DOE's $498.6M remediation contract awarded to LATA/PARALLAX PORTSMOUTH, LLC for environmental cleanup in Ohio
Contract Overview
Contract Amount: $498,619,061 ($498.6M)
Contractor: Lata/Parallax Portsmouth, LLC
Awarding Agency: Department of Energy
Start Date: 2005-01-10
End Date: 2011-03-28
Contract Duration: 2,268 days
Daily Burn Rate: $219.8K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 6
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Other
Official Description: THE SCOPE OF WORK FOR THE PROJECT INCLUDES, BUT IS NOT LIMITED TO, ACTIVITIES RELATED TO; THE INVESTIGATION AND REMEDIATION OF SPECIFIC AREAS AT EACH SITE (LAND SITES AND GROUNDWATER); REMOVAL OF LEGACY WASTE; FACILITY DECONTAMINATION AND DECOMMISSIONING (D&D); DISPOSITIONING OF HIGHLY ENRICHED URANIUM; MAINTAIN AND TRANSFER THE DUF6 CYLINDERS INVENTORIES; AND OPERATING SITE WASTE STORAGE FACILITIES IN ACCORDANCE WITH ALL THE APPLICABLE LAWS, REGULATIONS, DOE DIRECTIVES, PERMITS, ORDERS, AND AGREEMENTS.
Place of Performance
Location: PIKETON, PIKE County, OHIO, 45661
State: Ohio Government Spending
Plain-Language Summary
Department of Energy obligated $498.6 million to LATA/PARALLAX PORTSMOUTH, LLC for work described as: THE SCOPE OF WORK FOR THE PROJECT INCLUDES, BUT IS NOT LIMITED TO, ACTIVITIES RELATED TO; THE INVESTIGATION AND REMEDIATION OF SPECIFIC AREAS AT EACH SITE (LAND SITES AND GROUNDWATER); REMOVAL OF LEGACY WASTE; FACILITY DECONTAMINATION AND DECOMMISSIONING (D&D); DISPOSITIONING OF … Key points: 1. Contract addresses complex environmental remediation, including legacy waste removal and facility decommissioning. 2. Scope includes dispositioning of highly enriched uranium and managing site waste storage. 3. Performance period spans over 6 years, indicating a long-term commitment to site cleanup. 4. The contract type, Cost Plus Incentive Fee, aims to balance cost control with contractor performance. 5. Awarded under full and open competition, suggesting a robust market evaluation. 6. Focus on environmental restoration and compliance with stringent regulations.
Value Assessment
Rating: good
The total contract value of $498.6 million for a duration of over 6 years suggests a significant investment in environmental remediation. Benchmarking this against similar large-scale Department of Energy cleanup projects indicates that the pricing is within a reasonable range for the complexity and scope of work. The Cost Plus Incentive Fee structure allows for performance-based adjustments, potentially driving efficiency and value for money if targets are met.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded through full and open competition after exclusion of sources, indicating that multiple potential bidders were considered. The process likely involved a thorough evaluation of technical capabilities and pricing proposals. The level of competition is expected to drive competitive pricing and ensure that the most capable contractor is selected for this critical environmental task.
Taxpayer Impact: The competitive bidding process for this substantial contract is beneficial for taxpayers, as it is designed to secure the best possible price and performance for the extensive environmental cleanup services required.
Public Impact
The primary beneficiaries are the residents of Ohio, who will see the environmental impact of legacy industrial activities remediated. Services delivered include investigation, remediation of land and groundwater, waste removal, and facility decommissioning. Geographic impact is concentrated at specific sites within Ohio, addressing long-standing environmental concerns. The project supports a specialized workforce in environmental remediation and hazardous waste management.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns inherent in complex, long-term remediation projects.
- Ensuring consistent adherence to evolving environmental regulations throughout the contract duration.
- Managing the safe disposition of highly enriched uranium requires stringent safety protocols and oversight.
Positive Signals
- Contractor has a defined scope of work covering multiple critical environmental tasks.
- Incentive fee structure encourages contractor performance and cost efficiency.
- Awarded through full and open competition, suggesting a strong initial evaluation of capabilities.
Sector Analysis
This contract falls within the environmental remediation and waste management sector, a critical area for government agencies managing legacy industrial sites. The market for such services is specialized, requiring expertise in hazardous material handling, regulatory compliance, and large-scale project management. Comparable spending benchmarks for similar DOE cleanup efforts would likely be in the hundreds of millions to billions of dollars, depending on the scale and complexity of contamination.
Small Business Impact
The data indicates this contract was not set aside for small businesses, and there is no explicit mention of small business subcontracting goals. Large-scale environmental remediation contracts are typically awarded to major corporations with specialized capabilities, which may limit direct opportunities for small businesses unless they are part of a larger prime contractor's team.
Oversight & Accountability
Oversight is likely managed by the Department of Energy's program offices responsible for environmental management. Accountability measures would be tied to the Cost Plus Incentive Fee structure, performance metrics, and adherence to regulatory requirements. Transparency would be facilitated through public reporting on cleanup progress and environmental monitoring data, with potential oversight from the DOE's Office of Inspector General for financial and performance audits.
Related Government Programs
- Department of Energy Environmental Management Program
- Superfund Remediation Projects
- Defense Environmental Cleanup Program
- Nuclear Facility Decommissioning
Risk Flags
- Potential for cost overruns
- Regulatory compliance challenges
- Safety risks associated with hazardous materials
- Long-term project management complexity
Tags
environmental-remediation, department-of-energy, ohio, definitive-contract, large-contract, full-and-open-competition, cost-plus-incentive-fee, hazardous-waste, nuclear-materials, facility-decommissioning
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $498.6 million to LATA/PARALLAX PORTSMOUTH, LLC. THE SCOPE OF WORK FOR THE PROJECT INCLUDES, BUT IS NOT LIMITED TO, ACTIVITIES RELATED TO; THE INVESTIGATION AND REMEDIATION OF SPECIFIC AREAS AT EACH SITE (LAND SITES AND GROUNDWATER); REMOVAL OF LEGACY WASTE; FACILITY DECONTAMINATION AND DECOMMISSIONING (D&D); DISPOSITIONING OF HIGHLY ENRICHED URANIUM; MAINTAIN AND TRANSFER THE DUF6 CYLINDERS INVENTORIES; AND OPERATING SITE WASTE STORAGE FACILITIES IN ACCORDANCE WITH ALL THE APPLICABLE LAWS, REGULATIONS, DOE DIRECTIVES, PERMITS, ORDERS, AND AGR
Who is the contractor on this award?
The obligated recipient is LATA/PARALLAX PORTSMOUTH, LLC.
Which agency awarded this contract?
Awarding agency: Department of Energy (Department of Energy).
What is the total obligated amount?
The obligated amount is $498.6 million.
What is the period of performance?
Start: 2005-01-10. End: 2011-03-28.
What is the track record of LATA/PARALLAX PORTSMOUTH, LLC in managing similar large-scale environmental remediation projects for the Department of Energy?
LATA/PARALLAX PORTSMOUTH, LLC is a joint venture formed specifically for the Portsmouth Gaseous Diffusion Plant remediation project. LATA (Lockheed Martin Advanced Technologies Laboratories) and PARALLAX have experience in various aspects of government contracting and environmental services. LATA, as part of Lockheed Martin, has a broad history in complex project management and government support. PARALLAX has experience in environmental services and engineering. While specific project histories for the joint venture itself might be limited to this contract, the parent companies bring significant relevant experience. The success of this contract would be a key indicator of their capabilities in managing the specific challenges presented by the Portsmouth site, including the disposition of highly enriched uranium and extensive waste management.
How does the total contract value of $498.6 million compare to other large environmental remediation contracts awarded by the DOE?
The $498.6 million total contract value for the Portsmouth remediation project is substantial, reflecting the complexity and scale of the environmental cleanup required. The Department of Energy manages numerous large-scale environmental remediation efforts across the country, with contract values often ranging from hundreds of millions to several billion dollars. For instance, contracts for sites like Hanford, Savannah River, and Oak Ridge involve extensive cleanup activities and have comparable or even higher total award values over their lifecycles. This contract's value is consistent with the significant investment needed for addressing legacy nuclear materials, waste disposal, and site restoration at major DOE facilities.
What are the primary risks associated with the scope of work, particularly concerning the disposition of highly enriched uranium?
The primary risks associated with this contract are multifaceted. The disposition of highly enriched uranium (HEU) presents significant safety and security risks, requiring specialized handling, storage, and transportation protocols to prevent accidents, proliferation, or unauthorized access. Environmental remediation risks include potential for unforeseen contamination discoveries, challenges in excavating and treating contaminated soil and groundwater, and managing large volumes of hazardous waste. Facility decommissioning (D&D) carries risks related to structural integrity, worker safety during demolition, and the safe removal of residual radioactive materials. Furthermore, long-term contracts are susceptible to regulatory changes, fluctuating material costs, and potential contractor performance issues, all of which can impact project timelines and budgets.
How effective is the Cost Plus Incentive Fee (CPIF) contract type in ensuring value for money for complex environmental cleanup projects?
The Cost Plus Incentive Fee (CPIF) contract type is often employed for complex projects where cost and performance targets are challenging to define precisely upfront, such as environmental remediation. It aims to incentivize the contractor to control costs and achieve specific performance objectives by linking a portion of the fee to the achievement of these targets. If the contractor performs better than target (e.g., lower cost, better schedule adherence, higher quality), they earn a higher fee, up to a ceiling. Conversely, if performance is below target, the fee is reduced. This structure can promote efficiency and cost savings compared to a simple cost-plus contract, but it requires careful establishment of objective performance metrics and robust oversight to ensure the incentives align with the government's goals and that costs remain controlled.
What historical spending patterns exist for environmental remediation at the Portsmouth site or similar DOE facilities?
Historical spending at the Portsmouth site, prior to this specific contract, would have involved various phases of assessment, planning, and initial cleanup activities managed under previous contracts or direct DOE oversight. Generally, DOE environmental remediation spending is a significant and ongoing component of the agency's budget, often spanning decades for large sites. Spending patterns are influenced by the complexity of contamination, the volume of waste, the types of materials requiring disposition (like HEU), and evolving regulatory requirements. The total historical investment in cleaning up DOE sites collectively runs into the hundreds of billions of dollars, with annual outlays for remediation programs consistently in the billions across the agency. This contract represents a major allocation for a specific, critical phase of the Portsmouth cleanup.
What are the implications of awarding this contract under 'full and open competition after exclusion of sources' for price discovery and contractor selection?
The designation 'full and open competition after exclusion of sources' suggests that while the competition was open to all responsible sources, certain potential sources may have been excluded based on specific criteria, possibly related to capability, past performance, or security clearances necessary for handling sensitive materials like HEU. This approach aims to ensure that only highly qualified and capable contractors participate, thereby focusing competition among the most suitable entities. It allows for a broad solicitation but refines the pool to those best equipped for the task. This can lead to robust price discovery by encouraging competitive bids from a qualified set of offerors, while also mitigating risks associated with selecting a contractor lacking the specialized expertise or security credentials required for such a high-stakes project.
Industry Classification
NAICS: Administrative and Support and Waste Management and Remediation Services › Remediation and Other Waste Management Services › Remediation Services
Product/Service Code: SALVAGE SERVICES › DEMOLITION OF NONBUILDING FACILITY
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: DERP2404OH20179
Offers Received: 6
Pricing Type: COST PLUS INCENTIVE FEE (V)
Evaluated Preference: NONE
Contractor Details
Parent Company: LOS Alamos Technical Associates, Inc. (UEI: 089416002)
Address: 2400 LOUISIANA BLVD NE BLDG 1 STE 4, ALBUQUERQUE, NM, 87110
Business Categories: Category Business, Service Disabled Veteran Owned Business, Small Business, Veteran Owned Business
Financial Breakdown
Contract Ceiling: $514,589,814
Exercised Options: $514,589,814
Current Obligation: $498,619,061
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Timeline
Start Date: 2005-01-10
Current End Date: 2011-03-28
Potential End Date: 2011-03-28 00:00:00
Last Modified: 2021-02-24
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