DoD's $61.5M environmental services contract awarded to Shaw Environmental & Infrastructure, Inc. for Redstone Arsenal

Contract Overview

Contract Amount: $61,464,919 ($61.5M)

Contractor: Shaw Environmental & Infrastructure, Inc.

Awarding Agency: Department of Defense

Start Date: 2009-09-08

End Date: 2014-12-31

Contract Duration: 1,940 days

Daily Burn Rate: $31.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: COST PLUS INCENTIVE

Sector: Other

Official Description: ENVIRONMENTAL PROGRAM MANAGEMENT AND ENVIRONMENTAL REMEDIATION SERVICES - REDSTONE ARSENAL, AL

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35809

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $61.5 million to SHAW ENVIRONMENTAL & INFRASTRUCTURE, INC. for work described as: ENVIRONMENTAL PROGRAM MANAGEMENT AND ENVIRONMENTAL REMEDIATION SERVICES - REDSTONE ARSENAL, AL Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract type is Cost Plus Incentive, which can incentivize cost savings but also carries inherent risk. 3. The duration of the contract is 1940 days, indicating a long-term need for these services. 4. The contract was awarded by the Department of the Army, a major component of the Department of Defense. 5. The North American Industry Classification System (NAICS) code 562910 points to Remediation Services. 6. The base award amount is $31.68M, with a potential ceiling of $61.46M, indicating significant scope flexibility.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific performance metrics or detailed cost breakdowns. The Cost Plus Incentive Fee (CPIF) contract type allows for costs plus a fee that is adjusted based on performance. While this can encourage efficiency, it also means the final cost can fluctuate. Comparing the per-diem cost or cost per service unit against similar environmental remediation contracts would be necessary for a more precise value assessment. The significant difference between the base award and the ceiling suggests potential for cost overruns or scope expansion.

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 a bid. The presence of 4 bidders suggests a reasonable level of competition for these specialized environmental services. A competitive process generally leads to better price discovery and potentially more favorable terms for the government.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it drives down prices through market forces and ensures the government receives the best value available.

Public Impact

The primary beneficiaries are the Department of Defense and the Redstone Arsenal, ensuring environmental compliance and remediation. Services delivered include environmental program management and remediation, crucial for maintaining operational readiness and environmental stewardship. The geographic impact is localized to Redstone Arsenal in Alabama. The contract supports a workforce involved in environmental science, engineering, and remediation activities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Incentive Fee contracts can lead to higher final costs if performance targets are not met or if scope creep occurs.
The significant difference between the base award and the ceiling ($31.68M vs $61.46M) indicates a substantial potential for cost growth.
Long contract duration (1940 days) increases the risk of changing environmental regulations or unforeseen site conditions impacting costs.
Lack of specific performance metrics in the provided data makes it difficult to assess the efficiency and effectiveness of the services rendered.
The nature of environmental remediation can involve unforeseen complexities that drive up costs beyond initial estimates.

Positive Signals

Awarded through full and open competition, ensuring a competitive bidding process.
The presence of multiple bidders (4) suggests a healthy market for these services.
The Cost Plus Incentive Fee structure, if managed effectively, can incentivize contractor performance and cost control.
The contract addresses critical environmental management and remediation needs for a key military installation.
The long duration suggests a stable, long-term partnership for essential services.

Sector Analysis

The environmental consulting and remediation services sector is a significant market driven by regulatory compliance, industrial cleanup needs, and government contracts. Federal spending in this area is substantial, supporting cleanup efforts at military bases, Superfund sites, and other government facilities. This contract fits within the broader category of environmental services, which includes site assessment, remediation, waste management, and compliance consulting. Comparable spending benchmarks would typically involve analyzing the average cost per acre remediated, cost per cubic yard of contaminated material removed, or hourly rates for specialized environmental professionals.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, small businesses are unlikely to be direct prime contractors. However, there may be opportunities for small businesses to participate as subcontractors to Shaw Environmental & Infrastructure, Inc., depending on the subcontracting plan negotiated. The overall impact on the small business ecosystem would depend on the extent to which the prime contractor utilizes small business partners.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. Accountability measures are typically embedded within the Cost Plus Incentive Fee structure, linking contractor payment to performance outcomes. Transparency is generally facilitated through contract award databases and reporting requirements. The Inspector General for the Department of Defense would have jurisdiction to investigate any allegations of fraud, waste, or abuse related to this contract.

Related Government Programs

Environmental Remediation Services
Environmental Consulting Services
Department of Defense Environmental Programs
Army Corps of Engineers Environmental Services
Base Realignment and Closure (BRAC) Environmental Cleanup

Risk Flags

Potential for cost growth due to CPIF structure and large ceiling variance.
Long contract duration increases exposure to unforeseen site conditions and regulatory changes.
Lack of specific performance metrics in summary data hinders value assessment.
Environmental remediation inherently involves uncertainty and potential for unexpected costs.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $61.5 million to SHAW ENVIRONMENTAL & INFRASTRUCTURE, INC.. ENVIRONMENTAL PROGRAM MANAGEMENT AND ENVIRONMENTAL REMEDIATION SERVICES - REDSTONE ARSENAL, AL

Who is the contractor on this award?

The obligated recipient is SHAW ENVIRONMENTAL & INFRASTRUCTURE, 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 $61.5 million.

What is the period of performance?

Start: 2009-09-08. End: 2014-12-31.

What is the track record of Shaw Environmental & Infrastructure, Inc. with similar government contracts, particularly in environmental remediation?

Shaw Environmental & Infrastructure, Inc. has a history of performing large-scale environmental remediation and infrastructure projects for government agencies, including the Department of Defense. Analyzing their past performance on similar Cost Plus Incentive Fee contracts would be crucial. This would involve reviewing past performance evaluations, any documented disputes or claims, and their success in meeting cost and schedule targets on previous projects. A review of their financial stability and capacity to handle complex, long-term environmental projects is also important. Without specific data on their past performance on this exact contract or closely related ones, it's difficult to provide a definitive assessment, but their involvement in significant projects suggests they possess the requisite capabilities.

How does the potential ceiling of $61.46 million compare to the base award of $31.68 million for this type of environmental remediation service?

The potential ceiling of $61.46 million represents a significant increase of approximately 94% over the base award of $31.68 million. For environmental remediation contracts, especially those with a long duration like this one (1940 days), such a substantial difference between the base and ceiling is not uncommon. It often reflects the inherent uncertainties in environmental cleanup work, where the full extent of contamination, necessary remediation techniques, and unforeseen site conditions may not be fully known at the time of award. The Cost Plus Incentive Fee (CPIF) structure allows for this flexibility, enabling the scope to expand if justified by project needs, while incentivizing the contractor to manage costs. However, it also signals a higher potential financial exposure for the government.

What are the key performance indicators (KPIs) typically associated with environmental remediation contracts like this one?

Key performance indicators (KPIs) for environmental remediation contracts typically focus on several areas. These include: Remediation Effectiveness (e.g., achieving target cleanup levels within specified timeframes, reduction in contaminant concentrations), Cost Control (e.g., staying within budget, managing cost growth effectively, achieving cost savings incentives), Schedule Adherence (e.g., meeting project milestones, timely completion of phases), Health and Safety (e.g., zero lost-time incidents, compliance with safety protocols), Environmental Compliance (e.g., adherence to all environmental regulations, proper waste management), and Reporting Accuracy (e.g., timely and accurate submission of progress reports, data validation). The specific KPIs for this contract would be detailed in the contract's Performance Work Statement (PWS) and serve as the basis for the incentive fee adjustments under the CPIF structure.

What is the historical spending pattern for environmental program management and remediation services at Redstone Arsenal or within the Department of the Army?

Historical spending on environmental program management and remediation services at Redstone Arsenal and across the Department of the Army is substantial, driven by the extensive footprint of military installations and the ongoing need for environmental compliance and cleanup. The Army manages numerous sites with historical contamination requiring long-term remediation efforts. Annual spending can fluctuate based on specific project needs, regulatory drivers, and budget allocations. While this specific $61.5M contract represents a significant investment over its duration, it should be viewed within the context of the broader Army-wide environmental program, which often involves billions of dollars annually for cleanup, compliance, and conservation efforts across hundreds of facilities nationwide. Analyzing past contracts at Redstone Arsenal would reveal trends in service providers, contract types, and average award values for similar environmental work.

How does the Cost Plus Incentive Fee (CPIF) contract type influence risk allocation between the government and the contractor for environmental remediation?

The Cost Plus Incentive Fee (CPIF) contract type allocates risk in a manner designed to incentivize contractor performance while acknowledging the inherent uncertainties in the work. The government agrees to pay the contractor's allowable costs plus a target fee. However, the final fee is adjusted based on whether the final cost is below, at, or above the target cost, according to a pre-defined formula. This means the contractor shares in the risk of cost overruns; if costs exceed the target, their fee is reduced. Conversely, if they manage costs effectively and finish under target, their fee increases. This structure shifts some cost-certainty risk to the contractor compared to a fixed-price contract, but the government still bears the risk of cost increases impacting the final price, especially given the potential ceiling. It aims to balance cost control with the need for flexibility in complex projects like environmental remediation.

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 › NATURAL RESOURCES - OTHER SVCS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W91ZLK09R0001

Offers Received: 4

Pricing Type: COST PLUS INCENTIVE (V)

Evaluated Preference: NONE

Contractor Details

Parent Company: Chicago Bridge & Iron Company N.V. (UEI: 386491765)

Address: 312 DIRECTORS DR, KNOXVILLE, TN, 02

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

Financial Breakdown

Contract Ceiling: $73,203,254

Exercised Options: $61,464,919

Current Obligation: $61,464,919

Contract Characteristics

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W91ZLK09D0006

IDV Type: IDC

Timeline