Army awards $50.7M for hazardous substance removal, with a 5-year performance period

Contract Overview

Contract Amount: $50,684,517 ($50.7M)

Contractor: Shaw Environmental, Inc.

Awarding Agency: Department of Defense

Start Date: 2003-08-08

End Date: 2010-08-31

Contract Duration: 2,580 days

Daily Burn Rate: $19.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: 200312!001060!96CE!CW41 !USA ENGINEER DISTRICT KANSAS CTY!DACW4198D9006 !A!N! !Y!0011 !20030808!20080806!111088444!109514559!180038382!N!SHAW ENVIRONMENTAL INC !4400 COLLEGE BLVD STE 350 !OVERLAND PARK !KS!66211!65000!510!29!ST. LOUIS !ST. LOUIS (CITY) !MISSOURI !+000000500000!N!N!000000000000!F108!HAZARDOUS SUBSTANCE REMOVAL/CLEANUP/DISPOSAL SVCS !S1 !SERVICES !5ZOP!OTHER ENVIRONMENTAL PROGRAMS !562910!E! !5!B!S!A! !D!20050218!B! ! !A! !A!U!U!2!005!B! !C!Y!Z! ! !N!C!N! ! ! !C!C!A!A!000!A!C!N! ! ! ! ! ! !0001! !

Place of Performance

Location: SAINT LOUIS, SAINT LOUIS County, MISSOURI, 63132

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $50.7 million to SHAW ENVIRONMENTAL, INC. for work described as: 200312!001060!96CE!CW41 !USA ENGINEER DISTRICT KANSAS CTY!DACW4198D9006 !A!N! !Y!0011 !20030808!20080806!111088444!109514559!180038382!N!SHAW ENVIRONMENTAL INC !4400 COLLEGE BLVD STE 350 !OVERLAND PARK !KS!66211!65000!510!29!ST. LOUIS !ST. L… Key points: 1. Contract awarded through full and open competition, indicating a competitive bidding process. 2. The contract type is Cost Plus Fixed Fee, which can present cost control challenges. 3. The awarded amount is $50.7 million over a period of approximately 7 years. 4. The contractor, Shaw Environmental, Inc., has a track record in environmental services. 5. The service falls under Remediation Services, a critical area for environmental protection. 6. The contract was awarded as a Delivery Order, suggesting it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract or a similar framework.

Value Assessment

Rating: fair

The total value of $50.7 million for hazardous substance removal services over approximately seven years appears to be within a reasonable range for such complex environmental work. However, without specific details on the scope of work, the number and type of hazardous substances, and the geographic locations involved, a precise value-for-money assessment is difficult. Benchmarking against similar large-scale remediation contracts would be necessary for a more definitive evaluation. The Cost Plus Fixed Fee (CPFF) contract type, while allowing for flexibility, can sometimes lead to higher costs if not managed diligently, as the contractor is reimbursed for allowable costs plus a fixed fee for profit.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit a bid. The data indicates there were 5 bids received. A competitive process like this generally leads to better price discovery and potentially lower costs for the government compared to sole-source or limited competition contracts. The presence of multiple bidders suggests a healthy market for these types of environmental remediation services.

Taxpayer Impact: Taxpayers benefit from the competitive nature of this award, as it increases the likelihood that the government secured the services at a fair market price. The competition helps drive efficiency and potentially innovation from the bidding contractors.

Public Impact

The primary beneficiaries are the U.S. Army and potentially other federal agencies requiring hazardous substance cleanup services. The services delivered include hazardous substance removal, cleanup, and disposal. The geographic impact is likely focused on areas where the U.S. Army has environmental remediation needs, with the contractor's address in Overland Park, KS, and a delivery location in St. Louis, MO. The contract supports jobs within the environmental services sector, particularly for specialists in hazardous material handling and remediation.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type can lead to cost overruns if not managed tightly.
The duration of the contract (over 7 years) requires sustained oversight to ensure performance and cost control.
Specific details on the scope of remediation and the types of hazardous substances are not provided, making a precise risk assessment challenging.

Positive Signals

Awarded under full and open competition, suggesting a competitive market and potentially fair pricing.
The contractor, Shaw Environmental, Inc., is an established entity in the environmental services industry.
The contract addresses a critical need for environmental cleanup and compliance.

Sector Analysis

The contract falls within the Environmental Remediation Services sector, a specialized segment of the broader professional, scientific, and technical services industry. This sector is crucial for addressing legacy contamination, complying with environmental regulations, and supporting infrastructure projects. The market size for environmental remediation services is substantial, driven by government mandates and private sector needs. This specific contract, valued at over $50 million, represents a significant award within this niche, likely involving complex cleanup operations.

Small Business Impact

This contract does not appear to have been specifically set aside for small businesses, as indicated by the 'ss' (small business set-aside) field being false. There is no explicit information provided regarding subcontracting plans for small businesses. Therefore, the direct impact on the small business ecosystem from this specific award is likely minimal unless Shaw Environmental, Inc. voluntarily engages small businesses as subcontractors.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army, specifically the U.S. Army Engineer District, Kansas City, which awarded the contract. The Cost Plus Fixed Fee (CPFF) structure necessitates robust financial and performance oversight to ensure costs are reasonable and the scope of work is met. Transparency is generally facilitated through contract award databases, but detailed performance reports and audits are typically internal or available through specific Freedom of Information Act (FOIA) requests. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Hazardous Waste Management
Environmental Cleanup Services
Department of Defense Contracts
Army Corps of Engineers Contracts
Remediation and Restoration Services

Risk Flags

Cost Plus Fixed Fee contract type requires diligent oversight to manage costs.
Long contract duration necessitates sustained performance monitoring.
Lack of specific scope details limits in-depth value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $50.7 million to SHAW ENVIRONMENTAL, INC.. 200312!001060!96CE!CW41 !USA ENGINEER DISTRICT KANSAS CTY!DACW4198D9006 !A!N! !Y!0011 !20030808!20080806!111088444!109514559!180038382!N!SHAW ENVIRONMENTAL INC !4400 COLLEGE BLVD STE 350 !OVERLAND PARK !KS!66211!65000!510!29!ST. LOUIS !ST. LOUIS (CITY) !MISSOURI !+000000500000!N!N!000000000000!F108!HAZARDOUS SUBSTANCE REMOVAL/CLEANUP/DISPOSAL SVCS !S1 !SERVICES !5ZOP!OTHER ENVIRONMENTAL PROGRAMS !562910!E! !5!B!S!A! !D!20050218!B

Who is the contractor on this award?

The obligated recipient is SHAW ENVIRONMENTAL, 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 $50.7 million.

What is the period of performance?

Start: 2003-08-08. End: 2010-08-31.

What is the specific scope of work for the hazardous substance removal and cleanup services?

The provided data indicates the contract is for 'HAZARDOUS SUBSTANCE REMOVAL/CLEANUP/DISPOSAL SVCS' under the North American Industry Classification System (NAICS) code 562910 (Remediation Services). However, the specific types of hazardous substances, the locations requiring cleanup, the volume of material to be handled, and the specific remediation techniques to be employed are not detailed in the summary data. This level of detail is crucial for understanding the complexity and true cost drivers of the contract. Without this information, it's difficult to benchmark the value effectively against other remediation projects.

How does the $50.7 million award compare to similar hazardous substance removal contracts awarded by the Department of Defense?

Comparing this $50.7 million award requires access to a broader dataset of similar contracts. However, large-scale environmental remediation projects for federal agencies can range from tens of millions to hundreds of millions of dollars, depending on the scale, complexity, and duration. Given the approximately 7-year performance period (from 2003 to 2010), the average annual value is roughly $7.2 million. This figure is plausible for significant remediation efforts. To provide a precise comparison, one would need to analyze contracts with similar NAICS codes (e.g., 562910), contract types (CPFF), and agencies (DoD components) over comparable timeframes, adjusting for inflation and scope differences.

What are the potential risks associated with a Cost Plus Fixed Fee (CPFF) contract for environmental remediation?

The primary risk with a CPFF contract is that the contractor is reimbursed for all allowable costs incurred, plus a fixed fee representing profit. While the fee is fixed, the total cost is not. If the contractor's costs escalate due to unforeseen site conditions, changes in regulations, or inefficient operations, the government bears the financial burden. This necessitates stringent oversight by the contracting agency to monitor costs, ensure efficiency, and verify the allowability of expenses. For complex projects like hazardous substance removal, where unknowns are common, effective cost control and performance monitoring are paramount to mitigate risks of cost overruns and ensure value for taxpayer money.

What is the track record of Shaw Environmental, Inc. in performing similar government contracts?

Shaw Environmental, Inc. (which later became part of Chicago Bridge & Iron Company, then McDermott International, and subsequently acquired by other entities) has a significant history of performing large-scale environmental services and government contracts, including those with the Department of Defense and the Environmental Protection Agency. Their portfolio often includes remediation, hazardous waste management, and infrastructure support. While specific performance metrics for this particular contract (DACW4198D9006) are not detailed in the summary data, the company's general experience suggests a capacity to handle complex environmental projects. A deeper dive would involve reviewing past performance evaluations and any documented issues on prior government contracts.

How has federal spending on remediation services (NAICS 562910) trended over the past two decades?

Federal spending on remediation services (NAICS 562910) has generally remained substantial over the past two decades, driven by ongoing environmental cleanup requirements at military bases, Superfund sites, and other federal facilities. While specific year-over-year trends can fluctuate based on major project completions, new site discoveries, and budget allocations, the overall demand for these services has been consistent. Agencies like the Department of Defense (through the Army Corps of Engineers), the Department of Energy, and the EPA are major sources of funding. The total federal obligation for this sector likely runs into billions of dollars annually, reflecting the long-term nature of environmental remediation efforts across the government.

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: 5

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Shaw Group Inc., the (UEI: 180038382)

Address: 11206 THOMPSON AVE, LENEXA, KS, 66219

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

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: DACW4198D9006

IDV Type: IDC

Timeline