Interior Department awards $7.98M contract for Alaska oil and gas support to Olgoonik Oilfield Services

Contract Overview

Contract Amount: $7,978,207 ($8.0M)

Contractor: Olgoonik Oilfield Services, LLC

Awarding Agency: Department of the Interior

Start Date: 2025-11-20

End Date: 2029-06-10

Contract Duration: 1,298 days

Daily Burn Rate: $6.1K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: SKULL CLIFF #1 WELL PLUGGING, ABANDONMENT & REMEDIATION, NATIONAL PETROLEUM RESERVE - ALASKA.

Place of Performance

Location: BARROW, NORTH SLOPE County, ALASKA, 99723

State: Alaska Government Spending

Plain-Language Summary

Department of the Interior obligated $8.0 million to OLGOONIK OILFIELD SERVICES, LLC for work described as: SKULL CLIFF #1 WELL PLUGGING, ABANDONMENT & REMEDIATION, NATIONAL PETROLEUM RESERVE - ALASKA. Key points: 1. Contract focuses on well plugging, abandonment, and remediation in Alaska's National Petroleum Reserve. 2. Olgoonik Oilfield Services, an Alaska Native Corporation, is the awardee. 3. The contract has a duration of approximately 3.6 years. 4. Funding is allocated for Support Activities for Oil and Gas Operations. 5. The contract type is Firm Fixed Price, indicating predictable costs. 6. Awarded via full and open competition after exclusion of sources, suggesting a specific justification for limited initial bidders. 7. The total value is $7,978,207.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific details on the scope of work for well plugging, abandonment, and remediation. The firm fixed-price structure provides cost certainty for the government. However, the total award amount of $7.98 million over nearly four years suggests a moderate investment for the services rendered in a remote and challenging environment like the National Petroleum Reserve - Alaska. Further analysis would require comparing the deliverables and unit costs against similar projects in the region or for similar types of environmental remediation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was awarded under 'Full and Open Competition After Exclusion of Sources.' This procurement method implies that while the competition was intended to be open, specific sources were initially excluded, and then the remaining pool was competed. The exact reasons for the initial exclusion are not detailed but often relate to specific capabilities, past performance, or unique requirements. The number of bidders is not specified, but the 'exclusion of sources' suggests a potentially narrower field than a purely full and open competition.

Taxpayer Impact: The 'exclusion of sources' aspect may limit the breadth of competitive pricing, potentially leading to higher costs for taxpayers compared to a scenario with broader initial participation. However, if the excluded sources were truly not capable, the competition among the remaining qualified bidders could still yield reasonable prices.

Public Impact

The primary beneficiaries are the environmental integrity of the National Petroleum Reserve - Alaska and the Department of the Interior's mandate for responsible resource management. Services delivered include plugging and abandoning oil and gas wells, along with associated remediation activities. The geographic impact is concentrated within the National Petroleum Reserve - Alaska, a significant area in the state. The contract supports specialized jobs in oilfield services, likely benefiting the local Alaskan workforce, particularly in regions where Olgoonik Oilfield Services operates.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'exclusion of sources' in the competition method warrants further investigation to ensure it did not unduly restrict competition and potentially inflate costs.
Lack of detailed scope of work makes it difficult to assess if the $7.98M represents optimal value for the environmental remediation and abandonment services.
The remote location of the National Petroleum Reserve - Alaska can inherently increase operational costs and logistical challenges, potentially impacting overall project efficiency.

Positive Signals

Awarding to Olgoonik Oilfield Services, an Alaska Native Corporation, aligns with federal goals to support businesses owned by indigenous peoples.
The firm fixed-price contract type provides budget certainty for the government, mitigating cost overrun risks.
The contract duration of nearly four years allows for sustained effort and potentially better project planning and execution in a challenging environment.

Sector Analysis

The oil and gas services sector, particularly environmental remediation and well decommissioning, is critical for managing the legacy of energy exploration. This contract falls within the Support Activities for Oil and Gas Operations category. The National Petroleum Reserve - Alaska is a vast area with significant oil and gas potential, necessitating ongoing management of existing infrastructure, including wells that require plugging and abandonment. Spending in this niche can fluctuate based on regulatory requirements, environmental concerns, and the lifecycle of oilfield operations. Comparable spending benchmarks would typically be found within federal agencies managing public lands with historical energy extraction activities.

Small Business Impact

Olgoonik Oilfield Services, LLC is an Alaska Native Corporation (ANC). ANCs are socio-economic set-asides, and contracts awarded to them are often considered to benefit small businesses indirectly through employment and economic development within their communities. This contract does not appear to be a specific small business set-aside in the traditional sense but rather an award to an entity that qualifies for special consideration under federal programs for Native corporations. Subcontracting opportunities for other small businesses may exist, but are not explicitly detailed in the provided data.

Oversight & Accountability

Oversight for this contract will likely be managed by the Bureau of Land Management (BLM), a division of the Department of the Interior. The BLM has established procedures for contract oversight, performance monitoring, and ensuring compliance with contract terms. Given the nature of the work (environmental remediation and well abandonment), specific environmental compliance and safety regulations will be critical. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would typically fall under the Department of the Interior's Office of Inspector General for any potential fraud, waste, or abuse.

Related Government Programs

Bureau of Land Management Oil and Gas Leasing and Operations
Environmental Remediation Services Contracts
Well Plugging and Abandonment Programs
National Petroleum Reserve - Alaska Management
Alaska Native Corporation Contracting

Risk Flags

Procurement method 'Full and Open Competition After Exclusion of Sources' requires scrutiny to ensure fair competition.
Remote location in Alaska's National Petroleum Reserve presents logistical and operational challenges.
Environmental remediation work carries inherent risks of unforeseen contamination or issues.
Lack of detailed scope of work hinders comprehensive value-for-money assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Interior awarded $8.0 million to OLGOONIK OILFIELD SERVICES, LLC. SKULL CLIFF #1 WELL PLUGGING, ABANDONMENT & REMEDIATION, NATIONAL PETROLEUM RESERVE - ALASKA.

Who is the contractor on this award?

The obligated recipient is OLGOONIK OILFIELD SERVICES, LLC.

Which agency awarded this contract?

Awarding agency: Department of the Interior (Bureau of Land Management).

What is the total obligated amount?

The obligated amount is $8.0 million.

What is the period of performance?

Start: 2025-11-20. End: 2029-06-10.

What is the specific scope of work for the well plugging, abandonment, and remediation activities covered by this contract?

The provided data indicates the contract is for 'SKULL CLIFF #1 WELL PLUGGING, ABANDONMENT & REMEDIATION, NATIONAL PETROLEUM RESERVE - ALASKA.' While the exact deliverables are not detailed, this typically involves a multi-step process. Plugging involves sealing the wellbore to prevent fluid migration between geological formations and to the surface. Abandonment includes securing the wellhead and surface equipment. Remediation addresses any environmental contamination resulting from the well's operations or its current state. The specific number of wells, the depth and complexity of each well, and the extent of any required soil or groundwater cleanup would define the detailed scope and justify the contract's value. Without this granular detail, a precise assessment of value-for-money is limited.

How does the $7.98 million contract value compare to similar well plugging and abandonment projects in remote Arctic environments?

Direct comparison of the $7.98 million contract value to similar projects is difficult without detailed project specifications, such as the number and type of wells, their depth, geological complexity, and the specific remediation required. However, projects in remote Arctic regions like the National Petroleum Reserve - Alaska are inherently more expensive due to logistical challenges, harsh weather conditions, and specialized equipment needs. The contract duration of nearly four years suggests a substantial scope of work. To benchmark effectively, one would need data on the cost per well plugged and abandoned, or cost per unit of remediation, for comparable projects managed by agencies like the BLM or other entities operating in similar environments. The firm fixed-price nature suggests the contractor has factored these complexities into their bid.

What are the potential risks associated with this contract, given its location and the nature of the work?

Several risks are associated with this contract. Environmental risks include the potential for unforeseen contamination during remediation, spills, or inadequate plugging leading to future leaks. Operational risks stem from the remote Arctic location, including extreme weather, limited access, potential equipment failures, and the need for specialized safety protocols. Logistical risks involve transportation of personnel and equipment, which can be costly and subject to delays. Furthermore, the 'exclusion of sources' in the procurement process could indicate a risk that the chosen contractor may not have faced the most competitive pricing. Finally, the long duration increases the risk of changing regulatory requirements or unforeseen geological challenges.

What is the track record of Olgoonik Oilfield Services, LLC in performing similar environmental remediation and well abandonment contracts for the federal government?

Olgoonik Oilfield Services, LLC is an Alaska Native Corporation (ANC) that has been awarded federal contracts. Information on their specific track record for well plugging, abandonment, and remediation is not detailed in the provided data. ANCs often have a broad range of capabilities. To assess their track record, one would need to review their past performance evaluations on similar federal contracts, particularly those involving environmental services or oil and gas support in challenging environments. Databases like the Federal Procurement Data System (FPDS) and contractor performance assessment reporting systems (CPARS) would be the primary sources for this information. A review of past performance would indicate their reliability, quality of work, and adherence to schedule and budget on previous projects.

How does the 'Full and Open Competition After Exclusion of Sources' procurement method impact the potential for cost savings for taxpayers?

The 'Full and Open Competition After Exclusion of Sources' method presents a mixed impact on taxpayer savings. On one hand, it aims for competition among qualified bidders, which generally drives down prices. However, the initial exclusion of certain sources means the competition pool is smaller than a standard 'Full and Open Competition.' If the excluded sources were capable and could have offered competitive bids, their exclusion might limit the downward pressure on pricing. The extent of savings depends heavily on the number of bidders remaining after the exclusion and the competitiveness of their proposals. If the excluded sources were genuinely incapable or unwilling to bid, then the competition among the remaining bidders could still yield good value. A thorough justification for the exclusion is key to understanding its impact.

Industry Classification

NAICS: Mining, Quarrying, and Oil and Gas Extraction › Support Activities for Mining › Support Activities for Oil and Gas Operations

Product/Service Code: MAINT, REPAIR, ALTER REAL PROPERTY › MAINT, ALTER, REPAIR NONBUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Olgoonik Oilfield Services LLC

Address: 3201 C ST. SUITE 700, ANCHORAGE, AK, 99503

Business Categories: Alaskan Native Corporation Owned Firm, Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Minority Owned Business, Native American Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $7,978,207

Exercised Options: $7,978,207

Current Obligation: $7,978,207

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 140L0624D0005

IDV Type: IDC

Timeline