Interior Department awards $63.8M for fire retardant, raising questions on competition and value

Contract Overview

Contract Amount: $63,752,462 ($63.8M)

Contractor: Perimeter Solutions LP

Awarding Agency: Department of the Interior

Start Date: 2024-05-14

End Date: 2024-12-31

Contract Duration: 231 days

Daily Burn Rate: $276.0K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: 2024 LTFR FIRE RETARDANT

Place of Performance

Location: BOISE, ADA County, IDAHO, 83705

State: Idaho Government Spending

Plain-Language Summary

Department of the Interior obligated $63.8 million to PERIMETER SOLUTIONS LP for work described as: 2024 LTFR FIRE RETARDANT Key points: 1. Contract awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. Significant spending on a single product category suggests a reliance on specific suppliers. 3. The contract's duration and value warrant scrutiny for potential cost efficiencies. 4. Performance context is limited due to the lack of competitive bidding. 5. Sector positioning highlights the critical role of chemical manufacturing in public safety. 6. Risk indicators include the absence of a competitive environment and potential for price escalation.

Value Assessment

Rating: questionable

The contract value of $63.8 million for fire retardant is substantial. Without competitive bidding, it is difficult to benchmark the pricing against market rates or similar contracts. The fixed-price nature provides some cost certainty, but the lack of competition raises concerns about whether the government is achieving the best possible value for its investment. Further analysis would be needed to compare unit costs to industry benchmarks if available.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning it was not competed openly. This approach is typically used when only one responsible source can provide the required goods or services. The lack of competition means that multiple bidders were not evaluated, and the government did not benefit from the price reductions and innovations that can arise from a competitive bidding process.

Taxpayer Impact: Taxpayers may be paying a premium for the fire retardant due to the absence of competitive pressure to lower prices. The government's negotiating position is weakened without alternative suppliers to consider.

Public Impact

The primary beneficiaries are federal agencies responsible for wildland firefighting, ensuring the availability of critical suppression materials. Services delivered include the provision of essential fire retardant chemicals, crucial for combating wildfires. Geographic impact is nationwide, supporting firefighting efforts across various regions prone to wildfires. Workforce implications are indirect, supporting the operational capacity of wildland firefighters and related support personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential cost savings.
Lack of transparency in the procurement process due to non-competitive nature.
Potential for over-reliance on a single supplier, creating supply chain risks.
Absence of performance metrics tied to a competitive bidding process makes value assessment difficult.

Positive Signals

Ensures availability of a critical resource for national wildfire management.
Fixed-price contract provides some budget predictability.
Contract addresses a clear and present need for public safety.

Sector Analysis

The chemical manufacturing sector, specifically the production of fire retardants, plays a vital role in environmental management and public safety. This contract falls within the 'All Other Miscellaneous Chemical Product and Preparation Manufacturing' industry. The market for fire retardants is specialized, often driven by government procurement for firefighting purposes. Comparable spending benchmarks are difficult to establish without competitive data, but the scale of this award indicates a significant investment in this niche.

Small Business Impact

This contract does not appear to include a small business set-aside. The sole-source nature of the award further suggests that opportunities for small business subcontracting may be limited unless Perimeter Solutions LP proactively engages them. The impact on the small business ecosystem is likely minimal for this specific award, as it bypasses the typical competitive environment where small businesses might participate.

Oversight & Accountability

Oversight mechanisms for this sole-source contract would primarily involve contract administration by the Bureau of Land Management to ensure delivery and quality. Accountability measures are tied to the contract terms and conditions. Transparency is limited due to the non-competitive award. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Wildland Fire Management Programs
Department of the Interior Procurement
Chemical Product Manufacturing Contracts
Emergency Response Supplies

Risk Flags

Sole-source award raises concerns about fair pricing and competition.
Lack of transparency in the procurement process.
Potential for over-reliance on a single supplier for critical resources.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Interior awarded $63.8 million to PERIMETER SOLUTIONS LP. 2024 LTFR FIRE RETARDANT

Who is the contractor on this award?

The obligated recipient is PERIMETER SOLUTIONS LP.

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 $63.8 million.

What is the period of performance?

Start: 2024-05-14. End: 2024-12-31.

What is the justification for awarding this contract on a sole-source basis?

The provided data indicates the contract was awarded as 'NOT COMPETED' and classified as 'sole-source'. Typically, sole-source awards are justified when only one responsible source is available to meet the government's needs. This could be due to unique capabilities, proprietary technology, or urgent and compelling circumstances where competition is not feasible. Without further documentation from the agency (e.g., a Justification for Other Than Full and Open Competition - JOFOC), the specific reasons remain unclear. This lack of competition is a key area for scrutiny regarding potential value for taxpayers.

How does the price of this fire retardant compare to market rates or similar government contracts?

Direct comparison of the price is challenging without access to specific unit costs and a competitive bidding history. The contract is for 'FIRE RETARDANT' with a total value of $63,752,462.09. Since it was awarded on a sole-source basis, there's no direct competitive benchmark from this procurement. To assess value, one would need to compare the unit price (if derivable) to industry benchmarks for similar chemical retardants or to prices paid under previously competed contracts for comparable products. The absence of competition inherently limits the ability to definitively state if the price is optimal.

What are the potential risks associated with a sole-source award for critical supplies like fire retardant?

Sole-source awards carry several risks. Firstly, the government may not achieve the best possible price due to the lack of competitive pressure, potentially leading to higher costs for taxpayers. Secondly, it can foster complacency in the supplier, potentially impacting quality or innovation over time. Thirdly, it creates a dependency on a single provider, which can be risky if that supplier faces production issues, financial instability, or decides to exit the market. For critical supplies like fire retardant, this dependency could have significant implications for national wildfire response capabilities.

What is the track record of Perimeter Solutions LP in supplying the federal government?

Perimeter Solutions LP is a significant player in the fire-fighting chemicals market. While this specific contract is a sole-source award, the company's history with government contracts would need to be reviewed to assess its reliability, past performance, and pricing history on other awards. Information on previous contracts, including their value, duration, and whether they were competed, would provide context. A review of past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS) would also be crucial for a comprehensive assessment of their track record.

How does this spending compare to historical federal expenditures on fire retardants?

To assess historical spending patterns, one would need to analyze federal procurement data over several fiscal years for fire retardants and related products. This contract's value of approximately $63.8 million represents a substantial single award. Understanding if this is an increase, decrease, or consistent level of spending compared to previous years and other contracts would provide valuable context. Analyzing trends in both competed and sole-source awards for such materials is essential to identify shifts in procurement strategies and potential changes in market dynamics or agency needs.

What are the performance expectations and oversight for this contract?

The contract is a 'FIRM FIXED PRICE' type, indicating that the price is set regardless of the actual costs incurred by the contractor. Performance expectations would be detailed in the contract's Statement of Work (SOW) or Performance Work Statement (PWS), outlining the specific type, quantity, quality, and delivery schedule of the fire retardant. Oversight would be managed by the contracting officer and potentially a contract specialist or administrator from the Bureau of Land Management, responsible for monitoring delivery, ensuring compliance with specifications, and addressing any issues that arise. Given the sole-source nature, the focus of oversight might lean more towards ensuring adherence to the agreed terms rather than evaluating competitive performance.

Industry Classification

NAICS: Manufacturing › Other Chemical Product and Preparation Manufacturing › All Other Miscellaneous Chemical Product and Preparation Manufacturing

Product/Service Code: CHEMICALS AND CHEMICAL PRODUCTS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 8000 MARYLAND AVE, SAINT LOUIS, MO, 63105

Business Categories: Category Business, Foreign-Owned and U.S.-Incorporated Business, Partnership or Limited Liability Partnership, Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $63,752,462

Exercised Options: $63,752,462

Current Obligation: $63,752,462

Actual Outlays: $63,752,462

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 1202SC24T2500

IDV Type: IDC

Timeline