DOE awards $58.9M contract for Alaska Gas Hydrate Project support, raising value-for-money questions
Contract Overview
Contract Amount: $58,870,472 ($58.9M)
Contractor: Asrc Consulting & Environmental Services, LLC
Awarding Agency: Department of Energy
Start Date: 2021-08-04
End Date: 2026-08-03
Contract Duration: 1,825 days
Daily Burn Rate: $32.3K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Energy
Official Description: ALASKA GAS HYDRATE PROJECT
Place of Performance
Location: PRUDHOE BAY, NORTH SLOPE County, ALASKA, 99734
State: Alaska Government Spending
Plain-Language Summary
Department of Energy obligated $58.9 million to ASRC CONSULTING & ENVIRONMENTAL SERVICES, LLC for work described as: ALASKA GAS HYDRATE PROJECT Key points: 1. Contract awarded on a sole-source basis, limiting price competition and potentially increasing costs. 2. The contract's duration of five years suggests a long-term need for these specialized services. 3. The fixed-fee structure on a cost-plus award may incentivize cost control by the contractor. 4. The project's focus on oil and gas operations aligns with energy sector priorities. 5. Lack of competition raises concerns about whether the government secured the best possible value. 6. The contractor's track record and past performance will be crucial in assessing overall value.
Value Assessment
Rating: questionable
Benchmarking the value of this contract is challenging due to its sole-source nature and specialized focus. The $58.9 million award over five years for support activities in oil and gas operations lacks direct comparable contracts for price assessment. The cost-plus-fixed-fee structure requires careful monitoring to ensure the contractor manages costs effectively and that the fixed fee remains reasonable for the scope of work. Without competitive bids, it's difficult to definitively state if this represents excellent value for taxpayer dollars.
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 possesses the necessary unique capabilities or when circumstances prevent a competitive process. The absence of competition means there was no opportunity for price discovery through bidding, which can lead to higher costs for the government.
Taxpayer Impact: Sole-source awards limit the government's ability to leverage competition to drive down prices, potentially resulting in higher expenditures for taxpayers compared to a competitively bid contract.
Public Impact
The primary beneficiaries are the Department of Energy and potentially the energy sector through advancements in gas hydrate research and operations. Services delivered include crucial support activities for oil and gas operations, likely involving technical expertise, environmental assessments, and project management. The geographic impact is focused on Alaska, given the nature of gas hydrate resources. Workforce implications may include the employment of specialized scientists, engineers, and support staff by the contractor.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competitive pressure on pricing.
- Cost-plus contract type requires diligent oversight to manage costs.
- Specialized nature of work may limit the pool of qualified contractors.
- Long contract duration could lead to scope creep or cost overruns if not managed.
Positive Signals
- Contract supports critical energy research and development for the U.S.
- ASRC Consulting & Environmental Services, LLC is likely chosen for specific expertise.
- Fixed fee component provides some cost predictability.
- Project duration allows for sustained focus on complex objectives.
Sector Analysis
The contract falls within the broader energy sector, specifically focusing on oil and gas operations and the emerging field of gas hydrates. This sector is characterized by significant government investment in research and development, as well as regulatory oversight. Comparable spending in this niche area is difficult to pinpoint due to its specialized nature, but overall federal spending on energy R&D is substantial.
Small Business Impact
There is no indication that this contract includes a small business set-aside. Given the specialized nature of the work and the sole-source award, it is unlikely that subcontracting opportunities for small businesses will be a primary focus unless specifically mandated or identified by the prime contractor. The impact on the small business ecosystem is likely minimal for this specific award.
Oversight & Accountability
Oversight for this contract will primarily reside with the Department of Energy's contracting officers and program managers. Accountability measures will be tied to the performance against the contract's objectives and deliverables, particularly concerning the cost-plus-fixed-fee structure. Transparency may be limited due to the sole-source nature, but contract award details are publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.
Related Government Programs
- Department of Energy Research and Development Programs
- Oil and Gas Exploration Support Contracts
- Arctic Research Initiatives
- Natural Gas Infrastructure Development
Risk Flags
- Sole-source award limits competition.
- Cost-plus contract type requires strong oversight.
- Potential for cost overruns due to contract type and location.
- Environmental risks associated with Arctic operations.
Tags
energy, department-of-energy, alaska, definitive-contract, large-contract, sole-source, oil-and-gas, support-activities, research-and-development, cost-plus-fixed-fee
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $58.9 million to ASRC CONSULTING & ENVIRONMENTAL SERVICES, LLC. ALASKA GAS HYDRATE PROJECT
Who is the contractor on this award?
The obligated recipient is ASRC CONSULTING & ENVIRONMENTAL SERVICES, LLC.
Which agency awarded this contract?
Awarding agency: Department of Energy (Department of Energy).
What is the total obligated amount?
The obligated amount is $58.9 million.
What is the period of performance?
Start: 2021-08-04. End: 2026-08-03.
What is the track record of ASRC Consulting & Environmental Services, LLC with federal contracts, particularly with the Department of Energy?
ASRC Consulting & Environmental Services, LLC has a history of performing work for federal agencies, including the Department of Energy. Their experience likely encompasses environmental consulting, engineering support, and project management relevant to energy and resource development. A detailed review of their past performance on similar contracts, including client satisfaction, adherence to schedule and budget, and quality of deliverables, would be necessary to fully assess their capability for this specific Alaska Gas Hydrate Project. Information on past performance is often available through federal procurement databases and agency performance reports, which can provide insights into their reliability and expertise.
How does the cost-plus-fixed-fee (CPFF) structure compare to other contract types for similar support services, and what are its implications for value?
The Cost-Plus-Fixed-Fee (CPFF) contract type is often used for research and development or complex projects where the scope is not fully defined at the outset. It allows the contractor to recover all allowable costs plus a predetermined fixed fee representing profit. Compared to fixed-price contracts, CPFF offers more flexibility but can lead to higher costs if not managed diligently, as the government bears the risk of cost overruns. For specialized support services like those for the Alaska Gas Hydrate Project, CPFF can be appropriate if innovation or evolving requirements are expected. However, it necessitates robust government oversight to ensure costs are reasonable and the fixed fee is justified, impacting the overall value proposition.
What are the specific risks associated with supporting oil and gas operations in Alaska, and how does this contract address them?
Supporting oil and gas operations in Alaska involves significant risks, including harsh environmental conditions, logistical challenges, regulatory complexities, and potential environmental impacts. This contract, focused on the Alaska Gas Hydrate Project, likely entails technical assessments, environmental compliance, and operational support tailored to these unique challenges. The risks addressed would include ensuring safe and efficient operations, minimizing environmental footprint, and navigating the complex regulatory landscape. The contractor's expertise in Arctic environments and environmental services is critical to mitigating these risks. The contract's scope should clearly define the risk mitigation strategies and responsibilities of both the government and the contractor.
What is the historical spending trend for similar support activities related to oil and gas operations by the Department of Energy?
Historical spending trends for similar support activities related to oil and gas operations by the Department of Energy can vary significantly based on national energy policies, market conditions, and specific research initiatives. While direct comparisons to the Alaska Gas Hydrate Project are difficult due to its specialized nature, the DOE does invest in various programs aimed at energy resource development, environmental remediation, and technological innovation within the oil and gas sector. Analyzing past budgets and contract awards for programs focused on unconventional resources, Arctic research, or environmental impact assessments would provide context. However, the current $58.9 million award suggests a substantial commitment to this particular project, potentially indicating a renewed or increased focus on gas hydrate research and development.
How does the geographic focus on Alaska influence the contract's cost and complexity?
The geographic focus on Alaska significantly influences the contract's cost and complexity. Alaska presents unique logistical challenges, including remote locations, extreme weather conditions, and limited infrastructure, which drive up operational costs for transportation, personnel, and equipment. Environmental regulations are also stringent due to the sensitive Arctic ecosystem. These factors necessitate specialized expertise and robust planning, contributing to higher overall contract values. The $58.9 million award reflects these inherent complexities and the specialized support required for projects in such an environment, including potential costs associated with environmental monitoring, permitting, and specialized personnel deployment.
Industry Classification
NAICS: Mining, Quarrying, and Oil and Gas Extraction › Support Activities for Mining › Support Activities for Oil and Gas Operations
Product/Service Code: NATURAL RESOURCES MANAGEMENT › NATURAL RESOURCE CONSERVERVAT SVCS
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 3900 C ST STE 701, ANCHORAGE, AK, 99503
Business Categories: Alaskan Native Corporation Owned Firm, Category Business, Corporate Entity Not Tax Exempt, Minority Owned Business, Native American Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $58,870,472
Exercised Options: $58,870,472
Current Obligation: $58,870,472
Actual Outlays: $53,487,675
Subaward Activity
Number of Subawards: 29
Total Subaward Amount: $23,146,294
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2021-08-04
Current End Date: 2026-08-03
Potential End Date: 2026-08-03 00:00:00
Last Modified: 2026-01-12
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