DoD's $1.8B hazardous waste contract with EG&G Defense Materials shows long duration and cost-plus structure

Contract Overview

Contract Amount: $1,815,674,047 ($1.8B)

Contractor: EG&G Defense Materials, Inc.

Awarding Agency: Department of Defense

Start Date: 2003-05-16

End Date: 2017-02-08

Contract Duration: 5,017 days

Daily Burn Rate: $361.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS AWARD FEE

Sector: Other

Place of Performance

Location: STOCKTON, TOOELE County, UTAH, 84071

State: Utah Government Spending

Plain-Language Summary

Department of Defense obligated $1.82 billion to EG&G DEFENSE MATERIALS, INC. for work described as: Key points: 1. The contract's duration of over 13 years suggests a long-term need for hazardous waste services. 2. A Cost Plus Award Fee (CPAF) structure can incentivize performance but may lead to higher costs if not managed carefully. 3. The significant total award amount indicates a substantial investment in hazardous waste management. 4. The contract was awarded under full and open competition, suggesting a robust bidding process. 5. The North American Industry Classification System (NAICS) code 562211 points to specialized hazardous waste treatment and disposal services. 6. The contract's completion date in 2017 means current needs may be met by successor contracts. 7. The absence of small business set-aside flags indicates the primary contractor is not a small business, and subcontracting opportunities are not explicitly mandated by this flag.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific performance metrics or comparable contract data. The Cost Plus Award Fee (CPAF) structure, while common for complex services, can sometimes lead to costs exceeding fixed-price contracts if cost controls are not stringent. The total award of over $1.8 billion over its lifespan indicates a significant expenditure, and its value is contingent on the effective and compliant disposal of hazardous waste, which is critical for environmental protection and regulatory compliance. Without detailed breakdowns of costs versus services rendered, a definitive value assessment is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition,' indicating that all responsible sources were permitted to submit a bid. This suggests a competitive environment that should, in theory, lead to better pricing and service offerings. The presence of 3 bids (as indicated by 'no': 3) suggests a moderate level of competition for this specialized service. A higher number of bidders typically correlates with more competitive pricing.

Taxpayer Impact: A full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down costs and improve service quality, ensuring that government funds are used efficiently.

Public Impact

The Department of the Army benefits from essential hazardous waste treatment and disposal services, ensuring compliance with environmental regulations. The contract supports the safe management and disposal of hazardous materials, mitigating environmental risks. The services provided are critical for military operations and installations, maintaining operational readiness and environmental stewardship. The contract likely supported jobs in specialized waste management and environmental services, contributing to the sector's workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus award fee contracts can sometimes lead to cost overruns if not closely monitored.
Long contract durations (over 13 years) can sometimes mask inefficiencies or a lack of innovation if not actively managed.
Specialized hazardous waste disposal is a critical but potentially high-risk service area requiring stringent oversight.

Positive Signals

Awarded under full and open competition, suggesting a competitive bidding process.
The contract addresses a critical government need for hazardous waste management.
The award fee component incentivizes contractor performance, potentially leading to better outcomes.

Sector Analysis

The hazardous waste treatment and disposal sector is a critical component of environmental services, supporting various industries and government agencies. This contract falls within the environmental remediation and waste management sub-sector. The market for hazardous waste services is driven by stringent regulatory requirements and the need for specialized expertise. Comparable spending benchmarks would typically be found within other large-scale government contracts for environmental services or within private sector industrial waste management expenditures, which are often substantial due to regulatory compliance needs.

Small Business Impact

The data indicates this contract was not set aside for small businesses (sb: false) and the primary contractor, EG&G Defense Materials, Inc., is likely not a small business given the contract's scale. This suggests that small businesses may have had opportunities to participate as subcontractors, but there is no explicit mandate for subcontracting within the provided data. The impact on the small business ecosystem would depend on the subcontracting opportunities offered by the prime contractor.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and their representatives within the Department of the Army. The Cost Plus Award Fee (CPAF) structure necessitates robust oversight to ensure costs are reasonable and that performance targets are met to earn award fees. Transparency would be facilitated through contract reporting mechanisms, and accountability would be tied to the contractor's adherence to contract terms, performance standards, and regulatory requirements. Inspector General involvement is possible for investigations into fraud, waste, or abuse.

Related Government Programs

Environmental Remediation Services
Hazardous Material Management
Defense Logistics Agency Contracts
EPA Superfund Contracts
Department of Energy Environmental Services

Risk Flags

Long contract duration
Cost-plus award fee structure
High total award value

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $1.82 billion to EG&G DEFENSE MATERIALS, INC.. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is EG&G DEFENSE MATERIALS, 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 $1.82 billion.

What is the period of performance?

Start: 2003-05-16. End: 2017-02-08.

What was the actual total amount paid under this contract, and how did it compare to the total award amount?

The provided data indicates a total award amount ('a') of $1,815,674,046.64. However, this figure represents the total value obligated or awarded over the contract's life, not necessarily the amount actually paid out. To determine the actual amount paid, one would need access to contract payment data, often available through systems like the Federal Procurement Data System (FPDS) or agency-specific financial reports. Without this detailed payment history, it's impossible to definitively state the exact expenditure versus the total awarded value. It's common for awarded amounts to be higher than actual payments due to factors like contract modifications, cancellations, or unexercised options.

How did EG&G Defense Materials, Inc.'s performance compare to other bidders or industry benchmarks during the contract period?

Assessing EG&G Defense Materials, Inc.'s performance relative to other bidders or industry benchmarks requires access to performance evaluations, award fee determinations, and potentially debriefing information from the original competition. The 'Cost Plus Award Fee' (CPAF) structure implies that performance was formally evaluated against specific criteria, and award fees were granted based on meeting or exceeding these targets. Without access to these internal performance reports or post-award reviews, it is difficult to make a direct comparison. Industry benchmarks for hazardous waste treatment and disposal are often based on cost-efficiency, compliance rates, safety records, and turnaround times, but specific comparative data for this contract's period is not publicly detailed.

What were the primary types of hazardous waste managed under this contract, and what disposal methods were employed?

The contract's NAICS code (562211) specifies 'Hazardous Waste Treatment and Disposal.' While this indicates the general nature of the services, the specific types of waste (e.g., chemical, biological, radioactive, industrial) and the disposal methods (e.g., incineration, landfilling, chemical treatment, recycling) are not detailed in the summary data. Such specifics would typically be outlined in the contract's Statement of Work (SOW) or Performance Work Statement (PWS). These details are crucial for understanding the environmental scope and potential risks associated with the contract. Information on specific waste streams and methods would likely be found in detailed contract documentation or agency environmental compliance reports.

What is the historical spending trend for hazardous waste treatment and disposal services by the Department of the Army?

The provided data focuses on a single, large contract ($1.8B) awarded to EG&G Defense Materials, Inc. To understand the historical spending trend for hazardous waste treatment and disposal by the Department of the Army, a broader analysis of procurement data over multiple fiscal years is necessary. This would involve querying databases like FPDS to aggregate spending across all contracts related to NAICS code 562211 and similar codes within the Army's portfolio. Trends would reveal whether spending has increased, decreased, or remained stable, and identify major contractors or contract types dominating the expenditure. This specific contract represents a significant portion of spending during its active period but does not alone define the overall trend.

Were there any significant contract modifications, overruns, or disputes associated with this contract?

The provided summary data does not include information on contract modifications, cost overruns, or disputes. Such details are typically found in contract modification histories and contract performance management reports. Significant modifications could alter the original scope, duration, or cost. Overruns might indicate challenges in cost estimation or execution, while disputes could signal disagreements over contract terms or performance. Investigating these aspects would require accessing more granular contract data, such as modification logs and any associated legal or administrative records, which are not present in the initial data summary.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Waste Treatment and Disposal › Hazardous Waste Treatment and Disposal

Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCT NONBUILDING FACILITIES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 3

Pricing Type: COST PLUS AWARD FEE (R)

Contractor Details

Parent Company: AECOM (UEI: 153561212)

Address: 11600 STARK RD, TOOELE, UT, 84074

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline