DoD's $79M environmental remediation contract awarded to CH2M HILL CONSTRUCTORS, INC. for services in 2005
Contract Overview
Contract Amount: $79,292,566 ($79.3M)
Contractor: CH2M Hill Constructors, Inc.
Awarding Agency: Department of Defense
Start Date: 2005-08-25
End Date: 2006-05-31
Contract Duration: 279 days
Daily Burn Rate: $284.2K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 10
Pricing Type: COST PLUS FIXED FEE
Sector: Other
Plain-Language Summary
Department of Defense obligated $79.3 million to CH2M HILL CONSTRUCTORS, INC. for work described as: Key points: 1. The contract's value of approximately $79 million represents a significant investment in environmental cleanup. 2. Awarded under full and open competition, suggesting a robust bidding process. 3. The cost-plus-fixed-fee contract type may introduce cost escalation risks. 4. The short duration of 279 days indicates a focused, project-specific remediation effort. 5. The absence of small business set-aside flags suggests larger firms dominated the bidding. 6. Performance context is limited without specific details on remediation outcomes.
Value Assessment
Rating: fair
Benchmarking the value of this $79 million contract is challenging without specific details on the scope of remediation. However, the cost-plus-fixed-fee structure can sometimes lead to higher final costs compared to fixed-price contracts if not managed tightly. Comparing it to similar large-scale environmental remediation projects would provide better context for value for money.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that multiple bidders were likely considered. This approach generally fosters competitive pricing and allows the government to select the most capable and cost-effective solution. The presence of 10 bids suggests a healthy level of interest and competition for this remediation work.
Taxpayer Impact: Full and open competition is beneficial for taxpayers as it drives down costs through market forces and ensures that the government receives competitive pricing for essential services.
Public Impact
The Department of the Air Force benefits from environmental cleanup services, ensuring compliance and reducing long-term liabilities. This contract supports the delivery of critical environmental remediation services, likely addressing hazardous waste or contaminated sites. The geographic impact is tied to the specific Air Force installation where the remediation took place. The contract likely involved a workforce of environmental scientists, engineers, and technicians.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost-plus-fixed-fee contracts can incentivize cost overruns if not rigorously monitored.
- The limited duration might indicate a specific phase of a larger, ongoing environmental issue.
- Lack of specific performance metrics makes it difficult to assess the effectiveness of the remediation.
Positive Signals
- Awarded through full and open competition, suggesting a competitive process.
- The contractor, CH2M HILL CONSTRUCTORS, INC., is a known entity in the engineering and construction sector.
- The contract addresses essential environmental remediation, a critical government function.
Sector Analysis
Environmental remediation services fall under the broader engineering and construction sector. This contract represents a specific instance of government spending on environmental cleanup, a recurring need for agencies managing large land holdings and historical operations. The market for such services is competitive, with numerous firms specializing in hazardous waste management, site assessment, and remediation technologies.
Small Business Impact
The data indicates that this contract was not set aside for small businesses and that small business participation was not a stated requirement. This suggests that the scope and complexity of the remediation services likely favored larger, established contracting firms with specialized expertise and resources.
Oversight & Accountability
Oversight for this contract would typically be managed by the contracting officer and the relevant program office within the Department of the Air Force. Accountability measures would be tied to the terms of the cost-plus-fixed-fee contract, including progress reports, milestone achievements, and final delivery of services. Transparency is generally facilitated through contract award databases, though specific performance details may be less publicly accessible.
Related Government Programs
- Environmental Restoration, Superfund
- Hazardous Waste Management
- Site Remediation Services
Risk Flags
- Cost-plus-fixed-fee contract type may lead to cost overruns.
- Limited duration could indicate a partial scope of a larger environmental issue.
- Lack of specific performance metrics hinders effectiveness assessment.
Tags
defense, department-of-defense, department-of-the-air-force, environmental-remediation, remediation-services, cost-plus-fixed-fee, full-and-open-competition, large-contract, federal-contract, us-air-force
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $79.3 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 (Department of the Air Force).
What is the total obligated amount?
The obligated amount is $79.3 million.
What is the period of performance?
Start: 2005-08-25. End: 2006-05-31.
What was the specific scope of work for this environmental remediation contract?
The provided data indicates the contract was for 'Remediation Services' under NAICS code 562910. While the exact scope is not detailed, this typically involves the cleanup of contaminated soil, groundwater, or structures at military installations. Services could include site assessment, risk analysis, containment, removal, treatment, and disposal of hazardous materials. The contract's duration of 279 days suggests a focused effort on a particular site or phase of remediation, rather than a comprehensive, long-term cleanup program.
How does the cost-plus-fixed-fee (CPFF) structure typically impact project costs and contractor incentives?
A Cost-Plus-Fixed-Fee (CPFF) contract reimburses the contractor for all allowable costs incurred, plus a predetermined fixed fee representing profit. This structure is often used when the scope of work is not well-defined or involves significant uncertainty, making it difficult to estimate costs accurately upfront. While it allows for flexibility, it can incentivize contractors to incur higher costs, as their fee remains constant regardless of the final project expense. Effective government oversight is crucial to control costs and ensure the contractor remains efficient and avoids unnecessary expenditures.
What is the significance of the 10 bids received for this contract?
Receiving 10 bids for this contract, awarded under full and open competition, suggests a competitive marketplace for environmental remediation services. A higher number of bids generally indicates strong interest from potential contractors and increases the likelihood that the government will receive competitive pricing and select the most qualified offeror. This level of competition is a positive indicator for value for money and demonstrates that the contract opportunity was accessible to a reasonable number of firms.
What are the potential long-term implications of environmental remediation projects for the Department of Defense?
Environmental remediation projects are crucial for the Department of Defense (DoD) to address legacy contamination from past activities, comply with environmental regulations, and mitigate long-term environmental and health risks. Successful remediation reduces potential liabilities, improves the environmental condition of military installations, and supports community relations. These projects are often complex, costly, and can span many years, requiring sustained investment and management to ensure effective cleanup and protect natural resources.
How does the NAICS code 562910 (Remediation Services) relate to the contract's purpose?
The North American Industry Classification System (NAICS) code 562910 specifically identifies establishments primarily engaged in cleaning up sites contaminated with hazardous waste. This includes activities such as site remediation, hazardous waste treatment and disposal, and environmental consulting related to cleanup. Awarding this contract under NAICS 562910 confirms that the core purpose was the physical cleanup and restoration of a contaminated environment, aligning with the Department of Defense's need to manage environmental liabilities on its installations.
Industry Classification
NAICS: Administrative and Support and Waste Management and Remediation Services › Remediation and Other Waste Management Services › Remediation Services
Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCTION OF BUILDINGS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 10
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: CH2M Hill Companies, Ltd. (UEI: 027620574)
Address: 9191 SOUTH JAMAICA STREET, ENGLEWOOD, CO, 80112
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $79,292,566
Exercised Options: $79,292,566
Current Obligation: $79,292,566
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: FA890304D8670
IDV Type: IDC
Timeline
Start Date: 2005-08-25
Current End Date: 2006-05-31
Potential End Date: 2006-05-31 00:00:00
Last Modified: 2017-09-06
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