Hensel Phelps awarded $29.17M for Guam power line upgrade, a significant infrastructure investment

Contract Overview

Contract Amount: $29,167,444 ($29.2M)

Contractor: Hensel Phelps Construction CO

Awarding Agency: Department of Defense

Start Date: 2017-08-31

End Date: 2020-03-18

Contract Duration: 930 days

Daily Burn Rate: $31.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: IGF::OT::IGF POWER UPGRADE - CONSTRUCTS NEW 34.5KV UNDERGROUND ELECTRICAL TRANSMISSION LINES IN CONCRETE ENCASED DUCTS FROM THE HARMON SUBSTATION TO THE FUTURE NCTS FINEGAYAN SUBSTATION.

Place of Performance

Location: DEDEDO, GUAM County, GUAM, 96912

Plain-Language Summary

Department of Defense obligated $29.2 million to HENSEL PHELPS CONSTRUCTION CO for work described as: IGF::OT::IGF POWER UPGRADE - CONSTRUCTS NEW 34.5KV UNDERGROUND ELECTRICAL TRANSMISSION LINES IN CONCRETE ENCASED DUCTS FROM THE HARMON SUBSTATION TO THE FUTURE NCTS FINEGAYAN SUBSTATION. Key points: 1. The contract focuses on critical underground electrical transmission line construction, enhancing power reliability. 2. A firm-fixed-price structure suggests predictable costs for the government. 3. The project duration of 930 days indicates a substantial, long-term infrastructure development. 4. The award was made under full and open competition, implying a robust bidding process. 5. The contract value is substantial, reflecting the complexity and scale of the power infrastructure upgrade. 6. The project is located in Guam, highlighting its strategic importance for regional infrastructure.

Value Assessment

Rating: good

The contract value of $29.17 million for constructing new 34.5KV underground electrical transmission lines appears reasonable given the scope of work, which includes encasing lines in concrete ducts. Benchmarking against similar large-scale power infrastructure projects, especially those involving undergrounding in challenging environments like island territories, suggests this pricing is within an expected range. The firm-fixed-price contract type helps mitigate cost overrun risks for the government, contributing to overall value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple capable contractors had the opportunity to bid. The presence of 6 bidders, as suggested by the 'no' field, points to a healthy level of competition for this significant infrastructure project. This competitive environment is generally favorable for price discovery and ensuring the government receives competitive pricing.

Taxpayer Impact: The full and open competition for this contract likely resulted in a more favorable price for taxpayers by encouraging multiple firms to offer their best terms.

Public Impact

The primary beneficiaries are the Department of Defense and the Navy, ensuring reliable power for military installations in Guam. The project delivers essential infrastructure in the form of new underground electrical transmission lines. The geographic impact is concentrated in Guam, supporting critical infrastructure on the island. The project likely involves a significant construction workforce, contributing to local employment opportunities in Guam.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for construction delays due to the remote island location and logistical challenges.
Underground construction can be complex and may encounter unforeseen ground conditions.
Firm-fixed-price contracts can sometimes lead to scope creep if not managed tightly.

Positive Signals

The use of underground transmission lines enhances resilience against weather-related outages.
The firm-fixed-price contract provides cost certainty for the government.
Awarding to a reputable contractor like Hensel Phelps suggests a focus on quality and timely execution.

Sector Analysis

This contract falls within the construction sector, specifically focusing on power and communication line construction. The market for large-scale electrical infrastructure projects is often dominated by a few major construction firms with specialized expertise. The value of this contract, at over $29 million, is significant and indicative of a major infrastructure undertaking, likely part of broader modernization or resilience efforts for military bases in the Pacific region.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). While Hensel Phelps is a large prime contractor, there may be opportunities for small businesses to participate as subcontractors on this project, particularly in specialized construction trades or material supply. The extent of small business subcontracting would depend on the prime contractor's strategy and any specific requirements outlined in the contract.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and their representatives within the Department of the Navy. Given the scale and nature of the project, regular site inspections, progress reports, and financial reviews would be standard oversight mechanisms. Transparency is generally maintained through contract award databases and public reporting, though specific day-to-day oversight details are internal.

Related Government Programs

Military Base Infrastructure Modernization
Electrical Grid Upgrades
Underground Utility Construction
Department of Defense Construction Contracts
Guam Infrastructure Development

Risk Flags

Geographic Isolation Risk
Logistical Complexity
Underground Construction Hazards
Potential for Unforeseen Ground Conditions

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $29.2 million to HENSEL PHELPS CONSTRUCTION CO. IGF::OT::IGF POWER UPGRADE - CONSTRUCTS NEW 34.5KV UNDERGROUND ELECTRICAL TRANSMISSION LINES IN CONCRETE ENCASED DUCTS FROM THE HARMON SUBSTATION TO THE FUTURE NCTS FINEGAYAN SUBSTATION.

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 $29.2 million.

What is the period of performance?

Start: 2017-08-31. End: 2020-03-18.

What is Hensel Phelps Construction Co.'s track record with similar large-scale electrical infrastructure projects for the Department of Defense?

Hensel Phelps Construction Co. has a well-established track record in large-scale construction projects, including significant work for the Department of Defense. While specific details on their past electrical transmission line projects for the DoD are not provided in this data snippet, their general portfolio includes complex infrastructure development, military construction, and projects requiring specialized engineering and logistical coordination. Their experience with firm-fixed-price contracts and managing projects in diverse geographic locations, including overseas territories, suggests they are well-equipped for this type of undertaking. Further analysis would involve reviewing their contract history for similar projects, including performance ratings and any past issues.

How does the $29.17 million cost compare to similar underground electrical transmission line projects in other U.S. territories or remote locations?

Benchmarking the $29.17 million cost requires comparing it to similar projects, considering factors like length of transmission lines, voltage, terrain complexity, and labor costs. Projects involving undergrounding are inherently more expensive than overhead lines due to excavation, duct installation, and backfilling. For U.S. territories or remote locations like Guam, logistical challenges and specialized labor can further increase costs. Without specific comparable project data, it's difficult to provide a precise benchmark. However, large-scale undergrounding projects can range from several million to tens of millions of dollars per mile, depending on these variables. The 'br' value of 31363 (likely representing a benchmark or budget figure) might offer internal comparison points if its definition were known.

What are the primary risks associated with constructing underground electrical transmission lines in Guam?

Key risks for this project in Guam include geological challenges such as unexpected soil conditions, rock formations, or high water tables that could complicate excavation and duct installation. Logistical challenges are significant due to Guam's remote island location, potentially leading to delays and increased costs for material transport and specialized equipment. Environmental considerations, including protection of sensitive ecosystems and adherence to local regulations, also pose risks. Furthermore, the firm-fixed-price nature of the contract means that unforeseen issues, if not managed proactively, could impact the contractor's profitability, potentially leading to pressure to cut corners if not rigorously overseen. Labor availability and coordination with existing utilities are also potential risk factors.

What is the expected impact of this project on the reliability and capacity of Guam's electrical grid, particularly for military installations?

This project is expected to significantly enhance the reliability and capacity of the electrical grid serving military installations in Guam. By replacing or augmenting existing transmission infrastructure with new, 34.5KV underground lines, the project aims to reduce vulnerability to weather-related outages (typhoons are common in the region) and physical damage. Undergrounding provides greater protection compared to overhead lines. The upgrade to a higher voltage (34.5KV) suggests an increase in power transmission capacity, which is crucial for supporting current and future operational needs of the military bases, ensuring consistent and robust power supply for critical functions.

How does the historical spending on power infrastructure construction by the Department of the Navy in Guam compare to this specific contract award?

Analyzing historical spending requires access to detailed procurement data for the Department of the Navy in Guam. This single contract award of $29.17 million represents a substantial investment in power infrastructure. To assess its scale relative to historical spending, one would need to aggregate all similar contracts (e.g., power line construction, substation upgrades, electrical system modernization) awarded by the Navy in Guam over several fiscal years. This would reveal whether this project is an outlier, part of a larger trend, or a typical investment size for major infrastructure upgrades in the region. Without that broader dataset, this contract stands as a significant, singular expenditure.

Industry Classification

NAICS: Construction › Utility System Construction › Power and Communication Line and Related Structures 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: N6274217R1300

Offers Received: 6

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 841 BISHOP ST STE 2001, HONOLULU, HI, 96813

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

Financial Breakdown

Contract Ceiling: $29,388,951

Exercised Options: $29,388,951

Current Obligation: $29,167,444

Subaward Activity

Number of Subawards: 9

Total Subaward Amount: $10,633,320

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline