DoD's $90.6M munitions cleanup contract awarded to KEMRON Environmental Services shows fair value despite limited competition

Contract Overview

Contract Amount: $90,597,340 ($90.6M)

Contractor: Kemron Environmental Services, Inc.

Awarding Agency: Department of Defense

Start Date: 2014-09-29

End Date: 2020-03-31

Contract Duration: 2,010 days

Daily Burn Rate: $45.1K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: MUNITIONS EXPLOSIVES OF CONCERN REMOVAL AND SOIL INVESTIGATION - CPFF PORTION

Place of Performance

Location: MONTEREY, MONTEREY County, CALIFORNIA, 93940

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $90.6 million to KEMRON ENVIRONMENTAL SERVICES, INC. for work described as: MUNITIONS EXPLOSIVES OF CONCERN REMOVAL AND SOIL INVESTIGATION - CPFF PORTION Key points: 1. Contract value represents a significant investment in environmental remediation for the Department of Defense. 2. The contract was competed after exclusion of sources, suggesting potential limitations in the initial bidding process. 3. Performance period spans over five years, indicating a long-term commitment to addressing environmental concerns. 4. The firm-fixed-price component suggests a degree of cost certainty for the government. 5. The contract is not set aside for small businesses, potentially limiting opportunities for smaller firms in this sector.

Value Assessment

Rating: fair

The contract's total value of approximately $90.6 million over its performance period suggests a substantial investment in munitions cleanup. Benchmarking this against similar large-scale environmental remediation contracts for the Department of Defense is challenging without more specific service details. However, the firm-fixed-price nature of a portion of the contract indicates some level of price predictability. The awarded amount appears within a reasonable range for complex, long-term environmental cleanup projects, though a detailed cost-benefit analysis would be needed for a definitive value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was awarded under 'Full and Open Competition After Exclusion of Sources.' This procurement method implies that while the competition was intended to be open, certain sources may have been excluded prior to the final award. The number of bidders is not explicitly stated, but the 'exclusion of sources' designation suggests that the pool of potential bidders might have been narrowed down from a broader initial solicitation. This could potentially impact the level of price discovery and the range of innovative solutions considered.

Taxpayer Impact: The limited competition may have resulted in less aggressive pricing than a truly full and open competition with a wider range of bidders. Taxpayers may have paid a premium if fewer competitive pressures were present.

Public Impact

The primary beneficiaries are the Department of the Army and potentially surrounding communities impacted by munitions contamination. The services delivered include the removal of munitions and explosives of concern, along with soil investigation and remediation. The geographic impact is focused on sites within California, addressing specific environmental hazards. The contract supports specialized environmental services, likely involving a skilled workforce in hazardous material handling and environmental science.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition could lead to higher costs for taxpayers.
The 'exclusion of sources' raises questions about the breadth of the initial bidding process.
Long-term environmental remediation projects can face unforeseen challenges and cost overruns.

Positive Signals

The contract addresses a critical environmental safety and compliance need for the Department of Defense.
The firm-fixed-price component provides some cost control for the government.
The multi-year duration indicates a sustained effort to resolve contamination issues.

Sector Analysis

This contract falls within the Environmental Remediation Services sector, a critical component of the broader environmental services industry. This sector is characterized by specialized expertise in hazardous waste management, site assessment, and cleanup operations. The market size for environmental remediation, particularly for government agencies dealing with legacy contamination from military activities, is substantial. This contract represents a significant portion of spending within this niche, addressing long-standing environmental liabilities.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). This means that large businesses were eligible to compete and likely dominated the bidding process. There is no explicit information on subcontracting plans for small businesses, but given the nature of the work and the prime contractor's size, there may be opportunities for specialized small businesses to participate as subcontractors. However, the lack of a set-aside suggests a missed opportunity to specifically foster small business participation in this significant federal contract.

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. Accountability measures are inherent in the contract terms, including performance standards and payment schedules tied to deliverables. Transparency is generally facilitated through contract award databases and public reporting, though specific details of ongoing oversight activities may not be publicly disclosed. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse related to the contract.

Related Government Programs

Environmental Remediation Services
Munitions Response Program
Hazardous Waste Management
Department of Defense Environmental Contracts
Site Investigation and Cleanup

Risk Flags

Limited competition may impact price.
Potential for unforeseen environmental conditions.
Safety risks inherent in munitions removal.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $90.6 million to KEMRON ENVIRONMENTAL SERVICES, INC.. MUNITIONS EXPLOSIVES OF CONCERN REMOVAL AND SOIL INVESTIGATION - CPFF PORTION

Who is the contractor on this award?

The obligated recipient is KEMRON ENVIRONMENTAL SERVICES, 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 $90.6 million.

What is the period of performance?

Start: 2014-09-29. End: 2020-03-31.

What is KEMRON Environmental Services, Inc.'s track record with similar large-scale environmental remediation contracts for the Department of Defense?

KEMRON Environmental Services, Inc. has a history of performing environmental remediation services for various government agencies, including the Department of Defense. Their experience often involves complex projects such as hazardous waste removal, site cleanup, and compliance with environmental regulations. Analyzing their past performance on similar contracts, including their ability to meet deadlines, stay within budget, and adhere to safety protocols, is crucial for assessing their capability on this specific $90.6 million munitions cleanup contract. A review of past performance evaluations and any documented issues or successes would provide further insight into their reliability and expertise in handling such critical environmental tasks.

How does the awarded price of $90.6 million compare to the estimated value or benchmark for similar munitions cleanup contracts?

Directly comparing the $90.6 million award to a precise benchmark is challenging without detailed knowledge of the specific scope of work, site conditions, and the duration of similar contracts. However, the value suggests a significant and complex undertaking. Munitions and explosives of concern (MEC) removal and soil investigation are inherently costly due to safety requirements, specialized equipment, and the need for expert personnel. If this contract spans several years and covers extensive areas with high contamination levels, the price could be considered reasonable. Conversely, if the scope was smaller or less complex than typical large-scale MEC remediation projects, the price might warrant closer scrutiny for potential overvaluation.

What are the primary risks associated with this contract, and how are they being managed?

The primary risks associated with this contract include unforeseen subsurface conditions (e.g., encountering more contamination than initially assessed), potential delays due to regulatory changes or permitting issues, safety incidents during hazardous material handling, and contractor performance issues. The 'Full and Open Competition After Exclusion of Sources' also introduces a risk that the government may not have received the most competitive pricing. Risk management would typically involve detailed site investigations, robust safety protocols, contingency planning, performance monitoring by the contracting officer, and clear contractual remedies for non-performance. The firm-fixed-price component for certain aspects helps mitigate cost overrun risks for those specific elements.

How effective has KEMRON been in delivering the specified munitions cleanup and soil investigation services under this contract?

Assessing the effectiveness of KEMRON's service delivery requires access to performance reports, milestone achievements, and potentially government quality assurance reviews. Given the contract's duration (September 2014 to March 2020), there should be historical data available on project progress. Key indicators of effectiveness would include the successful removal of identified munitions, accurate soil contamination assessments, compliance with environmental standards, and timely completion of project phases. Without specific performance metrics or government assessments, it is difficult to definitively gauge effectiveness, but the completion of the contract suggests that the services were ultimately delivered.

What are the historical spending patterns for munitions cleanup and environmental remediation within the Department of the Army, and how does this contract fit in?

The Department of the Army has consistently allocated significant funding towards environmental remediation, particularly for legacy contamination from decades of military operations, including munitions sites. Historical spending patterns show a sustained commitment to addressing these environmental liabilities across numerous installations. This $90.6 million contract for munitions cleanup and soil investigation in California fits within this broader pattern of federal investment in environmental restoration. It represents a specific, targeted effort to address contamination at a particular location, contributing to the overall goal of environmental compliance and safety mandated by federal law and DoD policy.

What is the significance of the 'After Exclusion of Sources' clause in the contract's competition history?

The 'Full and Open Competition After Exclusion of Sources' clause indicates a procurement process that began with an intent for broad competition but subsequently excluded certain potential offerors before the final award. This could occur for various reasons, such as specific technical requirements that only a limited number of firms could meet, or if the initial solicitation was modified, leading to the exclusion of some respondents. While it aims for fairness, it inherently narrows the competitive field compared to a truly unrestricted full and open competition. This exclusion might suggest that the government had specific criteria or prior knowledge that led them to believe only certain sources could adequately fulfill the contract's complex needs, potentially impacting the final price and solution diversity.

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: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 6

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1359A ELLSWORTH INDUSTRIAL BLVD, ATLANTA, GA, 30318

Business Categories: Category Business, Limited Liability Corporation, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $90,597,340

Exercised Options: $90,597,340

Current Obligation: $90,597,340

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W912DY10D0027

IDV Type: IDC

Timeline