Hensel Phelps Construction Co. awarded $24.6M for Guam Central Fuel Station, a significant investment in Navy infrastructure

Contract Overview

Contract Amount: $24,632,155 ($24.6M)

Contractor: Hensel Phelps Construction CO

Awarding Agency: Department of Defense

Start Date: 2021-03-15

End Date: 2025-03-19

Contract Duration: 1,465 days

Daily Burn Rate: $16.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: FY21 P-311 CENTRAL FUEL STATION

Place of Performance

Location: YIGO, GUAM County, GUAM, 96929

Plain-Language Summary

Department of Defense obligated $24.6 million to HENSEL PHELPS CONSTRUCTION CO for work described as: FY21 P-311 CENTRAL FUEL STATION Key points: 1. The contract value represents a substantial commitment to enhancing fuel logistics capabilities. 2. Competition dynamics for this project are assessed to understand pricing efficiency. 3. Risk indicators are evaluated based on project duration and contract type. 4. Performance context is derived from the project's role in supporting naval operations. 5. The contract positions the Navy to secure essential fuel supply infrastructure in the Pacific. 6. The firm-fixed-price structure aims to control costs for the government.

Value Assessment

Rating: good

The contract value of $24.6 million for a central fuel station in Guam appears reasonable given the scale and strategic importance of such infrastructure in a remote location. Benchmarking against similar large-scale construction projects for military bases, particularly those involving fuel storage and distribution, would provide a more precise value-for-money assessment. The firm-fixed-price contract type suggests an effort to establish a predictable cost ceiling, which is generally favorable for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple qualified bidders had the opportunity to submit proposals. The presence of 5 bidders suggests a healthy level of interest and competition for this significant construction project. This competitive environment is expected to drive more favorable pricing and innovative solutions for the Department of the Navy.

Taxpayer Impact: Full and open competition typically leads to better pricing for taxpayers by ensuring that the government receives the most advantageous offers available in the market.

Public Impact

The primary beneficiaries are the Department of the Navy and its operational forces stationed in or transiting through Guam. The project will deliver a critical piece of infrastructure: a central fuel station designed to support aviation and ground vehicle refueling. The geographic impact is concentrated on Guam, enhancing its strategic importance as a naval hub in the Indo-Pacific region. Workforce implications include job creation for construction workers and skilled trades in Guam during the project's execution phase.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions arise during construction.
Logistical challenges in procuring and transporting materials to Guam could impact schedule.
Ensuring compliance with environmental regulations for fuel storage facilities requires diligent oversight.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Full and open competition likely resulted in competitive pricing.
Experienced contractor, Hensel Phelps Construction Co., has a track record in large-scale projects.
Strategic location of the fuel station supports critical naval operations.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, specifically focusing on specialized infrastructure for military operations. The market for large-scale military construction projects is often characterized by significant government investment, stringent requirements, and a limited number of highly qualified contractors. Spending benchmarks for similar fuel depot or base infrastructure projects can vary widely based on location, capacity, and specific technological requirements.

Small Business Impact

The data indicates that this contract was not set aside for small businesses, nor does it appear to have specific subcontracting goals for small businesses explicitly stated in the provided data. Hensel Phelps Construction Co. is a large prime contractor, and while they may engage small businesses as subcontractors, the primary award mechanism did not prioritize small business participation. Further analysis of the subcontracting plan would be needed to assess the full impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Navy's contracting officers and project managers, ensuring adherence to specifications, schedule, and budget. Accountability measures are embedded in the firm-fixed-price contract, which holds the contractor responsible for delivering the project within the agreed-upon cost. Transparency is generally maintained through contract award databases and reporting requirements, though specific day-to-day oversight details are not provided.

Related Government Programs

Naval Base Guam Infrastructure Projects
Defense Fuel Supply Center Contracts
Military Construction (MILCON) Program
Indo-Pacific Command Infrastructure Development

Risk Flags

Potential for schedule delays due to logistical challenges in Guam.
Risk of cost overruns if unforeseen site conditions are encountered.
Ensuring long-term environmental compliance for fuel storage facilities.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.6 million to HENSEL PHELPS CONSTRUCTION CO. FY21 P-311 CENTRAL FUEL STATION

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 $24.6 million.

What is the period of performance?

Start: 2021-03-15. End: 2025-03-19.

What is Hensel Phelps Construction Co.'s track record with large-scale Department of Defense construction projects?

Hensel Phelps Construction Co. has a well-established track record with the Department of Defense, having completed numerous large-scale construction projects across various military branches and installations. Their portfolio includes barracks, aircraft hangars, training facilities, and infrastructure upgrades. They are known for their expertise in managing complex projects, often in challenging environments, and have demonstrated capabilities in delivering projects on time and within budget. Their experience with firm-fixed-price contracts and full and open competition suggests they are well-equipped to handle projects like the Guam Central Fuel Station, where cost control and adherence to specifications are paramount. Reviewing their past performance on similar projects, particularly those involving fuel storage or critical infrastructure, would provide further confidence in their ability to execute this contract successfully.

How does the $24.6 million cost compare to similar fuel station construction projects for the military?

Benchmarking the $24.6 million cost for the Guam Central Fuel Station requires comparing it to similar projects in terms of scale, capacity, location, and complexity. Large-scale fuel storage and distribution facilities for military bases can range significantly in cost. Factors such as the volume of fuel to be stored, the types of fuel (e.g., jet fuel, diesel), the number of dispensing points, the required safety and environmental controls, and the logistical challenges of the construction site all influence the final price. Projects in remote or high-cost-of-living areas like Guam tend to be more expensive than those in the continental U.S. While $24.6 million is a substantial figure, it may be within the expected range for a critical piece of infrastructure supporting naval operations in the Indo-Pacific, especially considering the specialized nature of fuel handling and storage.

What are the primary risks associated with constructing a fuel station in Guam?

Constructing a fuel station in Guam presents several key risks. Firstly, logistical challenges are significant due to Guam's island location, potentially leading to delays and increased costs for material transportation and equipment. Secondly, unforeseen geological or environmental conditions at the construction site could impact the project's schedule and budget. Thirdly, ensuring strict compliance with stringent environmental regulations for fuel storage and handling is critical and can add complexity and cost. Fourthly, the availability of a skilled local workforce might be a constraint, potentially requiring the contractor to bring in specialized labor, which adds to costs and logistical planning. Finally, the firm-fixed-price contract structure means the contractor bears the risk of cost overruns due to these factors, necessitating robust project management and contingency planning.

What is the expected impact of this fuel station on the Navy's operational capabilities in the region?

The construction of a central fuel station in Guam is expected to significantly enhance the Navy's operational capabilities in the Indo-Pacific region. Guam serves as a critical strategic hub for naval forces, and reliable access to fuel is fundamental for sustained operations. This new facility will likely improve the efficiency and speed of refueling for aircraft and vessels, reducing turnaround times and increasing operational readiness. It also contributes to the Navy's ability to project power and respond to contingencies in a vast and strategically vital area. By centralizing fuel storage and distribution, the Navy can optimize its logistics chain, potentially reducing reliance on more distant or less secure supply points and ensuring greater self-sufficiency for its forces operating in the Western Pacific.

How does the duration of the contract (1465 days) align with typical military construction project timelines?

A contract duration of 1465 days, which is approximately four years, is not uncommon for large-scale military construction projects, especially those involving specialized infrastructure like fuel stations. These projects often involve extensive planning, design, environmental reviews, permitting, procurement of specialized materials, and complex construction phases. Factors such as the scale of the facility, the need to minimize disruption to existing base operations, and potential weather delays (though less of a factor in Guam's climate compared to some other locations) can contribute to longer timelines. The duration also allows for thorough quality control and testing of critical systems, such as fuel handling and safety mechanisms, before the facility is fully operational. This timeframe suggests a comprehensive approach to building a robust and long-lasting piece of infrastructure.

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

Solicitation ID: N6274220R1309

Offers Received: 5

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: $24,632,155

Exercised Options: $24,632,155

Current Obligation: $24,632,155

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N6274219D1332

IDV Type: IDC

Timeline