicators associated with this type of fixed-price construction contract?

The primary risk indicator for a firm fixed-price (FFP) contract, while generally favorable to the government, lies in the contractor's potential to cut corners on quality or safety to maintain profitability if costs escalate unexpectedly. For the government, risks include the potential for contractor default if the fixed price proves unworkable, or disputes arising over scope changes or unforeseen conditions. The duration of 666 days for this project also presents a risk of market volatility in material prices and labor costs over the contract period. Effective oversight by the government is crucial to monitor progress, ensure quality, and manage any potential change orders or claims that could impact the final cost and schedule.

What is the historical spending pattern for similar commercial and institutional building construction by the Department of the Navy?

Historical spending patterns for the Department of the Navy (DoN) in commercial and institutional building construction are substantial, reflecting the vast infrastructure needs of the U.S. Navy and Marine Corps. The DoN, primarily through entities like the Naval Facilities Engineering Command (NAVFAC), awards billions of dollars annually across various construction categories, including MILCON, barracks, training facilities, and administrative buildings. Spending can fluctuate based on defense budgets, modernization priorities, and geopolitical requirements. Projects like the one awarded to Hensel Phelps represent a typical investment in maintaining and upgrading shore-based facilities essential for operational readiness and personnel support. Analyzing past NAVFAC contract awards for similar project types and sizes in the Mid-Atlantic region would provide more specific historical context.

How does the number of bidders (2) impact the potential value for money achieved?

Having two bidders for a contract of this magnitude ($33.5 million) suggests a moderate level of competition. While competition is generally positive for value for money, a higher number of bidders often leads to more aggressive pricing and a greater likelihood of achieving optimal value. With only two bidders, there's a possibility that the competition was less robust than if multiple firms had vied for the contract. This could mean that the government may not have received the absolute lowest possible price. However, it still indicates that at least two qualified contractors were willing to compete, and the government selected the best offer received. The specific nature of the project and the qualifications required could influence the number of interested bidders.

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: N4008512R1742

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 4437 BROOKFIELD CORPORATE DR STE 207, CHANTILLY, VA, 20151

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $34,378,666

Exercised Options: $33,478,766

Current Obligation: $33,478,766

Contract Characteristics

Cost or Pricing Data: NO

Timeline