USDA awarded $57.6M for remediation services to KDF Enterprises LLC, a sole-source contract

Contract Overview

Contract Amount: $57,662,504 ($57.7M)

Contractor: KDF Enterprises LLC

Awarding Agency: Department of Agriculture

Start Date: 2015-06-28

End Date: 2015-09-30

Contract Duration: 94 days

Daily Burn Rate: $613.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: Other

Official Description: IGF::OT::IGF HPAI

Place of Performance

Location: AMES, STORY County, IOWA, 50010

State: Iowa Government Spending

Plain-Language Summary

Department of Agriculture obligated $57.7 million to KDF ENTERPRISES LLC for work described as: IGF::OT::IGF HPAI Key points: 1. The contract's value of $57.6 million for remediation services raises questions about cost-effectiveness given the sole-source nature. 2. Limited competition for this significant award may have impacted price discovery and potentially led to higher costs for taxpayers. 3. The short duration of 94 days for a contract of this magnitude suggests a specific, potentially urgent need. 4. The use of a Time and Materials pricing structure can introduce cost uncertainty if not closely managed. 5. The contract was awarded under the "IA" (Interagency Agreement) type, indicating a transfer of funds or services between federal agencies. 6. The absence of small business set-aside flags suggests this contract was not specifically targeted to support small businesses.

Value Assessment

Rating: questionable

The contract's total award of $57.6 million for remediation services is substantial. Without a competitive bidding process, it is difficult to benchmark the value for money. The Time and Materials pricing structure, while flexible, can lead to cost overruns if not meticulously monitored. Comparing this to similar remediation contracts awarded competitively would be essential to assess if the government received a fair price. The lack of transparency in pricing due to the sole-source nature makes a definitive value assessment challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning KDF Enterprises LLC was the only vendor considered. This significantly limits competition and bypasses the standard procurement process designed to solicit multiple bids and ensure the best value. The lack of competition means there was no opportunity for other qualified firms to offer their services, potentially at a lower cost or with better terms.

Taxpayer Impact: Sole-source awards mean taxpayers do not benefit from the cost savings that typically arise from a competitive bidding environment. This can result in higher overall spending for government services.

Public Impact

The primary beneficiary of this contract is the Department of Agriculture, specifically the Animal and Plant Health Inspection Service (APHIS). The services delivered are categorized under 'Remediation Services', though the specific nature of the remediation is not detailed. The contract was awarded to a vendor located in Iowa (SN: IOWA), suggesting a potential geographic focus for the remediation work. The contract's duration of 94 days indicates a short-term project, likely addressing an immediate need rather than a long-term operational requirement.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure, potentially increasing costs.
Time and Materials pricing can lead to cost uncertainty and overruns.
Lack of transparency in the procurement process hinders value assessment.
Short contract duration for a large sum may indicate rushed execution or scope issues.

Positive Signals

Contract awarded to a specific entity (KDF Enterprises LLC) for defined remediation services.
Awarded by a major federal agency (USDA) indicating a recognized need.
Contract has a defined start and end date, providing a clear timeframe for service delivery.

Sector Analysis

Remediation services fall under a broad category within the professional, scientific, and technical services sector. This sector is characterized by specialized expertise and often involves responding to environmental, structural, or other forms of damage or contamination. Government contracts for remediation can range from disaster recovery to hazardous material cleanup. The market size for such services can fluctuate significantly based on environmental regulations, infrastructure needs, and emergency events. This specific contract, valued at over $57 million, represents a significant investment within this niche.

Small Business Impact

The contract details indicate that this was not a small business set-aside (SB: false) and there is no indication of subcontracting goals for small businesses (SS: false). This suggests that the primary contractor, KDF Enterprises LLC, is likely not a small business, and the contract did not include provisions to ensure a portion of the work would be performed by small businesses. Consequently, this award does not appear to directly benefit the small business ecosystem through set-asides or mandated subcontracting.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Agriculture's internal audit and program management functions. As an Interagency Agreement (IA), there might also be oversight from the originating agency if funds were transferred. The Inspector General's office for the Department of Agriculture would have jurisdiction to investigate potential fraud, waste, or abuse. However, the sole-source nature and lack of detailed public information limit the transparency of specific oversight mechanisms employed for this particular award.

Related Government Programs

Environmental Remediation Services
Emergency Response Contracts
Federal Agency Service Contracts
Interagency Agreements (IA)

Risk Flags

Sole-source award raises concerns about competition and potential overpricing.
Time and Materials pricing structure increases risk of cost overruns without strict oversight.
Lack of detailed scope of work makes value assessment difficult.
Short contract duration for a large sum may indicate potential issues with planning or execution.

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $57.7 million to KDF ENTERPRISES LLC. IGF::OT::IGF HPAI

Who is the contractor on this award?

The obligated recipient is KDF ENTERPRISES LLC.

Which agency awarded this contract?

Awarding agency: Department of Agriculture (Animal and Plant Health Inspection Service).

What is the total obligated amount?

The obligated amount is $57.7 million.

What is the period of performance?

Start: 2015-06-28. End: 2015-09-30.

What specific remediation services were provided under this contract?

The provided data indicates the contract was for 'Remediation Services' (ND: Remediation Services) under NAICS code 562910. However, the specific nature of these services is not detailed in the summary data. Remediation can encompass a wide range of activities, including environmental cleanup (e.g., hazardous waste removal, soil or water decontamination), structural repair after damage, or biological hazard containment. Without further documentation, it is impossible to ascertain the exact scope of work performed by KDF Enterprises LLC. This lack of specificity makes it challenging to evaluate the necessity and effectiveness of the services rendered for the $57.6 million awarded.

How does the $57.6 million award compare to typical remediation contracts of similar scope?

Direct comparison is difficult due to the sole-source nature of this award and the lack of detailed scope information. Typically, contracts of this magnitude would undergo a rigorous competitive bidding process to ensure fair market value. Remediation projects can vary widely in cost depending on factors like the type of contamination, the size of the affected area, the required cleanup standards, and the urgency. A $57.6 million contract suggests a large-scale or highly complex remediation effort. However, without competitive bids, it's impossible to determine if this price is aligned with market rates for comparable services. Further analysis would require access to similar competitively awarded contracts for environmental or other types of remediation.

What are the risks associated with a sole-source, Time and Materials contract of this size?

Sole-source contracts carry inherent risks, primarily the lack of competitive pressure, which can lead to inflated pricing and reduced incentive for efficiency. When combined with a Time and Materials (T&M) pricing structure, the risks are amplified. T&M contracts pay the contractor for the actual time and materials used, which can be difficult to estimate upfront and can lead to cost overruns if not closely monitored and controlled. For a $57.6 million contract, the potential for uncontrolled spending is significant. Effective oversight, detailed work breakdown structures, and strict adherence to labor rates and material markups are crucial to mitigate these risks, but are often more challenging to implement in a sole-source T&M scenario.

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

The provided data indicates the contract type was 'NOT COMPETED' (CT: NOT COMPETED), which is synonymous with a sole-source award. Federal procurement regulations allow for sole-source awards under specific circumstances, such as when only one responsible source can satisfy the agency's needs (e.g., unique capabilities, urgent and compelling circumstances, or follow-on work to a previous sole-source award). However, the specific justification for why KDF Enterprises LLC was the only viable option for these remediation services is not included in the summary data. Agencies are required to document and justify sole-source procurements, and this documentation would typically be publicly accessible through sources like SAM.gov, though it is not provided here.

What is the historical spending pattern for remediation services by the Animal and Plant Health Inspection Service (APHIS)?

The provided data only details a single contract award of $57.6 million to KDF Enterprises LLC. It does not offer historical spending patterns for APHIS or for remediation services in general. To understand historical spending, one would need to analyze APHIS's procurement data over multiple fiscal years, identifying all contracts related to remediation services (using relevant NAICS codes like 562910) and their respective values, award types (competed vs. sole-source), and durations. This would reveal trends in spending, the typical methods of procurement, and the range of costs for such services within the agency.

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 › ENVIRONMENTAL SYSTEMS PROTECTION

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Address: 310 TIDWELL DR, ALPHARETTA, GA, 30004

Business Categories: Category Business, Partnership or Limited Liability Partnership, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $57,662,504

Exercised Options: $57,662,504

Current Obligation: $57,662,504

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Timeline