EPA awards $32.2M contract for Velsicol Burn Pit site cleanup in Michigan

Contract Overview

Contract Amount: $32,222,665 ($32.2M)

Contractor: CH2M Hill, Inc

Awarding Agency: Environmental Protection Agency

Start Date: 2023-04-21

End Date: 2026-04-30

Contract Duration: 1,105 days

Daily Burn Rate: $29.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: Other

Official Description: STAND-ALONE SITE SPECIFIC CONTRACT FOR REMEDIAL ACTION (RA) AT THE VELSICOL BURN PIT SITE LOCATED IN MICHIGAN

Place of Performance

Location: SAINT LOUIS, GRATIOT County, MICHIGAN, 48880

State: Michigan Government Spending

Plain-Language Summary

Environmental Protection Agency obligated $32.2 million to CH2M HILL, INC for work described as: STAND-ALONE SITE SPECIFIC CONTRACT FOR REMEDIAL ACTION (RA) AT THE VELSICOL BURN PIT SITE LOCATED IN MICHIGAN Key points: 1. Contract focuses on remedial action at a specific Superfund site, indicating targeted environmental cleanup efforts. 2. The award was not competed, raising questions about potential cost savings and market-driven pricing. 3. The contract duration of over three years suggests a complex and long-term remediation process. 4. The use of Time and Materials pricing could lead to cost overruns if not closely managed. 5. The contractor, CH2M HILL, INC, has a significant presence in environmental services, suggesting relevant expertise. 6. The contract is a standalone award for a specific site, not part of a broader service agreement.

Value Assessment

Rating: fair

The contract value of $32.2 million for a Superfund site cleanup is substantial. Benchmarking this specific remedial action against similar, complex Superfund site cleanups is challenging without more granular data on the scope of work and site conditions. However, the lack of competition and the Time and Materials pricing structure present risks to achieving optimal value for money. Close oversight will be critical to ensure costs remain aligned with the actual work performed and that the contractor is not incentivized to prolong the project.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not open to competitive bidding. This approach is typically used when a specific contractor is deemed uniquely qualified or when urgency dictates a rapid award. Without competition, it is difficult to assess if the government secured the best possible price or if alternative solutions were explored. The lack of bidders means the government did not benefit from the price discovery mechanisms inherent in a competitive procurement process.

Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers as there is no competitive pressure to drive down prices. This necessitates robust government oversight to ensure fair pricing and efficient execution.

Public Impact

The primary beneficiaries are the residents and environment of Michigan, particularly in the vicinity of the Velsicol Burn Pit site, through the remediation of hazardous substances. The services delivered involve complex environmental cleanup activities, including site assessment, containment, and removal of contaminants. The geographic impact is localized to the Velsicol Burn Pit Superfund site in Michigan. The contract supports specialized jobs in environmental engineering, remediation, and hazardous waste management.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition for a significant environmental remediation contract raises concerns about potential overpricing and missed opportunities for cost savings.
The Time and Materials (T&M) contract type can incentivize longer project durations and higher costs if not meticulously managed and monitored.
The specific nature of Superfund site cleanups can involve unforeseen complexities, potentially leading to cost increases beyond initial estimates.
The sole-source award limits transparency into the government's procurement strategy and the rationale for not seeking competitive proposals.

Positive Signals

The contract addresses a critical environmental hazard at a designated Superfund site, indicating progress in addressing long-standing environmental issues.
The selection of CH2M HILL, INC, a company with extensive experience in environmental services, suggests a focus on technical capability for a complex task.
The contract duration allows for a comprehensive and phased approach to remediation, which may be necessary for effective long-term cleanup.
The award signifies federal commitment to addressing environmental contamination and protecting public health in Michigan.

Sector Analysis

This contract falls within the Environmental Remediation Services sector, a specialized area of the broader Engineering and Construction industry. The market for Superfund site cleanups is driven by regulatory mandates and involves a limited number of highly specialized firms capable of handling complex hazardous waste remediation. Spending in this sector is often project-specific and tied to the identification and prioritization of contaminated sites by agencies like the EPA. Comparable spending benchmarks are difficult to establish due to the unique nature of each Superfund site and the varying scope of remedial actions required.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the contractor, CH2M HILL, INC, is a large business. There is no explicit mention of subcontracting requirements for small businesses within the provided data. This suggests that the primary focus is on the prime contractor's capabilities, and the impact on the small business ecosystem for this specific award is likely minimal unless the prime contractor voluntarily engages small businesses for specialized services.

Oversight & Accountability

Oversight for this contract will primarily reside with the Environmental Protection Agency (EPA), the awarding agency. As a sole-source award for a significant environmental cleanup, robust oversight is crucial. This would typically involve detailed monitoring of work progress, cost tracking, and adherence to environmental regulations and remediation plans. The EPA's Inspector General may also conduct audits or investigations to ensure accountability and prevent fraud, waste, and abuse, particularly given the Time and Materials pricing structure.

Related Government Programs

Superfund Program
Hazardous Waste Remediation
Environmental Cleanup Contracts
EPA Site Remediation

Risk Flags

Sole-source award lacks competitive justification.
Time and Materials pricing increases risk of cost overruns.
Potential for extended project duration due to T&M structure.
Lack of transparency regarding specific remediation technologies and methods.

Frequently Asked Questions

What is this federal contract paying for?

Environmental Protection Agency awarded $32.2 million to CH2M HILL, INC. STAND-ALONE SITE SPECIFIC CONTRACT FOR REMEDIAL ACTION (RA) AT THE VELSICOL BURN PIT SITE LOCATED IN MICHIGAN

Who is the contractor on this award?

The obligated recipient is CH2M HILL, INC.

Which agency awarded this contract?

Awarding agency: Environmental Protection Agency (Environmental Protection Agency).

What is the total obligated amount?

The obligated amount is $32.2 million.

What is the period of performance?

Start: 2023-04-21. End: 2026-04-30.

What is the specific scope of work for the remedial action at the Velsicol Burn Pit site?

The provided data indicates the contract is for 'STAND-ALONE SITE SPECIFIC CONTRACT FOR REMEDIAL ACTION (RA) AT THE VELSICOL BURN PIT SITE LOCATED IN MICHIGAN'. While the exact scope is not detailed, Remedial Action (RA) under the Superfund program typically involves the cleanup and response activities necessary to address the release or threat of release of hazardous substances. This can include excavation, treatment, containment, monitoring, and long-term management of contaminants to protect human health and the environment. The specific contaminants and methods at the Velsicol site would dictate the precise tasks undertaken.

Why was this contract awarded on a sole-source basis instead of being competed?

The data explicitly states the contract was 'NOT COMPETED' and is a 'sole-source' award. Agencies typically award sole-source contracts when only one responsible source is available or capable of meeting the requirement. Reasons can include unique capabilities, proprietary technology, urgent and compelling needs where competition is not feasible, or when a previous contract was terminated and only one contractor can continue the work without unacceptable delay or duplication of cost. Without further justification from the EPA, the specific rationale for this sole-source award remains unclear, but it implies a determination that competitive bidding was not practical or advantageous in this instance.

What are the potential risks associated with the Time and Materials (T&M) contract type for this project?

The Time and Materials (T&M) contract type, used here, carries inherent risks for cost control. Unlike fixed-price contracts, T&M agreements reimburse the contractor for the actual cost of labor (at specified hourly rates) and materials, plus a fee or profit. This structure can incentivize longer project durations and potentially less efficient work, as the contractor is compensated for time and resources spent. For complex environmental remediation, unforeseen issues can arise, leading to cost escalations. Effective management requires rigorous monitoring of labor hours, material usage, and task completion to ensure costs remain reasonable and aligned with the project's progress and objectives.

How does the contractor's past performance and experience influence this award?

While the provided data lists the contractor as 'CH2M HILL, INC', it does not include specific details on their past performance or track record relevant to this particular Superfund site or similar complex cleanups. However, CH2M HILL (now Jacobs) is a well-established global engineering firm with significant experience in environmental consulting and remediation services. Agencies often rely on past performance evaluations when making sole-source awards or when selecting contractors for complex projects. It is highly probable that the EPA's decision to award this contract sole-source was influenced by CH2M HILL's perceived expertise and successful execution of similar environmental projects, suggesting a level of confidence in their ability to handle the Velsicol site remediation.

What is the historical spending pattern for environmental remediation at the Velsicol Burn Pit site or similar EPA-managed sites?

The provided data focuses on a single, new contract award of $32.2 million for remedial action at the Velsicol Burn Pit site. It does not offer historical spending data for this specific site or provide a broader context of EPA's spending on similar Superfund site cleanups. Superfund site remediation costs can vary dramatically based on the complexity of contamination, the size of the site, the chosen cleanup technologies, and the duration of the project. Without access to historical EPA financial records or specific site histories, it is impossible to establish a spending pattern. However, Superfund cleanups are often multi-year, multi-million dollar endeavors, and this contract appears to be a significant investment in addressing the Velsicol site's contamination.

What are the key performance indicators (KPIs) likely to be used to measure the success of this contract?

For a Remedial Action (RA) contract at a Superfund site, Key Performance Indicators (KPIs) would likely focus on environmental outcomes, project management, and cost control. Environmental KPIs could include the reduction of contaminant levels in soil, groundwater, or air to meet regulatory standards, successful containment of hazardous materials, and adherence to environmental protection measures during cleanup. Project management KPIs might involve meeting key milestones, timely completion of phases, and effective coordination of site activities. Cost control KPIs would be critical given the T&M structure, focusing on managing labor hours, material costs, and preventing cost overruns relative to the work performed and the overall contract value. Compliance with health and safety protocols is also paramount.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Remediation and Other Waste Management Services › Remediation Services

Product/Service Code: NATURAL RESOURCES MANAGEMENT › NATURAL RESOURCES - OTHER SVCS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: 68HE0522R0035

Offers Received: 1

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Address: 6312 S FIDDLERS GREEN CIR STE 300N, GREENWOOD VILLAGE, CO, 80111

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $32,222,665

Exercised Options: $32,222,665

Current Obligation: $32,222,665

Actual Outlays: $30,834,071

Subaward Activity

Number of Subawards: 20

Total Subaward Amount: $24,882,126

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline