Army's $2.14B waste management contract awarded to Raytheon Engineers & Constructors, spanning over 18 years

Contract Overview

Contract Amount: $2,143,099,331 ($2.1B)

Contractor: Washington Demilitarization Company LLC

Awarding Agency: Department of Defense

Start Date: 1997-09-29

End Date: 2018-05-16

Contract Duration: 7,534 days

Daily Burn Rate: $284.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST NO FEE

Sector: Construction

Official Description: 199712!2100!6004!AA09 !U.S. ARMY INDUSTRIAL OPERATIONS !DAAA0997C0025 !A!*!P00006 !19970929!19970929!879410652!802675199!001339159!N!085U6!RAYTHEON ENGINEERS & CONSTRUCT!30 S 17TH ST !PHILADELPHIA !PA!19103!33700!059!41!HERMISTON !UMATILLA !OREGON !0001!+000011041600!N!N!000000000000!S205!TRASH/GARBAGE COLLECTION SRVCS-INCL PORT SAN SVCS !C2 !CONSTRUCTION !1000!NOT DISCERNABLE OR CLASSIFIED !4953!3!*!*!C!B!A!*!D !N!S!1!001!N!1A!A!Y!Z!* !* !N!C!*!B!A!A!A!A!*!* !*!N!A!C!N!*!*!*!*!*!

Place of Performance

Location: HERMISTON, UMATILLA County, OREGON, 97838

State: Oregon Government Spending

Plain-Language Summary

Department of Defense obligated $2.14 billion to WASHINGTON DEMILITARIZATION COMPANY LLC for work described as: 199712!2100!6004!AA09 !U.S. ARMY INDUSTRIAL OPERATIONS !DAAA0997C0025 !A!*!P00006 !19970929!19970929!879410652!802675199!001339159!N!085U6!RAYTHEON ENGINEERS & CONSTRUCT!30 S 17TH ST !PHILADELPHIA !PA!19103!33700!059!41!HERMISTON !UMATIL… Key points: 1. Contract value significantly exceeds initial estimates, suggesting potential for cost overruns or scope creep. 2. Long contract duration of over 18 years raises concerns about adaptability to changing needs and technologies. 3. Sole-source award limits competitive pressure, potentially leading to suboptimal pricing and reduced innovation. 4. Significant geographic scope across multiple locations indicates complex logistical requirements and potential for varied performance. 5. The contract's primary focus on waste management and port services highlights a critical but potentially niche operational need. 6. Lack of small business participation raises questions about equitable distribution of federal contracting opportunities.

Value Assessment

Rating: questionable

The total obligated amount of $2.14 billion over an 18-year period is substantial. Benchmarking this against similar waste management and port services contracts is challenging due to the unique combination of services and the extended duration. The contract type (Cost No Fee) suggests that the government assumes most of the financial risk, which can lead to higher overall costs if not managed tightly. Without more granular data on the specific services provided and their unit costs, a definitive value-for-money assessment is difficult, but the sheer scale and duration warrant scrutiny.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning there was no open competition. The data indicates it was not competed. This approach is typically used when only one source is capable of meeting the requirement, or in specific circumstances like follow-on work to a previous sole-source award. The lack of competition means that taxpayers did not benefit from the price discovery and potential cost savings that a competitive bidding process could have provided.

Taxpayer Impact: Sole-source awards can lead to higher prices for taxpayers as there is no market pressure to offer the most competitive bid. This contract's significant value amplifies the potential financial impact of the lack of competition.

Public Impact

The U.S. Army is the primary beneficiary, receiving essential waste management and port services to support its operations. Services include trash and garbage collection, as well as port sanitation services, crucial for maintaining operational readiness and environmental compliance. The contract has a broad geographic impact, covering operations in Oregon and potentially other unspecified locations. The contract supports a significant workforce, though specific numbers are not detailed, likely involving personnel in logistics, sanitation, and management.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Extended contract duration (over 18 years) increases risk of obsolescence and cost escalation.
Sole-source award limits competitive pressure, potentially leading to higher costs for taxpayers.
Cost-plus contract type shifts financial risk to the government, potentially incentivizing less cost-conscious spending.
Lack of transparency regarding specific performance metrics and outcomes makes it difficult to assess effectiveness.
Absence of small business participation may indicate missed opportunities for economic inclusion.

Positive Signals

Long-term commitment provides stability for essential services, ensuring continuity for Army operations.
The contract addresses critical infrastructure support functions (waste and port services) vital for military readiness.
The extensive duration may reflect a strategic decision to secure long-term, specialized services.
The award to a known entity (Raytheon) might suggest a level of trust in their capability to perform complex tasks.

Sector Analysis

This contract falls within the Construction and Facilities Support Services sector, specifically focusing on waste management and port services. The federal government is a major consumer of such services, particularly for its extensive military installations and logistical hubs. The market for large-scale waste management and specialized port services is often dominated by a few large contractors capable of handling the scale and complexity required by government agencies. The $2.14 billion value over 18 years positions this as a significant contract within its niche.

Small Business Impact

The contract data indicates that this was not a small business set-aside, and the prime contractor is Raytheon Engineers & Constructors, a large entity. There is no explicit information on subcontracting plans for small businesses. The absence of small business participation in such a large, long-term contract suggests a potential missed opportunity to leverage the small business ecosystem for specialized services within waste management or port operations.

Oversight & Accountability

Oversight mechanisms for this contract are not detailed in the provided data. As a large, long-term federal contract, it would typically be subject to oversight from the contracting agency (Department of the Army), potentially involving program managers, contract specialists, and quality assurance personnel. Inspector General (IG) reviews could also occur, particularly concerning financial accountability and performance. Transparency is limited by the sole-source nature and lack of publicly available performance reports.

Related Government Programs

Federal Facilities Support Services
Department of Defense Logistics Contracts
Environmental Services Contracts
Port Operations and Management
Waste Management Services

Risk Flags

Long contract duration
Sole-source award
Cost-plus contract type
Lack of small business participation
Potential for cost escalation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $2.14 billion to WASHINGTON DEMILITARIZATION COMPANY LLC. 199712!2100!6004!AA09 !U.S. ARMY INDUSTRIAL OPERATIONS !DAAA0997C0025 !A!*!P00006 !19970929!19970929!879410652!802675199!001339159!N!085U6!RAYTHEON ENGINEERS & CONSTRUCT!30 S 17TH ST !PHILADELPHIA !PA!19103!33700!059!41!HERMISTON !UMATILLA !OREGON !0001!+000011041600!N!N!000000000000!S205!TRASH/GARBAGE COLLECTION SRVCS-INCL PORT SAN SVCS !C2 !CONSTRUCTION !1000!NOT DISCERNABLE OR CLASSIFIED !4953!3!*!*!C!B!A!*!D !N!S!1!0

Who is the contractor on this award?

The obligated recipient is WASHINGTON DEMILITARIZATION COMPANY 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 $2.14 billion.

What is the period of performance?

Start: 1997-09-29. End: 2018-05-16.

What specific services are included under 'TRASH/GARBAGE COLLECTION SRVCS-INCL PORT SAN SVCS' and how has the scope evolved over the contract's lifespan?

The service description 'TRASH/GARBAGE COLLECTION SRVCS-INCL PORT SAN SVCS' indicates a dual focus on general waste disposal and sanitation services specifically for port facilities. This likely encompasses collection, transportation, and disposal of solid waste, as well as potentially cleaning, disinfection, and maintenance of sanitation infrastructure within Army ports. Over its 18-year duration, the scope may have evolved due to changes in environmental regulations, military operational needs, or technological advancements in waste management. Without access to contract modifications and performance reports, the precise evolution of services remains unclear, but such long-term contracts often see scope adjustments to remain relevant and compliant.

How does the $2.14 billion total obligated amount compare to the initial estimated cost and what factors contributed to the final value?

The provided data shows a total obligated amount of $2.14 billion. However, it does not specify an initial estimated cost. Given the contract type (Cost No Fee), the final value is determined by the actual costs incurred by the contractor, plus any agreed-upon fee (which is zero in this case). Factors contributing to the final value would include the volume and type of waste generated, the complexity of port sanitation requirements, labor costs, equipment, disposal fees, and any unforeseen operational challenges over the 18-year period. The significant final value suggests either a very large scale of operations or potentially higher-than-anticipated costs, especially without competitive pressure to drive efficiency.

What are the risks associated with a Cost No Fee (CNF) contract of this magnitude and duration?

A Cost No Fee (CNF) contract, especially one valued at $2.14 billion over 18 years, presents several risks. Primarily, the government bears the financial risk, covering all allowable costs incurred by the contractor. Since there is no fee, the contractor has less direct financial incentive to control costs aggressively, potentially leading to inefficiencies or higher overall expenditures. The long duration exacerbates these risks, as costs can escalate due to inflation, changing regulations, and technological shifts. Effective government oversight is crucial to monitor costs, ensure compliance, and prevent potential waste or fraud. The lack of competition further amplifies these risks by reducing market-driven cost controls.

What is the track record of Raytheon Engineers & Constructors in managing large-scale federal contracts, particularly in waste management or similar services?

Raytheon Engineers & Constructors, as part of the larger Raytheon Technologies (now RTX), has a significant history of managing large, complex federal contracts across various sectors, including defense, aerospace, and infrastructure. While specific details on their track record solely in waste management and port sanitation for the Army over this extended period require deeper investigation into historical contract performance data, their general experience with government projects suggests a capacity for large-scale operations. However, the performance quality, cost-effectiveness, and adherence to timelines on this specific $2.14 billion contract would need to be assessed through agency performance reviews and historical payment data.

How does the geographic scope (Oregon mentioned) impact the contract's complexity and cost?

The mention of Oregon (Hermiston, Umatilla) as a location indicates a specific operational base, but the contract likely covers broader geographic areas given the nature of Army logistics and waste management. If the contract involves multiple sites, especially dispersed ones, it significantly increases complexity and cost. Managing waste collection, transportation, and disposal across different regions requires intricate logistical planning, adherence to varied local regulations, and potentially higher transportation costs. The scale of operations in Oregon, if representative of other locations, suggests substantial infrastructure and personnel are required, contributing to the overall $2.14 billion value.

Given the sole-source nature, what alternative mechanisms might have been considered to ensure better value or competition?

While the contract was awarded sole-source, alternative mechanisms could have been explored prior to or during its lifecycle. If the initial sole-source justification was based on unique capabilities, periodic re-evaluation could determine if other vendors have since developed similar expertise. Options might include breaking down the requirement into smaller, more competitive service contracts, or conducting market research to identify potential new entrants. Furthermore, incorporating performance-based incentives, even within a sole-source framework, could encourage greater efficiency and value. A phased approach, transitioning to competitive bidding for specific components or future contract renewals, could also introduce competition over time.

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST NO FEE (S)

Evaluated Preference: NONE

Contractor Details

Parent Company: AECOM (UEI: 153561212)

Address: 78068 ORDNANCE RD, HERMISTON, OR, 97838

Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline