DoD's $45.7M Engineering Services Contract Awarded to CH2M HILL CONSTRUCTORS, INC. in 2002

Contract Overview

Contract Amount: $45,765,687 ($45.8M)

Contractor: CH2M Hill Constructors, Inc.

Awarding Agency: Department of Defense

Start Date: 2002-05-21

End Date: 2010-09-23

Contract Duration: 3,047 days

Daily Burn Rate: $15.0K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 30

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Place of Performance

Location: ENGLEWOOD, DENVER County, COLORADO, 80112

State: Colorado Government Spending

Plain-Language Summary

Department of Defense obligated $45.8 million to CH2M HILL CONSTRUCTORS, INC. for work described as: Key points: 1. Contract awarded under full and open competition after exclusion of sources, indicating a broad initial search for qualified bidders. 2. The contract utilized a Cost Plus Fixed Fee (CPFF) pricing structure, which can incentivize cost control while allowing for profit. 3. With a duration of 3047 days (over 8 years), this represents a significant long-term commitment by the Department of Defense. 4. The North American Industry Classification System (NAICS) code 541330 points to a focus on engineering services, a critical component of defense infrastructure. 5. The contract was awarded to CH2M HILL CONSTRUCTORS, INC., a major player in the engineering and construction sector. 6. The contract's value of approximately $45.7 million over its extended period suggests substantial project scope and complexity.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific deliverables and performance metrics. The CPFF structure can lead to cost overruns if not managed tightly. However, the duration and scale suggest a significant need for engineering services within the Department of Defense. Comparing it to similar long-term, large-scale engineering contracts would be necessary for a more precise value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES.' This suggests that while an initial broad competition may have occurred, certain sources were excluded before the final award. The specific reasons for exclusion are not detailed, which limits the understanding of the competitive landscape. The number of bidders is not specified, making it difficult to assess the intensity of the competition.

Taxpayer Impact: The exclusion of sources, even if justified, may have limited the potential for the government to secure the most competitive pricing. Taxpayers may not have benefited from the full spectrum of market competition.

Public Impact

The Department of Defense benefits from specialized engineering expertise for its projects. Services delivered likely include design, planning, and oversight for defense infrastructure or facilities. The geographic impact is likely concentrated around the facilities or projects managed by the Defense Contract Management Agency (DCMA) in Colorado. The contract supports a workforce of engineers, project managers, and support staff within CH2M HILL CONSTRUCTORS, INC. and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in Cost Plus Fixed Fee contracts if not rigorously managed.
The 'exclusion of sources' clause warrants further investigation into the justification and impact on competition.
Long contract duration increases the risk of scope creep or evolving requirements not being adequately addressed.

Positive Signals

Award to a known entity (CH2M HILL CONSTRUCTORS, INC.) suggests a level of confidence in their capabilities.
The extensive duration indicates a stable, ongoing need that the contractor is positioned to fulfill.
The contract falls under the purview of the Defense Contract Management Agency, implying established oversight processes.

Sector Analysis

Engineering services, classified under NAICS code 541330, represent a significant market within the broader professional, scientific, and technical services sector. This sector is crucial for supporting government infrastructure projects, including those for defense. The market is characterized by a mix of large, established firms like CH2M HILL CONSTRUCTORS, INC. and smaller specialized engineering consultancies. Government contracts often represent a substantial portion of revenue for firms in this space, driving demand for specialized expertise in areas like civil, mechanical, and electrical engineering.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. There is no explicit information regarding subcontracting plans for small businesses. Without this information, it's difficult to assess the direct impact on the small business ecosystem, though large prime contractors often engage small businesses for specialized tasks.

Oversight & Accountability

Oversight for this contract would likely fall under the Defense Contract Management Agency (DCMA), given the agency and contract award details. DCMA is responsible for ensuring contractors meet performance requirements and adhere to contract terms. Transparency is facilitated through contract award databases, but detailed performance reports and Inspector General findings would require specific inquiries.

Related Government Programs

Department of Defense Facilities Engineering
Defense Contract Management Agency Support Services
Engineering and Architectural Services Contracts
Long-Term Government Service Contracts

Risk Flags

Potential for cost overruns due to CPFF structure.
Limited transparency regarding the exclusion of sources.
Long contract duration increases risk exposure.
Lack of explicit small business subcontracting details.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $45.8 million to CH2M HILL CONSTRUCTORS, INC.. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is CH2M HILL CONSTRUCTORS, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $45.8 million.

What is the period of performance?

Start: 2002-05-21. End: 2010-09-23.

What specific types of engineering projects did CH2M HILL CONSTRUCTORS, INC. undertake under this contract?

The provided data indicates the contract falls under NAICS code 541330 (Engineering Services) and was awarded by the Department of Defense. While the specific project details are not available in the summary data, engineering services contracts of this nature typically encompass a wide range of activities. These could include preliminary design, detailed engineering, construction management, environmental assessments, and technical support for military installations, infrastructure upgrades, or specialized defense facilities. The significant value and long duration suggest complex, multi-faceted projects rather than simple, short-term tasks. Further investigation into contract line item numbers (CLINs) or task orders would be necessary to identify the precise nature of the work performed.

How does the Cost Plus Fixed Fee (CPFF) pricing structure compare to other contract types used by the DoD for similar services?

Cost Plus Fixed Fee (CPFF) contracts are common for complex projects where the scope is not fully defined at the outset, or where innovation and flexibility are paramount, such as in research and development or certain engineering services. The DoD utilizes various contract types, including Firm-Fixed-Price (FFP) for well-defined scopes, Cost-Plus-Incentive-Fee (CPIF) which incentivizes both parties to control costs, and Time and Materials (T&M) for smaller, less predictable efforts. CPFF allows the contractor to recover all allowable costs plus a predetermined fixed fee, which represents profit. While it offers flexibility, it carries a risk of cost overruns if the government's oversight is insufficient, as the contractor has less direct financial incentive to minimize costs compared to FFP. For engineering services, CPFF is often chosen when the government wants to ensure access to the contractor's expertise without precisely defining every deliverable upfront, balancing flexibility with cost control through the fixed fee.

What were the primary risks associated with this contract, and how were they managed?

The primary risks associated with this CPFF contract likely included cost overruns, scope creep, and performance deficiencies. Given the long duration (over 8 years), there was also a risk of evolving technological requirements or changes in strategic needs that could impact the project's relevance. Cost overruns are a inherent risk in CPFF if the government's cost accounting and auditing processes are not robust. Scope creep, where the project's objectives expand beyond the original agreement, is another significant risk, especially in long-term contracts. Performance deficiencies could arise if the contractor lacked the necessary expertise or resources. Management of these risks would typically involve rigorous government oversight, including regular progress reviews, audits of contractor costs, clear definition and control of task orders, and performance monitoring against established metrics. The 'exclusion of sources' aspect also presents a potential risk if it limited the pool of highly capable or cost-effective bidders.

What is the historical spending trend for engineering services (NAICS 541330) by the Department of Defense?

The Department of Defense is consistently one of the largest federal agencies procuring engineering services, as reflected by the substantial value of contracts like the one awarded to CH2M HILL CONSTRUCTORS, INC. Historical spending data reveals a significant and often increasing demand for these services, driven by the need to maintain, upgrade, and develop military infrastructure, bases, and specialized facilities worldwide. Factors influencing this spending include geopolitical conditions, modernization initiatives, base realignment and closure (BRAC) actions, and the lifecycle management of existing assets. While specific annual figures fluctuate based on budget allocations and project pipelines, the overall trend indicates a sustained high level of investment in engineering and related professional services to support national defense objectives. This contract, awarded in 2002 and spanning over eight years, aligns with this pattern of long-term, high-value engineering procurements.

What does the 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' designation imply about the procurement process?

The designation 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' indicates a multi-stage procurement process. Initially, the solicitation was intended for full and open competition, meaning all responsible sources were permitted to submit an offer. However, at some point during the process, certain sources were excluded. The Federal Acquisition Regulation (FAR) allows for exclusion of sources under specific circumstances, such as when a source fails to meet minimum responsibility standards, when a contract requires specialized capabilities only available from a limited number of sources, or when specific national security concerns are involved. Without further details on the justification for exclusion, it's difficult to ascertain the precise implications. It suggests that while the government aimed for broad competition, factors led to a narrowing of the field before the final award, potentially impacting the diversity of bidders and the ultimate price competitiveness.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Offers Received: 30

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: CH2M Hill Companies, Ltd. (UEI: 027620574)

Address: 6060 S WILLOW DRIVE, GREENWOOD VILL, CO

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: F4162401D8545

IDV Type: IDC

Timeline