Army awards $476.8M contract for chemical/biological studies and analyses to Bechtel National, Inc

Contract Overview

Contract Amount: $476,846,381 ($476.8M)

Contractor: Bechtel National, Inc.

Awarding Agency: Department of Defense

Start Date: 2002-02-01

End Date: 2018-09-30

Contract Duration: 6,085 days

Daily Burn Rate: $78.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: 200205!000289!2100!AA09 !U.S. ARMY INDUSTRIAL OPERATIONS !DAAA0902G0005 !A!N! !Y!0001 !20020201!20041201!089176176!094878998!094878980!N!BECHTEL NATIONAL, INC !50 BEALE STREET !SAN FRANCISCO !CA!94105!04000!510!24!BALTIMORE !BALTIMORE (CITY) !MARYLAND !+000002000000!N!N!000000000000!B504!CHEMICAL/BIOLOGICAL STUDIES & ANALYSES !S1 !SERVICES !1000!NOT DISCERNABLE OR CLASSIFIED !541710!E! !4! ! ! ! ! !20041201!B! ! !A! !D!N!U!1!001!N!2A!C!Y!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! ! ! ! !0001!

Place of Performance

Location: ABERDEEN, HARFORD County, MARYLAND, 21001

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $476.8 million to BECHTEL NATIONAL, INC. for work described as: 200205!000289!2100!AA09 !U.S. ARMY INDUSTRIAL OPERATIONS !DAAA0902G0005 !A!N! !Y!0001 !20020201!20041201!089176176!094878998!094878980!N!BECHTEL NATIONAL, INC !50 BEALE STREET !SAN FRANCISCO !CA!94105!04000!510!24!BALTIMORE !BALTIMORE (CITY) !MARYLAND !+000002000000!N!N!000000000… Key points: 1. Contract awarded on a sole-source basis, raising questions about potential cost efficiencies. 2. Long contract duration of over 15 years suggests a sustained need for these specialized services. 3. The contract's value represents a significant investment in national security research and development. 4. Performance is located in Maryland, potentially impacting the local workforce and economy. 5. The specific nature of chemical/biological studies may involve classified or sensitive information, limiting public transparency. 6. Research and Development sector spending is crucial for technological advancement and threat mitigation.

Value Assessment

Rating: questionable

The total award amount of $476.8 million over a period of approximately 15 years indicates a substantial investment. Without comparable sole-source contracts for similar chemical and biological studies and analyses, it is difficult to definitively benchmark the value for money. The cost-plus-fixed-fee contract type suggests that Bechtel National, Inc. is reimbursed for its costs plus a fixed fee, which can sometimes lead to less price pressure compared to fixed-price contracts. Further analysis would be needed to compare the fee structure and overhead rates against industry standards for R&D services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor possesses the unique capabilities, specialized knowledge, or proprietary technology required for the service. While it ensures access to specific expertise, it limits the opportunity for competitive bidding, which could potentially drive down costs and foster innovation through market forces. The lack of competition means that the government did not benefit from a bidding process to secure the most advantageous terms.

Taxpayer Impact: Sole-source awards can result in higher costs for taxpayers as there is no competitive pressure to ensure the lowest possible price. This necessitates robust oversight to ensure fair pricing and prevent potential overspending.

Public Impact

The U.S. Army is the primary beneficiary, receiving critical research and analysis services. Services delivered include chemical and biological studies and analyses, vital for national security and defense. The contract's performance location in Baltimore, Maryland, suggests a potential impact on the local economy and specialized workforce. This contract supports the development of advanced capabilities to counter chemical and biological threats.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential cost savings for taxpayers.
Long contract duration may not reflect evolving technological needs or market efficiencies.
Cost-plus-fixed-fee structure can incentivize cost increases if not closely monitored.
Lack of detailed public information on specific services and outcomes due to potential classification.

Positive Signals

Award to an established contractor (Bechtel National, Inc.) suggests a level of trust and proven capability.
Focus on critical R&D in chemical and biological defense addresses significant national security requirements.
The contract supports specialized scientific and analytical expertise essential for threat assessment and mitigation.

Sector Analysis

This contract falls within the Research and Development (R&D) sector, specifically focusing on physical, engineering, and life sciences (NAICS code 541710). This sector is characterized by innovation, specialized expertise, and often long development cycles. The market size for defense-related R&D is substantial, driven by the need to maintain technological superiority and counter evolving threats. Comparable spending benchmarks in this area are difficult to establish precisely due to the specialized nature of chemical and biological studies, but significant government investment is typical for such critical national security functions.

Small Business Impact

There is no indication that this contract included a small business set-aside. Given the specialized and potentially sensitive nature of chemical and biological studies and analyses, it is likely that the prime contractor, Bechtel National, Inc., possesses unique capabilities. However, analysis of subcontracting opportunities for small businesses within this large contract would be beneficial to understand the broader economic impact and potential for small business involvement in specialized research support roles.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army and the Department of Defense. As a cost-plus-fixed-fee contract, rigorous financial oversight and auditing are crucial to ensure that costs are reasonable and allowable, and that the fixed fee is justified. Transparency may be limited due to the nature of the work, but contract modifications, performance reports, and payment data should be subject to review by relevant oversight bodies, including potentially the Government Accountability Office (GAO) and the Inspector General.

Related Government Programs

Chemical and Biological Defense Program
Department of Defense Research and Development
National Security Research Contracts
Army Science and Technology Programs

Risk Flags

Sole-source award
Long contract duration
Cost-plus-fixed-fee contract type

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $476.8 million to BECHTEL NATIONAL, INC.. 200205!000289!2100!AA09 !U.S. ARMY INDUSTRIAL OPERATIONS !DAAA0902G0005 !A!N! !Y!0001 !20020201!20041201!089176176!094878998!094878980!N!BECHTEL NATIONAL, INC !50 BEALE STREET !SAN FRANCISCO !CA!94105!04000!510!24!BALTIMORE !BALTIMORE (CITY) !MARYLAND !+000002000000!N!N!000000000000!B504!CHEMICAL/BIOLOGICAL STUDIES & ANALYSES !S1 !SERVICES !1000!NOT DISCERNABLE OR CLASSIFIED !541710!E! !4! ! ! ! ! !20041201!B! ! !A! !D!N!U!1!001!N!2A!C!Y!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! ! ! ! !0001!

Who is the contractor on this award?

The obligated recipient is BECHTEL NATIONAL, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $476.8 million.

What is the period of performance?

Start: 2002-02-01. End: 2018-09-30.

What is the specific breakdown of services provided under this contract, and how do they align with current U.S. Army chemical and biological defense priorities?

The contract data indicates the primary service category as 'CHEMICAL/BIOLOGICAL STUDIES & ANALYSES' under NAICS code 541710 (Research and Development in the Physical, Engineering, and Life Sciences). While the contract award itself does not detail the specific sub-services, such a contract typically encompasses a range of activities including threat assessment, vulnerability analysis, development of countermeasures, testing and evaluation of protective equipment, and research into novel biological and chemical agents. These services directly align with the U.S. Army's ongoing commitment to protecting its personnel and assets from chemical and biological threats, which remains a high priority given the evolving global security landscape. Specific alignment would require access to the contract's statement of work and any subsequent modifications, which may not be publicly available due to the sensitive nature of the research.

How does the total contract value of approximately $476.8 million compare to other similar R&D contracts awarded by the Department of Defense for chemical and biological defense?

Benchmarking this $476.8 million contract against similar Department of Defense (DoD) R&D contracts for chemical and biological defense requires access to a broader dataset of comparable awards. However, given the duration of over 15 years (from initial award in 2002 to final delivery order in 2018), the total value suggests a significant, long-term investment in specialized research. Large-scale R&D efforts in defense, particularly those involving complex scientific analysis and potentially classified research, often reach hundreds of millions of dollars. Without specific comparable contract values for similar scope and duration, it's challenging to definitively state if this represents a high or low value. However, the sole-source nature of this award suggests that the government identified Bechtel National, Inc. as uniquely qualified, potentially influencing the pricing structure compared to a competitively bid program.

What are the key performance indicators (KPIs) or metrics used to evaluate Bechtel National, Inc.'s performance under this contract, and what has been their performance history?

The provided data does not include specific Key Performance Indicators (KPIs) or detailed performance history for Bechtel National, Inc. under this contract. Typically, KPIs for R&D contracts focus on milestones achieved, research findings, successful development of prototypes or countermeasures, adherence to project timelines, and quality of analysis. Performance evaluations are usually documented in contract performance reports, which are not publicly accessible in this dataset. Bechtel National, Inc. is a large, established company with extensive experience in government contracting, including significant work in engineering, construction, and project management for defense and energy sectors. While their general track record is extensive, specific performance on this particular chemical and biological studies contract would require access to internal DoD performance assessments.

Given the sole-source nature of this award, what mechanisms were in place to ensure fair and reasonable pricing and prevent cost overruns?

For sole-source contracts, especially those using a cost-plus-fixed-fee (CPFF) structure like this one, the government employs several mechanisms to ensure fair and reasonable pricing. These include detailed cost analysis, negotiation of the fixed fee based on anticipated risk and effort, and rigorous auditing of incurred costs. The Defense Contract Audit Agency (DCAA) plays a crucial role in auditing contractor costs to ensure they are allowable, allocable, and reasonable. Furthermore, the contracting officer must justify the sole-source award through a Justification and Approval (J&A) document, which outlines why competition is not feasible. Continuous monitoring of contract performance and expenditures by the contracting officer's representative (COR) is also essential to identify potential cost overruns early and take corrective action.

What is the historical spending trend for chemical and biological studies and analyses within the U.S. Army or Department of Defense over the past two decades?

Historical spending on chemical and biological (CB) studies and analyses within the U.S. Army and the broader Department of Defense (DoD) has generally been substantial and sustained, particularly following events that heightened awareness of CB threats. Over the past two decades, significant investments have been made in research, development, procurement of countermeasures, and training related to CB defense. Spending often fluctuates based on perceived threat levels, geopolitical events, and technological advancements. While specific aggregate spending figures for 'chemical and biological studies and analyses' are not readily available as a distinct category across the entire DoD for the past 20 years, it is understood to be a critical component of the overall CB defense budget, which itself runs into billions of dollars annually. This contract, awarded in 2002 and active until 2018, represents a portion of that historical investment during a period of heightened focus on WMD threats.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences

Product/Service Code: SPECIAL STUDIES/ANALYSIS, NOT R&D › SPECIAL STUDIES - NOT R and D

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Bechtel Group, Inc. (UEI: 094878980)

Address: 50 BEALE ST, SAN FRANCISCO, CA, 94105

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

Financial Breakdown

Contract Ceiling: $3,452

Exercised Options: $3,452

Current Obligation: $476,846,381

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: DAAA0902G0005

IDV Type: IDC

Timeline