Army awards $53.7M contract for hazardous substance removal, with Bechtel National Inc. as prime

Contract Overview

Contract Amount: $53,704,896 ($53.7M)

Contractor: Bechtel National, Inc.

Awarding Agency: Department of Defense

Start Date: 2003-10-28

End Date: 2018-09-29

Contract Duration: 5,450 days

Daily Burn Rate: $9.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Other

Official Description: 200401!000102!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !DAAA0902D0025 !A!N! !N!0004 ! !20031028!20101231!089176176!094878998!094878980!N!BECHTEL NATIONAL, INC !50 BEALE STREET !SAN FRANCISCO !CA!94105!67000!075!06!SAN FRANCISCO !SAN FRANCISCO !CALIFORNIA!+000002025596!N!N!000000000000!F108!HAZARDOUS SUBSTANCE REMOVAL/CLEANUP/DISPOSAL SVCS !C9E!ALL OTHER SUPPLIES AND EQUIPMENT !000 !* !562211!E! !5!B!S! ! ! !99990909!B! ! !A! !A!N!V!2!002!A! !Z!Y!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! ! ! ! !0001! !

Place of Performance

Location: PUEBLO, PUEBLO County, COLORADO, 81006

State: Colorado Government Spending

Plain-Language Summary

Department of Defense obligated $53.7 million to BECHTEL NATIONAL, INC. for work described as: 200401!000102!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !DAAA0902D0025 !A!N! !N!0004 ! !20031028!20101231!089176176!094878998!094878980!N!BECHTEL NATIONAL, INC !50 BEALE STREET !SAN FRANCISCO !CA!94105!67000!075!06!SAN FRANCISCO !SAN … Key points: 1. Contract awarded for hazardous waste treatment and disposal services. 2. Significant contract value suggests a large-scale or long-term need for environmental remediation. 3. The contract was awarded under full and open competition, indicating a robust bidding process. 4. The duration of the contract (over 15 years) points to a sustained effort in environmental management. 5. The prime contractor, Bechtel National, Inc., has a substantial presence in large-scale engineering and construction projects. 6. The contract's focus on hazardous substance removal highlights critical environmental protection and compliance efforts.

Value Assessment

Rating: good

The award amount of $53.7 million over its extended period appears reasonable for hazardous substance removal services, especially considering the complexity and potential scale of such operations. Benchmarking against similar large-scale environmental remediation contracts would provide a more precise value-for-money assessment. However, the Cost Plus Incentive Fee (CPIF) pricing structure suggests an effort to control costs while incentivizing contractor performance, which is a positive sign for value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition,' indicating that all responsible sources were permitted to submit a bid. This suggests a competitive environment where multiple companies likely vied for the contract. The presence of full and open competition is generally favorable for price discovery and ensuring the government receives competitive pricing.

Taxpayer Impact: Taxpayers benefit from full and open competition through potentially lower prices and a wider selection of qualified contractors, leading to better overall value.

Public Impact

The U.S. Army benefits from this contract by ensuring the safe and compliant removal and disposal of hazardous substances, thereby protecting military personnel and surrounding environments. Services delivered include hazardous waste treatment and disposal, crucial for environmental stewardship and regulatory compliance. The contract's geographic impact is primarily linked to Army installations requiring hazardous substance management, though the specific locations are not detailed here. The contract supports a workforce skilled in environmental remediation, hazardous material handling, and waste management.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in Cost Plus Incentive Fee contracts if performance targets are not met efficiently.
Long contract duration increases the risk of scope creep or evolving environmental regulations impacting costs.
Reliance on a single prime contractor for a critical service like hazardous waste management could pose risks if performance falters.

Positive Signals

Award under full and open competition suggests a competitive process that should drive efficiency.
The Cost Plus Incentive Fee (CPIF) structure incentivizes the contractor to perform efficiently and meet cost targets.
Bechtel National, Inc. is a large, experienced contractor with a track record in complex projects, suggesting a lower risk of execution failure.

Sector Analysis

This contract falls within the Environmental Services sector, specifically focusing on hazardous waste treatment and disposal. This is a critical segment of the industrial services market, driven by regulatory compliance and the need for specialized expertise. The market size for environmental remediation services is substantial, with government contracts forming a significant portion due to the extensive environmental responsibilities of federal agencies. Comparable spending benchmarks would involve looking at other large-scale hazardous waste management contracts awarded by DoD or EPA.

Small Business Impact

There is no explicit indication of small business set-asides or subcontracting goals within the provided data. Given the scale and specialized nature of hazardous substance removal, it's possible that larger firms like Bechtel National, Inc. would handle the prime contract, with potential for subcontracting to smaller, specialized environmental firms. Further analysis would be needed to determine the extent of small business participation.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant program office within the Department of the Army. The Cost Plus Incentive Fee structure implies performance metrics that would be monitored to ensure contractor accountability. Transparency would be facilitated through contract award databases and potentially through Inspector General reports if any issues arise. The specific oversight mechanisms would be detailed in the contract's terms and conditions.

Related Government Programs

Environmental Remediation Services
Hazardous Waste Management
Department of Defense Environmental Programs
Army Environmental Services
Industrial Operations Support

Risk Flags

Long contract duration may increase exposure to market volatility and regulatory changes.
Cost Plus Incentive Fee contracts require diligent oversight to ensure cost control and value.
Potential for unforeseen complexities in hazardous substance removal impacting cost and schedule.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $53.7 million to BECHTEL NATIONAL, INC.. 200401!000102!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !DAAA0902D0025 !A!N! !N!0004 ! !20031028!20101231!089176176!094878998!094878980!N!BECHTEL NATIONAL, INC !50 BEALE STREET !SAN FRANCISCO !CA!94105!67000!075!06!SAN FRANCISCO !SAN FRANCISCO !CALIFORNIA!+000002025596!N!N!000000000000!F108!HAZARDOUS SUBSTANCE REMOVAL/CLEANUP/DISPOSAL SVCS !C9E!ALL OTHER SUPPLIES AND EQUIPMENT !000 !* !562211!E! !5!B!S! ! ! !999

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 $53.7 million.

What is the period of performance?

Start: 2003-10-28. End: 2018-09-29.

What is Bechtel National, Inc.'s track record with similar hazardous substance removal contracts for the Department of Defense?

Bechtel National, Inc. has a significant history of undertaking large-scale engineering, procurement, and construction (EPC) projects, including those involving environmental remediation and hazardous material management for government agencies. While specific details on past DoD hazardous substance removal contracts are not provided in this data snippet, Bechtel's broader portfolio suggests extensive experience in managing complex environmental challenges. Their involvement in projects like cleanup operations at former military bases or nuclear facilities indicates a capability to handle the scope and regulatory demands typical of such contracts. A deeper dive into their contract history with agencies like the Army Corps of Engineers or the Environmental Protection Agency would reveal more specific performance data and project outcomes.

How does the awarded amount compare to the estimated value or initial bids for this contract?

The provided data indicates an award amount of $53,704,896.13. Without access to the original solicitation, estimated cost, or details of other bids received, it is challenging to definitively assess how this award compares. However, the fact that it was awarded under 'full and open competition' suggests that this amount was deemed competitive and represented good value among the submitted proposals. The Cost Plus Incentive Fee (CPIF) contract type implies that the final cost could vary based on performance, but the initial award sets a baseline. Further analysis would require comparing this award to the government's independent cost estimate and the pricing structures of other bidders.

What are the primary risks associated with a Cost Plus Incentive Fee (CPIF) contract for hazardous substance removal?

CPIF contracts, while designed to incentivize efficiency, carry inherent risks. For hazardous substance removal, a primary risk is the potential for the contractor to incur costs that exceed initial projections, even with incentives. If the scope of contamination is underestimated or unforeseen complexities arise (e.g., discovery of unexpected materials, difficult site conditions), the 'cost plus' aspect means the government still bears the majority of the expense. The 'incentive fee' aims to mitigate this by rewarding the contractor for meeting or beating targets, but poorly defined targets or inadequate oversight can lead to the government paying more than necessary. Additionally, the complexity of environmental regulations and the potential for litigation related to cleanup outcomes add layers of risk.

What is the historical spending pattern for hazardous waste treatment and disposal services by the Department of the Army?

Historical spending data for hazardous waste treatment and disposal by the Department of the Army is substantial, reflecting the ongoing need for environmental compliance and site remediation across numerous installations. While this specific contract award is for approximately $53.7 million, the Army's total annual expenditure in this category can run into hundreds of millions, if not billions, of dollars over time. This includes spending on cleanup of legacy contamination, ongoing waste management, and emergency response. Factors influencing spending include the number of active sites, regulatory changes, and the scale of remediation efforts. Analyzing trends over several fiscal years would reveal patterns in contract types, average award values, and key service providers.

How does the contract duration of over 15 years impact the overall value and risk assessment?

A contract duration exceeding 15 years (from initial award date to final delivery order end date) for hazardous substance removal signifies a long-term commitment to managing environmental liabilities. This extended period can offer value by providing continuity of service and allowing the contractor to achieve economies of scale and specialized efficiencies over time. However, it also introduces significant risks. Market conditions, material costs, and labor rates can fluctuate considerably over such a long timeframe, potentially impacting the cost-effectiveness of the fixed or incentive-based pricing. Furthermore, environmental regulations are subject to change, and a long-term contract may not be agile enough to adapt to new requirements without costly modifications. The government must maintain robust oversight to ensure the contract remains relevant and cost-effective throughout its lifespan.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Waste Treatment and Disposal › Hazardous Waste Treatment and Disposal

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: COST PLUS INCENTIVE FEE (V)

Evaluated Preference: NONE

Contractor Details

Parent Company: Bechtel Group, Inc.

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: $16,540

Exercised Options: $16,540

Current Obligation: $53,704,896

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: DAAA0902D0025

IDV Type: IDC

Timeline