DOE's $746.5M Environmental Restoration Contract Awarded to Bechtel National, Inc
Contract Overview
Contract Amount: $746,503,368 ($746.5M)
Contractor: Bechtel National, Inc.
Awarding Agency: Department of Energy
Start Date: 1999-10-15
End Date: 2005-08-26
Contract Duration: 2,142 days
Daily Burn Rate: $348.5K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: COST PLUS AWARD FEE
Sector: Other
Official Description: ENVIRONMENTAL RESTORATION MANAGEMENT CONTRACT AWARD PHASE IN
Place of Performance
Location: RICHLAND, BENTON County, WASHINGTON, 99354
Plain-Language Summary
Department of Energy obligated $746.5 million to BECHTEL NATIONAL, INC. for work described as: ENVIRONMENTAL RESTORATION MANAGEMENT CONTRACT AWARD PHASE IN Key points: 1. Contract focused on environmental restoration, indicating a significant long-term commitment to site cleanup. 2. Awarded under full and open competition, suggesting a robust process for selecting the contractor. 3. The contract type (Cost Plus Award Fee) allows for performance-based incentives. 4. Duration of 2142 days (approx. 5.8 years) points to a substantial and complex project. 5. The North American Industry Classification System (NAICS) code 562910 signifies a focus on remediation services. 6. The contract was awarded in 1999, providing historical context for current environmental spending.
Value Assessment
Rating: fair
Benchmarking the value of this contract is challenging without specific performance metrics and detailed cost breakdowns. The Cost Plus Award Fee structure implies that the final cost could vary based on performance, making direct price comparisons difficult. However, the substantial dollar amount suggests a significant investment in environmental cleanup, which, if effective, could represent good value for taxpayer money in the long run by mitigating environmental hazards.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that multiple bidders likely had the opportunity to submit proposals. This competitive process is generally expected to drive down costs and ensure the government receives the best value. The presence of two bids (no: 2) suggests a moderate level of competition for this significant environmental restoration project.
Taxpayer Impact: Full and open competition typically benefits taxpayers by fostering a competitive environment that can lead to more cost-effective solutions and prevent price gouging.
Public Impact
The primary beneficiaries are the public and the environment, through the remediation of contaminated sites. Services delivered include environmental restoration and remediation activities. The geographic impact is likely concentrated in areas managed by the Department of Energy requiring cleanup. Workforce implications include the creation of jobs in environmental science, engineering, and construction.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns inherent in cost-plus contracts if not rigorously managed.
- Complexity of environmental restoration can lead to unforeseen challenges and scope creep.
- Long contract duration may require adjustments to evolving environmental regulations and technologies.
Positive Signals
- Awarded through full and open competition, suggesting a fair and transparent selection process.
- Cost Plus Award Fee structure incentivizes contractor performance and efficiency.
- Significant investment in environmental restoration addresses long-term public health and safety concerns.
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 cleanup, and regulatory compliance. The market size for environmental remediation is substantial, driven by historical industrial activities and ongoing regulatory requirements. This contract represents a significant portion of federal spending dedicated to addressing legacy environmental contamination.
Small Business Impact
The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, the primary contractor, Bechtel National, Inc., is likely a large business. While there is no direct indication of small business subcontracting requirements in the provided data, large federal contracts often include provisions for small business participation, which would be a key area for further investigation to understand the impact on the small business ecosystem.
Oversight & Accountability
Oversight for this contract would typically be managed by the Department of Energy's contracting officers and program managers. The Cost Plus Award Fee structure implies performance monitoring and evaluation to determine award fees. Inspector General jurisdiction would likely apply to ensure the integrity of the contracting process and prevent fraud, waste, and abuse. Transparency would be facilitated through contract award databases and potentially public reports on environmental cleanup progress.
Related Government Programs
- Department of Energy Environmental Management Program
- Superfund Program (EPA)
- Defense Environmental Restoration Program (DoD)
Risk Flags
- Potential for cost overruns due to CPAF structure.
- Complexity of environmental remediation leading to schedule delays.
- Unforeseen site conditions impacting scope and cost.
- Long contract duration requiring adaptability to changing regulations.
Tags
environmental-restoration, remediation-services, department-of-energy, bechtel-national-inc, definitive-contract, cost-plus-award-fee, full-and-open-competition, large-contract, federal-spending, environmental-cleanup, washington, 1999-award
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $746.5 million to BECHTEL NATIONAL, INC.. ENVIRONMENTAL RESTORATION MANAGEMENT CONTRACT AWARD PHASE IN
Who is the contractor on this award?
The obligated recipient is BECHTEL NATIONAL, INC..
Which agency awarded this contract?
Awarding agency: Department of Energy (Department of Energy).
What is the total obligated amount?
The obligated amount is $746.5 million.
What is the period of performance?
Start: 1999-10-15. End: 2005-08-26.
What was Bechtel National, Inc.'s track record with similar environmental restoration contracts prior to this award?
Prior to this $746.5 million award in 1999, Bechtel National, Inc. had a significant history in large-scale engineering, construction, and project management, including involvement in complex environmental projects. Their experience often spanned nuclear facility decommissioning, hazardous waste management, and infrastructure development. While specific details of prior environmental restoration contracts are not in this data snippet, Bechtel's general reputation as a major player in the engineering and construction industry suggests they possessed the requisite experience and capacity to undertake such a large and complex environmental restoration effort for the Department of Energy.
How does the $746.5 million total award amount compare to other large environmental restoration contracts awarded around the same period?
The $746.5 million award to Bechtel National, Inc. for environmental restoration in 1999 was a substantial sum, indicative of the scale and complexity of the cleanup efforts undertaken by the Department of Energy. During the late 1990s and early 2000s, federal agencies, particularly the DOE and the EPA (through the Superfund program), were awarding numerous large contracts for environmental remediation. Contracts of this magnitude were not uncommon for major site cleanups, such as former nuclear weapons production facilities or large industrial sites with significant contamination. Benchmarking would require comparing the scope of work, duration, and specific remediation technologies employed across various contracts to determine if this award represented a particularly high or standard cost for the services rendered.
What were the primary risks identified for this contract, and how were they mitigated?
The primary risks for a contract of this nature typically include technical challenges in remediation, potential for unforeseen contamination, cost overruns, schedule delays, and regulatory compliance issues. Given the Cost Plus Award Fee (CPAF) structure, risks related to cost control are significant. Mitigation strategies would likely involve rigorous project management, detailed site characterization, phased execution of work, robust quality assurance/quality control programs, and close collaboration with regulatory agencies. The award fee component itself serves as a risk mitigation tool by incentivizing the contractor to manage risks effectively and achieve performance targets.
How effective was the Cost Plus Award Fee (CPAF) structure in ensuring program effectiveness and value for money?
The effectiveness of a CPAF structure hinges on the clarity and attainability of the award criteria and the rigor of the oversight. For this environmental restoration contract, the CPAF aimed to incentivize Bechtel National, Inc. to perform efficiently and effectively by linking a portion of their profit to achieving specific performance objectives. If the award criteria were well-defined and aligned with the program's goals (e.g., timely cleanup, cost control, safety, environmental protection), the CPAF could drive better outcomes than a simple cost-plus contract. However, without access to the specific award criteria and the actual award fees paid, it's difficult to definitively assess its effectiveness in this instance. Robust government oversight is crucial to prevent the CPAF from becoming a de facto fixed fee.
What historical spending patterns does this $746.5 million award reflect within the Department of Energy's environmental restoration efforts?
This $746.5 million award reflects a significant investment in the Department of Energy's broader environmental restoration mission, which began in earnest in the late 1980s and early 1990s. The DOE inherited a vast legacy of environmental contamination from decades of nuclear weapons production. Spending in this area has historically been substantial, often running into billions of dollars annually across numerous sites. This single contract award indicates a major, multi-year effort at a specific site or set of sites, consistent with the large-scale, long-term nature of cleaning up complex industrial and nuclear facilities. It underscores the ongoing federal commitment to addressing these legacy environmental liabilities.
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
Offers Received: 2
Pricing Type: COST PLUS AWARD FEE (R)
Contractor Details
Parent Company: Bechtel Group, Inc. (UEI: 094878980)
Address: 50 BEALE ST STE 1, SAN FRANCISCO, CA, 94105
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $411,805,000
Exercised Options: $411,805,000
Current Obligation: $746,503,368
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Timeline
Start Date: 1999-10-15
Current End Date: 2005-08-26
Potential End Date: 2005-08-26 00:00:00
Last Modified: 2016-11-18
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