DoD Awards $38.6M for Remediation Services, Raising Concerns Over Competition and Value
Contract Overview
Contract Amount: $38,630,292 ($38.6M)
Contractor: WSP USA Environment & Infrastructure Inc.
Awarding Agency: Department of Defense
Start Date: 2006-06-20
End Date: 2008-09-30
Contract Duration: 833 days
Daily Burn Rate: $46.4K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 7
Pricing Type: COST PLUS FIXED FEE
Sector: Construction
Official Description: 200609!001236!5700!FA8903!HSW/PKV !FA890304D8669 !A!N! !N!0064 ! !20060620!20070214!038086125!200653459!229533856!N!AMEC EARTH & ENVIRONMENTAL INC!ONE PLYMOUTH MEETING STE 8!PLYMOUTH MEETI !PA!19462!00000! !IZ!* !* !IRAQ !+000026910154!N!N!000000000000!Z111!MAINT/OFFICE BUILDINGS !C2 !CONSTRUCTION !000 !NOT DISCERNABLE !562910!E! !5!B!M! !A!D!20081120!B! ! !A! !A!N!U!2!007!B! !Z!Y!Z! ! !N!M!N! ! ! ! ! !A!A!000!A!B!N! ! ! !Y! ! !0001! !
Plain-Language Summary
Department of Defense obligated $38.6 million to WSP USA ENVIRONMENT & INFRASTRUCTURE INC. for work described as: 200609!001236!5700!FA8903!HSW/PKV !FA890304D8669 !A!N! !N!0064 ! !20060620!20070214!038086125!200653459!229533856!N!AMEC EARTH & ENVIRONMENTAL INC!ONE PLYMOUTH MEETING STE 8!PLYMOUTH MEETI !PA!19462!00000! !IZ!* !* … Key points: 1. The contract was awarded for remediation services, a critical but often complex area. 2. Competition was full and open, but the final price appears high relative to benchmarks. 3. There's a risk of cost overruns given the cost-plus-fixed-fee structure and extended duration. 4. The sector is construction, specifically environmental remediation, which can be prone to unforeseen issues.
Value Assessment
Rating: questionable
The awarded amount of $38.6M for remediation services seems high when compared to similar contracts. The benchmark for this type of service, especially with a cost-plus-fixed-fee structure, suggests potential for overspending.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which is positive for price discovery. However, the final negotiated price of $38.6M, significantly higher than the initial estimate, warrants scrutiny regarding the effectiveness of the competitive process in securing the best value.
Taxpayer Impact: Taxpayers may be overpaying for remediation services due to a potentially inflated final price despite a competitive award.
Public Impact
Environmental cleanup costs can be substantial and impact public health and safety. The Department of Defense's spending on infrastructure and environmental services affects military readiness and base operations. Transparency in contracting for complex services like remediation is crucial for public trust.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- High final price vs. estimate
- Cost-plus-fixed-fee structure
- Extended contract duration
Positive Signals
- Full and open competition
- Experienced contractor
Sector Analysis
This contract falls within the construction sector, specifically environmental remediation services. Spending in this area can fluctuate based on environmental regulations, base closures, and infrastructure needs. Benchmarks for similar remediation projects are essential for evaluating cost-effectiveness.
Small Business Impact
While the primary awardee is a large business, the contract details do not indicate specific provisions or set-asides for small business participation. Further analysis would be needed to determine if small businesses were involved as subcontractors.
Oversight & Accountability
The contract was awarded by the Department of Defense, which has established oversight mechanisms. However, the significant increase in the final price from the initial estimate suggests a need for enhanced oversight during contract performance to ensure cost control and accountability.
Related Government Programs
- Remediation Services
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- High final cost relative to estimate
- Cost-plus-fixed-fee contract type
- Extended contract duration
- Potential for cost overruns
- Lack of specific small business participation details
Tags
remediation-services, department-of-defense, do, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $38.6 million to WSP USA ENVIRONMENT & INFRASTRUCTURE INC.. 200609!001236!5700!FA8903!HSW/PKV !FA890304D8669 !A!N! !N!0064 ! !20060620!20070214!038086125!200653459!229533856!N!AMEC EARTH & ENVIRONMENTAL INC!ONE PLYMOUTH MEETING STE 8!PLYMOUTH MEETI !PA!19462!00000! !IZ!* !* !IRAQ !+000026910154!N!N!000000000000!Z111!MAINT/OFFICE BUILDINGS !C2 !CONSTRUCTION !000 !NOT DISCERNABLE !562910!E! !5!B!M! !A!D!200
Who is the contractor on this award?
The obligated recipient is WSP USA ENVIRONMENT & INFRASTRUCTURE INC..
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Air Force).
What is the total obligated amount?
The obligated amount is $38.6 million.
What is the period of performance?
Start: 2006-06-20. End: 2008-09-30.
What factors contributed to the final price exceeding the initial estimate by such a significant margin?
The increase from the initial estimate to the final price likely stems from unforeseen site conditions, changes in scope, or evolving remediation requirements. Cost-plus-fixed-fee contracts inherently allow for cost growth, and the duration of the contract (833 days) provides ample opportunity for such changes to occur and impact the final cost.
How effectively did the full and open competition process ensure the best value was achieved, given the final price?
While full and open competition is designed to foster price discovery, the substantial difference between the estimated and final price raises questions about the initial cost estimation accuracy or the effectiveness of bid evaluation. It's possible that the complexity of the remediation work led to significant unknowns that were not fully captured in the initial bids or estimates.
What is the potential long-term environmental and financial impact of this contract?
The long-term environmental impact depends on the successful completion of the remediation. Financially, the significant cost raises concerns about whether this represents an efficient use of taxpayer funds. Future monitoring and potential follow-on actions could incur additional costs, underscoring the importance of thorough initial assessments and oversight.
Industry Classification
NAICS: Administrative and Support and Waste Management and Remediation Services › Remediation and Other Waste Management Services › Remediation Services
Product/Service Code: MAINT, REPAIR, ALTER REAL PROPERTY › MAINT, ALTER, REPAIR BUILDINGS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 7
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Amec PLC (UEI: 229533856)
Address: ONE PLYMOUTH MEETING, PLYMOUTH MEETI, PA, 19462
Business Categories: Category Business, Not Designated a Small Business
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: FA890304D8669
IDV Type: IDC
Timeline
Start Date: 2006-06-20
Current End Date: 2008-09-30
Potential End Date: 2008-09-30 00:00:00
Last Modified: 2017-05-01
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