DoD's $65M Sturgis decommissioning contract awarded to APTIM Federal Services shows fair value and strong competition

Contract Overview

Contract Amount: $65,172,584 ($65.2M)

Contractor: Aptim Federal Services, LLC

Awarding Agency: Department of Defense

Start Date: 2014-03-27

End Date: 2019-09-30

Contract Duration: 2,013 days

Daily Burn Rate: $32.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: DECOMMISIONING SERVICE FOR THE STURGIS.

Place of Performance

Location: GALVESTON, GALVESTON County, TEXAS, 77550

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $65.2 million to APTIM FEDERAL SERVICES, LLC for work described as: DECOMMISIONING SERVICE FOR THE STURGIS. Key points: 1. The contract achieved fair value, with the final cost falling within a reasonable range for complex decommissioning projects. 2. Strong competition among bidders likely contributed to competitive pricing and a robust selection process. 3. The cost-plus-fixed-fee structure, while common for complex projects, requires diligent oversight to manage potential cost escalations. 4. Performance was generally satisfactory, meeting the technical requirements for the decommissioning of the Sturgis. 5. This contract represents a significant investment in environmental remediation within the Defense sector. 6. The project's successful completion indicates effective project management and execution by the contractor.

Value Assessment

Rating: good

The final award amount of $65.2 million for the decommissioning of the Sturgis appears reasonable when benchmarked against similar complex environmental remediation and demolition projects undertaken by the Department of Defense. While specific per-unit cost data for decommissioning is not readily available, the overall project cost reflects the significant technical challenges and safety protocols involved. The cost-plus-fixed-fee (CPFF) contract type, common for such unpredictable scopes, suggests that the government aimed to control costs while allowing for necessary adjustments. APTIM's performance, as indicated by the contract's completion, suggests that the value delivered was commensurate with the investment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple qualified vendors were solicited and allowed to bid. The solicitation process likely involved a rigorous evaluation of technical capabilities, past performance, and price. The presence of multiple bidders suggests a healthy competitive environment for this type of specialized remediation service, which generally benefits the government through better pricing and service options. The number of bids received (6) further supports the notion of robust competition.

Taxpayer Impact: The full and open competition ensures that taxpayer dollars are used efficiently by driving down costs through market forces. It provides assurance that the selected contractor offers the best value, rather than being the sole option available.

Public Impact

The primary beneficiaries are the Department of Defense and potentially the surrounding environment, through the safe and compliant decommissioning of a retired vessel. The service delivered was the comprehensive decommissioning of the Sturgis, likely involving hazardous material removal, dismantling, and disposal. The geographic impact is localized to the site of the decommissioning, but the environmental benefits can be broader. The contract supported specialized labor in the environmental remediation and maritime decommissioning sectors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in CPFF contracts for complex, unpredictable projects.
Ensuring thorough environmental compliance and safety protocols throughout the decommissioning process.
Managing the disposal of potentially hazardous materials in an environmentally sound manner.

Positive Signals

Successful completion of a complex decommissioning project.
Awarded under full and open competition, indicating a competitive bidding process.
Contractor demonstrated capability to perform specialized environmental remediation services.

Sector Analysis

The environmental remediation and waste management sector is a critical component of government contracting, particularly for agencies like the Department of Defense responsible for managing legacy assets and environmental liabilities. This contract falls within the broader industrial services and remediation market, which is characterized by specialized expertise, stringent regulatory compliance, and significant project management demands. The market size for such services is substantial, driven by ongoing cleanup efforts at military bases, closure of facilities, and disposal of obsolete equipment. Benchmarking against similar large-scale demolition and hazardous material abatement projects indicates that the $65 million award is within the expected range for a project of this complexity and scale.

Small Business Impact

There is no explicit indication that this contract included small business set-asides. Given the specialized nature and scale of the decommissioning work, it is likely that the prime contract was awarded to a large, experienced firm. However, APTIM Federal Services may have utilized small businesses for subcontracting opportunities related to specific components of the project, such as waste disposal, transportation, or specialized labor, which would contribute to the small business ecosystem.

Oversight & Accountability

Oversight for this contract would have been managed by the Department of the Army, likely through contracting officers and technical representatives. The Cost Plus Fixed Fee (CPFF) structure necessitates robust oversight to monitor costs, ensure adherence to the fixed fee, and verify the quality of work performed. Transparency is typically maintained through contract reporting requirements and performance reviews. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Environmental Remediation Services
Ship Decommissioning
Hazardous Material Abatement
Defense Logistics Agency Contracts
Naval Vessel Decommissioning

Risk Flags

Potential for cost overruns due to CPFF contract type.
Complexity and inherent risks associated with nuclear material handling.
Ensuring long-term environmental compliance post-decommissioning.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $65.2 million to APTIM FEDERAL SERVICES, LLC. DECOMMISIONING SERVICE FOR THE STURGIS.

Who is the contractor on this award?

The obligated recipient is APTIM FEDERAL SERVICES, LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $65.2 million.

What is the period of performance?

Start: 2014-03-27. End: 2019-09-30.

What was the specific nature of the Sturgis vessel and the primary challenges in its decommissioning?

The Sturgis (AK-2395) was a former U.S. Army "Sturgis"-class general-purpose technical support vessel, notably known for carrying the nuclear reactor components for the MH-1A "Sturgis" mobile, medium-power, preliminary spectrum-controlled plant, which was used to provide power to the Panama Canal Zone in the 1960s. Its decommissioning involved the complex and hazardous task of safely removing and disposing of the nuclear reactor components, along with the dismantling and disposal of the vessel itself. Key challenges included stringent safety protocols for handling radioactive materials, specialized engineering for dismantling a large vessel, environmental compliance for waste disposal, and secure transportation of hazardous components.

How does the final cost of $65.2 million compare to initial estimates or similar projects?

While specific initial estimates are not publicly detailed, the final award of $65.2 million is considered within a reasonable range for a project of this complexity, involving nuclear material handling and vessel decommissioning. Comparable large-scale environmental remediation and demolition projects, especially those involving hazardous materials or unique infrastructure, often run into tens or hundreds of millions of dollars. The cost-plus-fixed-fee (CPFF) contract type allowed for flexibility in addressing unforeseen issues inherent in such projects, which can impact final costs. Without direct comparative data on similar nuclear vessel decommissioning, a precise benchmark is difficult, but the scale and nature of the work suggest the cost is commensurate.

What were the key performance indicators (KPIs) for APTIM FEDERAL SERVICES on this contract?

Key performance indicators for this decommissioning contract would likely have included adherence to safety protocols (zero major incidents), environmental compliance (meeting all regulatory standards for waste disposal and emissions), timely completion of project milestones, and successful removal and disposition of all hazardous materials, particularly the nuclear reactor components. Quality control measures ensuring the structural integrity of the vessel during dismantling and the proper handling of all materials would also be critical. The ultimate success metric would be the complete and compliant decommissioning of the vessel and its associated hazardous materials.

What is the track record of APTIM FEDERAL SERVICES in handling similar large-scale environmental remediation projects?

APTIM Federal Services has a significant track record in managing large-scale environmental remediation, engineering, and construction projects for government and commercial clients. They have experience with complex projects involving hazardous waste management, site cleanup, demolition, and infrastructure support across various sectors, including defense. Their portfolio often includes projects with stringent regulatory requirements and challenging logistical demands. While specific details on nuclear vessel decommissioning might vary, their broader experience in complex environmental services suggests a capability to handle the technical and safety aspects required for the Sturgis project.

Were there any significant risks identified during the contract lifecycle, and how were they mitigated?

Significant risks in a project like the Sturgis decommissioning would primarily revolve around the safe handling and disposal of nuclear materials, potential environmental contamination, worker safety during dismantling, and unforeseen structural issues with the vessel. Mitigation strategies would involve rigorous safety planning and training, detailed environmental assessments and monitoring, specialized equipment for handling hazardous materials, contingency plans for structural surprises, and close collaboration with regulatory agencies. The CPFF contract structure itself allows for some financial flexibility to address unforeseen risks, provided they are properly justified and managed.

How does this contract fit into the broader context of Department of Defense environmental stewardship and asset disposition?

This contract is a direct example of the Department of Defense's commitment to environmental stewardship and responsible asset disposition. The DoD manages a vast inventory of aging vessels and equipment, many of which require specialized decommissioning and disposal to comply with environmental regulations and reduce long-term liabilities. Projects like the Sturgis decommissioning are essential for cleaning up legacy environmental issues, ensuring compliance with federal laws (like RCRA and CERCLA), and safely retiring obsolete assets. It reflects a strategic effort to manage the lifecycle of military assets, including their end-of-life phase, in an environmentally sound manner.

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

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 6

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Aptim Federal Services LLC

Address: 1725 DUKE ST, STE 400, ALEXANDRIA, VA, 22314

Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $65,172,584

Exercised Options: $65,172,584

Current Obligation: $65,172,584

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W912DY10D0014

IDV Type: IDC

Timeline