Forest Service awards $48.4M for wildfire retardant services, a sole-source contract with potential value concerns

Contract Overview

Contract Amount: $48,381,721 ($48.4M)

Contractor: Perimeter Solutions LP

Awarding Agency: Department of Agriculture

Start Date: 2023-01-01

End Date: 2024-07-12

Contract Duration: 558 days

Daily Burn Rate: $86.7K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: NATIONAL RETARDANT - FULL SERVICE, 2023 IQ-NOCOMMIT

Place of Performance

Location: BOISE, ADA County, IDAHO, 83705

State: Idaho Government Spending

Plain-Language Summary

Department of Agriculture obligated $48.4 million to PERIMETER SOLUTIONS LP for work described as: NATIONAL RETARDANT - FULL SERVICE, 2023 IQ-NOCOMMIT Key points: 1. The contract was awarded on a sole-source basis, limiting competitive pricing advantages. 2. The fixed-price contract structure may offer cost certainty but could miss opportunities for savings through competition. 3. Performance is tied to a delivery order under a larger contract, suggesting a need for ongoing support. 4. The duration of the contract extends over a year, indicating a significant operational requirement. 5. The specific service relates to wildfire retardant, a critical component of wildland fire management.

Value Assessment

Rating: questionable

The contract's value of $48.4 million for wildfire retardant services warrants scrutiny due to its sole-source nature. Without competitive bidding, it's difficult to benchmark the pricing against market rates or alternative providers. The firm fixed-price structure provides cost predictability but may not reflect the best possible value for taxpayer dollars if the pricing is not rigorously justified. Further analysis of historical pricing for similar services and the specific components of the retardant delivery would be necessary to fully assess value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor can provide the required goods or services, or in specific emergency situations. The lack of competition means that the government did not benefit from the price discovery and potential cost savings that typically arise from a competitive bidding process. The justification for this sole-source award would need to be thoroughly reviewed to ensure it was appropriate.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as they bypass the natural downward pressure on prices that competition provides. This limits the government's ability to secure the most economical solution.

Public Impact

The primary beneficiaries are the US Forest Service and potentially other federal and state agencies relying on wildfire suppression resources. The service delivered is the provision of wildfire retardant, crucial for combating forest fires. The geographic impact is likely focused on areas prone to wildfires, particularly within the operational regions of the Forest Service. This contract supports the critical infrastructure and personnel involved in wildland fire management and response.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potential taxpayer savings.
Lack of transparency in pricing justification due to non-competitive nature.
Potential for vendor lock-in if alternatives are not explored.
Dependence on a single provider for a critical service.

Positive Signals

Ensures availability of a critical resource for wildfire suppression.
Firm fixed-price contract provides budget certainty for the agency.
Supports ongoing operations for a vital national service.

Sector Analysis

The wildfire suppression industry is a specialized sector within the broader environmental services and defense support markets. It involves the production, distribution, and application of retardants and other firefighting agents. Spending in this sector is often driven by seasonal demands and the severity of wildfire seasons, which can be influenced by climate change and land management practices. This contract represents a significant investment in ensuring the availability of essential resources for national wildfire management efforts.

Small Business Impact

There is no indication that this contract included a small business set-aside. Given the specialized nature of wildfire retardant supply and the sole-source award, it is unlikely that small businesses were directly involved as prime contractors. Subcontracting opportunities for small businesses would depend on the specific capabilities required by the prime contractor, Perimeter Solutions LP, and their procurement practices.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Agriculture's Forest Service contracting and program management offices. Accountability measures would be defined by the contract terms and conditions, including performance standards and delivery schedules. Transparency may be limited due to the sole-source nature of the award, but contract details and justifications should be publicly accessible through federal procurement databases. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Wildfire Management Programs
Forestry and Rangeland Management
Emergency Response Services
Aviation Support Services

Risk Flags

Sole-source award
Potential for non-competitive pricing
Critical service dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $48.4 million to PERIMETER SOLUTIONS LP. NATIONAL RETARDANT - FULL SERVICE, 2023 IQ-NOCOMMIT

Who is the contractor on this award?

The obligated recipient is PERIMETER SOLUTIONS LP.

Which agency awarded this contract?

Awarding agency: Department of Agriculture (Forest Service).

What is the total obligated amount?

The obligated amount is $48.4 million.

What is the period of performance?

Start: 2023-01-01. End: 2024-07-12.

What is the historical spending pattern for wildfire retardant services by the Forest Service?

Historical spending on wildfire retardant services by the Forest Service can fluctuate significantly year-to-year, heavily influenced by the severity of wildfire seasons and the specific needs for aerial and ground-based suppression. While this specific contract is for $48.4 million, broader spending encompasses procurement of retardant chemicals, delivery systems, aircraft, and related support. Analyzing past contract awards for similar services, especially those that were competitively bid, can provide a benchmark for assessing the value of current sole-source awards. For instance, if previous competitively awarded contracts for comparable volumes of retardant and delivery services were significantly lower, it would raise questions about the pricing of this sole-source award. The Forest Service often uses a mix of contract types, including indefinite-delivery indefinite-quantity (IDIQ) contracts and individual delivery orders, to manage these needs.

How does the pricing of this contract compare to similar services procured competitively?

Direct comparison of this $48.4 million sole-source contract to competitively procured services is challenging without access to detailed pricing structures and specific service level agreements of other contracts. However, sole-source awards inherently bypass the price discovery mechanisms of competition, which typically drive down costs. If comparable competitively awarded contracts for similar volumes of retardant, delivery, and support services exist, their pricing would serve as a crucial benchmark. A significant deviation upwards in price for this sole-source contract, without clear justification for increased costs (e.g., unique logistical challenges, advanced technology), would indicate potentially poorer value for money. The firm fixed-price nature here means the government agreed to a set price, which, in a sole-source scenario, relies heavily on the contractor's pricing justification and the agency's negotiation leverage.

What are the key performance indicators (KPIs) for this contract and how is performance being measured?

The specific Key Performance Indicators (KPIs) for this 'NATIONAL RETARDANT - FULL SERVICE' contract are not detailed in the provided data. However, for wildfire retardant services, typical KPIs would likely include: timeliness of delivery to designated air tanker bases or drop zones, quality and concentration of the retardant mixture, availability of personnel and equipment as needed during peak fire seasons, adherence to safety protocols, and overall effectiveness in supporting firefighting operations. Performance measurement would involve monitoring delivery logs, incident reports, and potentially feedback from incident commanders. The Forest Service would be responsible for tracking these metrics and ensuring that Perimeter Solutions LP meets the contractual obligations. Failure to meet KPIs could result in penalties or contract termination, depending on the severity of the performance issues.

What is the track record of Perimeter Solutions LP in delivering similar services to the federal government?

Perimeter Solutions LP is a significant player in the wildfire management sector, known for its production and supply of fire retardants and foams. They have a history of supplying the U.S. Forest Service and other agencies. Their track record would involve assessing past contract performance, including on-time delivery, product quality, responsiveness to agency needs, and any history of disputes or contract modifications. Given their established presence, it's likely they have fulfilled numerous orders and contracts related to wildfire suppression. A thorough review would involve examining past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS) and any publicly available information on their operational history and reliability in high-demand, critical situations like wildfire response.

Are there any identified risks associated with this sole-source contract for wildfire retardant supply?

Yes, there are several identified risks associated with this sole-source contract. The primary risk is financial: the lack of competition may lead to inflated pricing and reduced value for taxpayer money. There's also an operational risk of vendor dependency; if Perimeter Solutions LP faces production issues, supply chain disruptions, or internal problems, it could directly impact the availability of critical wildfire retardant, potentially hindering firefighting efforts. Furthermore, the absence of competitive pressure might reduce the incentive for the contractor to innovate or improve efficiency. Ensuring robust oversight and justification for the sole-source award is crucial to mitigate these risks. The government must be confident that the price is fair and reasonable and that the contractor can consistently meet demand.

Industry Classification

NAICS: Agriculture, Forestry, Fishing and Hunting › Support Activities for Forestry › Support Activities for Forestry

Product/Service Code: NATURAL RESOURCES MANAGEMENT › NATURAL RESOURCE CONSERVERVAT SVCS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 3737 MARSHALL AVE, SAINT LOUIS, MO, 63119

Business Categories: Category Business, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations

Financial Breakdown

Contract Ceiling: $48,381,721

Exercised Options: $48,381,721

Current Obligation: $48,381,721

Actual Outlays: $48,381,721

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 12024B18D9025

IDV Type: IDC

Timeline