Navy awards $217.7M for hazardous substance removal, with CH2M Hill securing the contract

Contract Overview

Contract Amount: $21,766,634 ($21.8M)

Contractor: CH2M Hill Companies, Ltd.

Awarding Agency: Department of Defense

Start Date: 2002-08-15

End Date: 2006-12-29

Contract Duration: 1,597 days

Daily Burn Rate: $13.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS AWARD FEE

Sector: Construction

Official Description: 200211!126107!1700!C2467 !NAVAL FACILITIES ENGINEERING COM!N6246701D0331 !A!N! !N!0001 !20020815!20050411!027620574!027620574!027620574!N!CH2M HILL COMPANIES, LTD !9191 S JAMAICA ST !ENGLEWOOD !CO!80112!19000!113!48!DALLAS !DALLAS !TEXAS !+000014521883!N!N!000000000000!F108!HAZARDOUS SUBSTANCE REMOVAL/CLEANUP/DISPOSAL SVCS !C2 !CONSTRUCTION !2000!NOT DISCERNABLE OR CLASSIFIED !562910!E! !5!B!S!B! ! !99990909!B! ! !A! !A!U!R!2!003!B! !Z!N!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! !Y! ! !0001!

Place of Performance

Location: DALLAS, COLLIN County, TEXAS, 75248

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $21.8 million to CH2M HILL COMPANIES, LTD. for work described as: 200211!126107!1700!C2467 !NAVAL FACILITIES ENGINEERING COM!N6246701D0331 !A!N! !N!0001 !20020815!20050411!027620574!027620574!027620574!N!CH2M HILL COMPANIES, LTD !9191 S JAMAICA ST !ENGLEWOOD !CO!80112!19000!113!48!DALLAS !DALLA… Key points: 1. Contract awarded for hazardous substance removal and cleanup services. 2. Significant value suggests a large-scale or long-term environmental remediation effort. 3. Full and open competition indicates a broad market solicitation. 4. The contract duration of nearly 4 years points to substantial project scope. 5. The contractor, CH2M Hill, has a track record in engineering and construction services. 6. The award falls under the construction services category, aligning with remediation needs.

Value Assessment

Rating: good

The total award amount of $217.7 million for hazardous substance removal and cleanup services is substantial. Benchmarking this against similar large-scale environmental remediation contracts would be necessary for a precise value-for-money assessment. However, the fact that it was awarded under full and open competition suggests that multiple bids were considered, potentially leading to competitive pricing. The contract type, Cost Plus Award Fee (CPAF), allows for contractor incentives based on performance, which can be effective in managing complex projects but also requires robust oversight to ensure costs remain reasonable.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning that all responsible sources were permitted to submit a bid. The data indicates there were 3 bids received. This level of competition is generally positive for price discovery, as it encourages bidders to offer their most competitive terms to win the contract. The presence of multiple bidders suggests a healthy market for these types of environmental remediation services.

Taxpayer Impact: Taxpayers benefit from full and open competition as it typically drives down prices through market forces. This ensures that the government is receiving the best possible value for its investment in hazardous substance removal.

Public Impact

The primary beneficiaries are likely military installations or federal sites requiring environmental cleanup. Services delivered include the removal, cleanup, and disposal of hazardous substances. The geographic impact is centered in Texas, where the contractor is located and likely where the services will be performed. This contract supports jobs in the environmental remediation and construction sectors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Award Fee contracts can sometimes lead to cost overruns if not managed tightly.
The specific nature of hazardous substance removal carries inherent risks that require careful management and oversight.

Positive Signals

Awarded under full and open competition, suggesting competitive pricing.
The contractor, CH2M Hill, is a known entity in the engineering and construction space.
The contract has a defined period of performance, allowing for structured project management.

Sector Analysis

The environmental remediation services sector is a critical component of the construction and engineering industry, particularly for government contracts. This contract falls under the NAICS code 562910 (Remediation Services). The market for such services is driven by regulatory requirements and the need to address historical environmental contamination at various sites. Spending in this sector can fluctuate based on federal agency priorities and the identification of new remediation needs. Comparable spending benchmarks would involve looking at other large-scale environmental cleanup contracts awarded by agencies like the EPA or DoD.

Small Business Impact

The contract was awarded under full and open competition and does not indicate a specific small business set-aside. There is no explicit information provided regarding subcontracting plans for small businesses. Therefore, the direct impact on the small business ecosystem is not detailed in this data, though large prime contractors often utilize small businesses for specialized services.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy, which awarded the contract. The Cost Plus Award Fee (CPAF) structure necessitates robust oversight to monitor costs, evaluate performance against award criteria, and ensure the contractor is meeting all contractual obligations. Transparency would be facilitated through contract reporting mechanisms and potentially through the Defense Contract Audit Agency (DCAA) for cost audits. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Environmental Remediation Services
Hazardous Waste Management
Construction Services
Department of Defense Contracts
Navy Environmental Programs

Risk Flags

Potential for cost overruns due to CPAF structure.
Inherent environmental and safety risks in hazardous substance removal.
Need for stringent government oversight to ensure performance and cost control.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $21.8 million to CH2M HILL COMPANIES, LTD.. 200211!126107!1700!C2467 !NAVAL FACILITIES ENGINEERING COM!N6246701D0331 !A!N! !N!0001 !20020815!20050411!027620574!027620574!027620574!N!CH2M HILL COMPANIES, LTD !9191 S JAMAICA ST !ENGLEWOOD !CO!80112!19000!113!48!DALLAS !DALLAS !TEXAS !+000014521883!N!N!000000000000!F108!HAZARDOUS SUBSTANCE REMOVAL/CLEANUP/DISPOSAL SVCS !C2 !CONSTRUCTION !2000!NOT DISCERNABLE OR CLASSIFIED !562910!E! !5!B!S!B! ! !99990909!B

Who is the contractor on this award?

The obligated recipient is CH2M HILL COMPANIES, LTD..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $21.8 million.

What is the period of performance?

Start: 2002-08-15. End: 2006-12-29.

What is the historical spending pattern for hazardous substance removal services by the Department of the Navy?

Historical spending by the Department of the Navy on hazardous substance removal services can be analyzed by examining contract awards over several fiscal years. This specific contract, awarded in 2002 for approximately $217.7 million, represents a significant investment. To understand the pattern, one would need to aggregate data on similar contracts, noting the total dollar value awarded annually, the number of contracts issued, and the types of services procured (e.g., site assessment, cleanup, disposal). Trends might reveal increasing or decreasing investment in environmental remediation, shifts in contracting strategies (e.g., more or fewer large IDIQs), and the average value of individual remediation projects. Analyzing this historical data provides context for the current contract's scale and helps forecast future budgetary needs for environmental compliance and cleanup efforts within the Navy.

How does the pricing structure (Cost Plus Award Fee) for this contract compare to industry standards for similar remediation projects?

The Cost Plus Award Fee (CPAF) pricing structure is common for complex, performance-sensitive projects where the full scope may evolve, such as hazardous substance removal. In a CPAF contract, the contractor is reimbursed for allowable costs plus a fee that is composed of a fixed base fee and an award amount determined by the government based on performance against pre-defined criteria. Compared to fixed-price contracts, CPAF offers more flexibility but can lead to higher costs if performance targets are not met efficiently or if the award fee criteria are generous. Industry standards for remediation projects often involve a mix of contract types, with CPAF being suitable for projects requiring significant technical expertise and adaptability. The key to assessing value lies in the clarity and attainability of the award fee criteria and the rigor of the government's performance evaluation process to ensure the fee truly reflects exceptional service and cost control.

What is the track record of CH2M Hill in performing hazardous substance removal contracts for the federal government?

CH2M Hill (now part of Jacobs) has a substantial track record in performing environmental engineering, remediation, and construction services for the federal government, including hazardous substance removal. Prior to and following this specific 2002 contract, the company has been a significant player in large-scale environmental projects for agencies like the Department of Defense, Department of Energy, and the Environmental Protection Agency. Their experience often includes complex site cleanups, waste management, and compliance with stringent environmental regulations. Analyzing their past performance on similar contracts would involve reviewing contract databases for on-time delivery, cost performance, quality of work, and any past performance issues or disputes. Generally, CH2M Hill has been recognized for its technical capabilities in this domain, undertaking projects of considerable scale and complexity.

What are the potential risks associated with the 'Remediation Services' contract and how are they mitigated?

The primary risks associated with a 'Remediation Services' contract like this one involve environmental hazards, regulatory compliance, cost overruns, and project delays. Hazardous substances themselves pose risks to workers and the environment if not handled properly. Regulatory changes or unforeseen site conditions can significantly impact project scope and cost. Cost overruns are a risk, particularly with Cost Plus Award Fee contracts, if not managed diligently. Project delays can occur due to weather, logistical challenges, or technical difficulties. Mitigation strategies typically include rigorous site assessments, adherence to strict safety protocols (e.g., OSHA, EPA standards), robust project management plans, contingency planning for unforeseen conditions, clear communication channels between the contractor and the government, and strong government oversight to monitor progress, costs, and compliance. The CPAF structure itself incentivizes performance, which can help mitigate risks related to quality and timeliness.

How does the competition level (3 bidders) for this contract potentially impact the overall cost-effectiveness for taxpayers?

A competition level of three bidders for this hazardous substance removal contract suggests a moderately competitive environment. While more bidders generally lead to greater price pressure, three bidders still provide a basis for comparison and can drive competitive pricing. If these three bidders were all highly capable and actively seeking the contract, the government likely received proposals that reflected market rates. However, a lower number of bidders compared to the total number of potential qualified firms in the market could indicate barriers to entry or a less robustly competed segment. To fully assess cost-effectiveness, one would need to compare the awarded price against independent government cost estimates or benchmark data from similar, competitively bid contracts. The specific nature of specialized remediation services can sometimes limit the pool of qualified bidders, making three a reasonable outcome in certain contexts.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Remediation and Other Waste Management Services › Remediation Services

Product/Service Code: NATURAL RESOURCES MANAGEMENT › ENVIRONMENTAL SYSTEMS PROTECTION

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Address: 9191 S JAMAICA ST, ENGLEWOOD, CO, 80112

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N6246701D0331

IDV Type: IDC

Timeline