DoD's $121M Engineering Services Contract Awarded to CH2M HILL, Inc. for Alaska Projects
Contract Overview
Contract Amount: $12,100,400 ($12.1M)
Contractor: CH2M Hill, Inc
Awarding Agency: Department of Defense
Start Date: 2006-11-03
End Date: 2011-10-31
Contract Duration: 1,823 days
Daily Burn Rate: $6.6K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 7
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: TYPE B SERVICES FOR INDIVIDUAL PROJECTS
Place of Performance
Location: ELMENDORF AFB, ANCHORAGE County, ALASKA, 99506
State: Alaska Government Spending
Plain-Language Summary
Department of Defense obligated $12.1 million to CH2M HILL, INC for work described as: TYPE B SERVICES FOR INDIVIDUAL PROJECTS Key points: 1. Contract value of $121 million for engineering services indicates significant investment in infrastructure or operational support. 2. Awarded under full and open competition, suggesting a robust market for these services. 3. The duration of 1823 days (approx. 5 years) points to a long-term need for sustained engineering expertise. 4. Firm Fixed Price contract type aims to control costs and provide budget certainty for the Department of Defense. 5. The contract's focus on Alaska (AK) highlights specific regional infrastructure or defense requirements. 6. With 7 bids received, the competition level appears healthy, potentially leading to competitive pricing. 7. The absence of small business set-aside suggests the scope or nature of services may not have been tailored for smaller firms.
Value Assessment
Rating: good
The contract value of $121 million for engineering services over approximately five years is substantial. Benchmarking against similar large-scale engineering contracts for government projects is necessary for a precise value-for-money assessment. However, the firm fixed-price structure suggests an effort to manage costs effectively. The number of bids received (7) indicates a competitive environment, which typically drives better pricing for the government compared to sole-source or limited competition awards.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit bids. The receipt of 7 bids suggests a healthy level of interest and participation from the market. This broad competition is generally favorable for price discovery, as multiple firms vied for the contract, likely leading to more competitive proposals.
Taxpayer Impact: A competitive bidding process like this one helps ensure that taxpayer dollars are used efficiently by driving down costs through market forces. It reduces the risk of overpayment and promotes a fair allocation of government funds.
Public Impact
The Department of Defense benefits from specialized engineering expertise to support its operations and infrastructure in Alaska. Services delivered likely include design, planning, and potentially oversight for various projects within the state. The geographic impact is concentrated in Alaska, addressing specific regional defense or logistical needs. The contract supports engineering professionals and potentially related technical roles within the awarded contractor's organization.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns if scope creep occurs despite fixed-price contract.
- Dependence on a single contractor for a significant duration could limit flexibility.
- Geographic remoteness of Alaska may introduce logistical challenges and increase costs.
- Ensuring adequate quality control for complex engineering projects over a long period.
Positive Signals
- Firm fixed-price contract provides cost certainty for the government.
- Full and open competition suggests a competitive market and potentially good pricing.
- Long contract duration allows for sustained support and project continuity.
- Award to a known entity (CH2M HILL) may imply a track record of performance.
Sector Analysis
Engineering services, particularly those supporting defense infrastructure, represent a critical sector within the broader professional services market. This contract falls under the 'Engineering Services' NAICS code (541330). The market for such services is competitive, with numerous firms capable of undertaking large-scale government projects. Spending in this category is often driven by military readiness, base modernization, and operational support requirements, with significant government outlays annually across various agencies.
Small Business Impact
This contract was not awarded as a small business set-aside, and the data indicates no explicit small business subcontracting goals were met or required. The large scale and specialized nature of the engineering services likely favored larger, established firms. This means the direct economic benefit to the small business ecosystem through this specific award is likely minimal, though the prime contractor may engage small businesses for specific support roles.
Oversight & Accountability
Oversight for this contract would typically be managed by the contracting officer and the relevant program management office within the Department of the Army. Performance monitoring, quality assurance, and compliance checks are standard oversight mechanisms. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply if any allegations of fraud, waste, or abuse arise.
Related Government Programs
- Department of Defense Infrastructure Projects
- Engineering and Architectural Services
- Military Construction Projects
- Base Operations Support Contracts
- Federal Professional Services Contracts
Risk Flags
- Long contract duration increases exposure to market volatility and potential cost escalations.
- Remote geographic location (Alaska) may present logistical and operational challenges.
- Firm Fixed Price contracts can incentivize contractors to cut corners if not properly monitored.
- Potential for scope creep if requirements are not clearly defined and managed.
Tags
defense, department-of-defense, department-of-the-army, engineering-services, alaska, full-and-open-competition, firm-fixed-price, large-contract, professional-services, infrastructure, long-term-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $12.1 million to CH2M HILL, INC. TYPE B SERVICES FOR INDIVIDUAL PROJECTS
Who is the contractor on this award?
The obligated recipient is CH2M HILL, INC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Army).
What is the total obligated amount?
The obligated amount is $12.1 million.
What is the period of performance?
Start: 2006-11-03. End: 2011-10-31.
What is the historical spending pattern for CH2M HILL, Inc. with the Department of Defense?
Analyzing CH2M HILL, Inc.'s historical spending with the Department of Defense (DoD) requires accessing comprehensive federal procurement data. While this specific contract represents a $121 million award, a broader review would examine all contracts awarded to CH2M HILL by the DoD across different years and agencies. This would reveal trends in contract types (e.g., services, construction), award values, and the specific services provided. Understanding this history can indicate the contractor's established relationship with the DoD, their typical performance on similar contracts, and whether their involvement has been consistent or sporadic. It also helps in assessing if this particular award is an outlier or part of a larger pattern of engagement.
How does the $121 million contract value compare to other engineering services contracts awarded by the Army in Alaska?
To compare this $121 million contract value, one would need to analyze the distribution of engineering services contract values awarded by the Department of the Army specifically within Alaska over a relevant period (e.g., the last 5-10 years). This analysis would involve identifying similar NAICS codes (like 541330) and filtering awards by agency and geographic location. If this contract represents one of the largest or is within the typical range of major engineering projects in the region, it suggests it is in line with the scale of needs. Conversely, if it's significantly higher or lower than comparable contracts, it might warrant further investigation into the scope of work, duration, or market conditions influencing the price.
What are the primary risks associated with a 5-year firm fixed-price contract for engineering services in a remote location like Alaska?
A primary risk with a 5-year firm fixed-price contract for engineering services in Alaska is the potential for unforeseen cost increases due to the remote location and extended duration. Factors such as inflation, supply chain disruptions, labor availability, and harsh environmental conditions can significantly impact project costs. While the fixed-price nature aims to cap the government's liability, the contractor bears the risk of cost overruns. This could lead to the contractor seeking change orders, potentially increasing the overall cost, or facing financial distress if they cannot manage the escalating expenses. Ensuring robust contract clauses for unforeseen conditions and diligent oversight are crucial to mitigate these risks.
What performance metrics are typically used to evaluate engineering services contracts of this magnitude?
Performance metrics for large engineering services contracts typically focus on adherence to schedule, budget, quality standards, and technical specifications. Key Performance Indicators (KPIs) might include on-time completion of milestones, adherence to the firm fixed-price budget (tracking expenditures against planned costs), defect rates or rework required (quality), and compliance with design and engineering standards. Client satisfaction surveys, technical reviews by government engineers, and adherence to safety protocols are also common evaluation points. For a contract of this duration and value, regular progress reviews and performance assessments are essential to ensure the contractor is meeting all contractual obligations effectively.
How has the competition landscape for engineering services changed since this contract was awarded in 2006?
The competition landscape for engineering services has likely evolved significantly since this contract was awarded in 2006. Factors such as market consolidation, the emergence of new technologies (e.g., BIM, advanced modeling software), increased focus on sustainability, and shifts in government procurement strategies (e.g., emphasis on past performance, different contract vehicles) could have altered the dynamics. The rise of specialized niche firms and the increasing importance of cybersecurity for digital engineering plans are also relevant. Understanding these changes helps contextualize the competitive environment at the time of award and assess its continued relevance.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: ARCHITECT/ENGINEER SERVICES › ARCH-ENG SVCS - GENERAL
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 7
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: CH2M Hill Companies, Ltd. (UEI: 027620574)
Address: 13921 PARK CENTER ROAD, SU, HERNDON, VA, 20171
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $12,100,400
Exercised Options: $12,100,400
Current Obligation: $12,100,400
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W9133L05D0001
IDV Type: IDC
Timeline
Start Date: 2006-11-03
Current End Date: 2011-10-31
Potential End Date: 2011-10-31 00:00:00
Last Modified: 2017-12-01
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