DoD's $310M Design/Construction Contract Awarded to Hensel Phelps for Records Center and Mercury Flora Facilities

Contract Overview

Contract Amount: $309,875,167 ($309.9M)

Contractor: Hensel Phelps Construction CO

Awarding Agency: Department of Defense

Start Date: 2022-06-20

End Date: 2026-02-23

Contract Duration: 1,344 days

Daily Burn Rate: $230.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 7

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: DESIGN AND CONSTRUCTION: RECORDS CENTER REPLACEMENT AND MERCURY FLORA FACILITIES

Place of Performance

Location: FORT GEORGE G MEADE, ANNE ARUNDEL County, MARYLAND, 20755

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $309.9 million to HENSEL PHELPS CONSTRUCTION CO for work described as: DESIGN AND CONSTRUCTION: RECORDS CENTER REPLACEMENT AND MERCURY FLORA FACILITIES Key points: 1. The contract value of $310 million represents a significant investment in federal infrastructure. 2. Full and open competition suggests a robust bidding process, potentially leading to better pricing. 3. The firm-fixed-price contract type shifts cost risk to the contractor, Hensel Phelps. 4. The project duration of 1344 days indicates a long-term commitment to construction and delivery. 5. The project is located in Maryland, impacting the local construction workforce and economy. 6. The North American Industry Classification System (NAICS) code 236220 points to commercial and institutional building construction.

Value Assessment

Rating: good

The contract value of approximately $310 million for the design and construction of a records center and facilities appears to be within a reasonable range for large-scale federal construction projects of this nature. Benchmarking against similar projects would require detailed scope comparisons, but the scale suggests a substantial undertaking. The firm-fixed-price structure provides cost certainty for the government, assuming the contractor's bid accurately reflects project costs and risks. Without specific cost breakdowns or comparable project data, a precise value-for-money assessment is challenging, but the competitive award process is 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 7 bidders suggests a healthy level of competition for this significant construction project. A higher number of bidders generally correlates with more competitive pricing and a wider range of innovative solutions. The government's ability to attract multiple qualified bidders for a project of this magnitude is a positive sign for price discovery and achieving best value.

Taxpayer Impact: The full and open competition process is beneficial for taxpayers as it fosters a competitive environment, driving down costs and encouraging contractors to offer their most competitive pricing. This approach maximizes the potential for obtaining the best value for public funds invested in infrastructure.

Public Impact

The Department of the Army will benefit from enhanced records management and operational facilities. The project will deliver new or upgraded construction for critical federal infrastructure. The geographic impact is concentrated in Maryland, potentially creating local construction jobs and economic activity. The construction phase will likely involve a significant number of skilled trades and laborers, impacting the regional workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions or design changes arise, despite the fixed-price nature.
Schedule delays could impact the operational readiness of the facilities.
Ensuring compliance with environmental regulations during construction, especially concerning mercury.
Long-term maintenance and operational costs of the new facilities are not detailed in this award.

Positive Signals

Firm-fixed-price contract provides cost certainty to the government.
Full and open competition suggests a competitive bidding process and potential for good value.
Experienced contractor, Hensel Phelps Construction Co., likely brings significant expertise to the project.
Project addresses critical infrastructure needs for the Department of Defense.
Clear performance period with defined start and end dates.

Sector Analysis

The construction sector, particularly commercial and institutional building construction (NAICS 236220), is a significant area of federal spending. This contract falls within the broader category of government infrastructure development, which often involves large-scale projects requiring specialized design and construction expertise. Federal spending in this sector is influenced by infrastructure needs, modernization efforts, and national security requirements. Comparable spending benchmarks would typically involve analyzing the cost per square foot or per project for similar government facilities.

Small Business Impact

The data indicates that small business participation was not a specific set-aside for this contract (ss: false, sb: false). While the prime contractor, Hensel Phelps, is a large entity, there may be opportunities for small businesses to participate as subcontractors. The extent of small business subcontracting will depend on the prime contractor's strategy and the specific requirements of the project. Further analysis would be needed to determine the actual impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract will likely be managed by the contracting officer and relevant project managers within the Department of the Army. The firm-fixed-price nature of the contract places a significant portion of the risk on the contractor, but government oversight will be crucial to ensure adherence to specifications, quality standards, and timelines. Transparency is generally facilitated through contract award databases and reporting requirements. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Federal Buildings and Facilities Construction
Department of Defense Infrastructure Projects
Military Construction Projects
Government Records Management Facilities

Risk Flags

Potential environmental hazards (mercury)
Schedule adherence risks
Cost certainty under fixed-price contract
Complexity of large-scale construction projects

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $309.9 million to HENSEL PHELPS CONSTRUCTION CO. DESIGN AND CONSTRUCTION: RECORDS CENTER REPLACEMENT AND MERCURY FLORA FACILITIES

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 $309.9 million.

What is the period of performance?

Start: 2022-06-20. End: 2026-02-23.

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 construction projects. They have a history of successfully delivering complex facilities for various government agencies, including the Department of Defense, Department of Homeland Security, and others. Their portfolio often includes military installations, courthouses, airports, and other critical infrastructure. Analyzing their past performance on similar projects, particularly those involving records centers or specialized facilities, would provide further insight into their capabilities and reliability. Past performance evaluations and contract award data from federal procurement systems can offer details on their on-time and on-budget delivery rates, as well as any disputes or claims encountered.

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

The provided data indicates an award amount of $310,987,516.53. However, information regarding the government's initial estimate or allocated budget for this project is not available in the provided data snippet. To assess value for money, a comparison between the awarded price and the government's independent government cost estimate (IGCE) would be necessary. If the award was significantly below the IGCE, it could indicate strong competition or a conservative estimate. Conversely, an award close to or exceeding the IGCE might warrant closer scrutiny, especially if the scope or requirements changed. Without the budget context, it's difficult to definitively state if this represents optimal value.

What are the key performance indicators (KPIs) and quality assurance measures for this contract?

While specific KPIs and quality assurance measures are not detailed in the award data, typical federal construction contracts of this magnitude include rigorous oversight. Performance is generally measured against adherence to the design specifications, construction schedules, safety standards, and quality control plans. The firm-fixed-price contract type incentivizes the contractor to meet these requirements efficiently. The government will likely employ a contracting officer's representative (COR) or a construction representative to monitor progress, conduct inspections, and ensure compliance with all contractual terms and technical requirements. Quality assurance will involve material testing, site inspections, and verification of work completed against approved submittals and drawings.

What is the historical spending trend for similar records center and facility construction by the Department of the Army?

Analyzing historical spending trends for similar projects by the Department of the Army requires access to comprehensive federal procurement databases. Generally, the Army, like other branches of the DoD, invests significantly in infrastructure to support its operations, including secure records management facilities. Spending in this category can fluctuate based on modernization needs, base realignment and closure (BRAC) initiatives, and overall defense budgets. Projects like the "Records Center Replacement and Mercury Flora Facilities" are critical for maintaining operational readiness and data integrity. A review of past awards for similar construction projects over the last 5-10 years would reveal patterns in contract values, types of facilities constructed, and the agencies or commands that initiated these procurements.

What are the potential risks associated with the "Mercury Flora Facilities" aspect of the project?

The term "Mercury Flora Facilities" suggests a potential environmental consideration, possibly related to the presence or remediation of mercury. Mercury is a hazardous substance, and its handling, containment, or disposal during construction or renovation projects requires strict adherence to environmental regulations. Potential risks include unforeseen contamination, increased remediation costs, delays due to environmental compliance issues, and specialized disposal requirements. The contractor must have the expertise and protocols in place to manage these risks effectively. The firm-fixed-price nature of the contract means that the contractor bears the financial risk of managing these environmental aspects, but thorough site assessments and clear contractual language are crucial to mitigate surprises.

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: W912DR20R0007

Offers Received: 7

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1600 TYSONS BLVD STE 800, TYSONS CORNER, VA, 22102

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

Financial Breakdown

Contract Ceiling: $313,823,029

Exercised Options: $313,823,029

Current Obligation: $309,875,167

Actual Outlays: $39,000,000

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline