DOE's $2.86B Hazardous Waste Contract with CH2M HILL HANFORD GROUP, INC. Awarded in 1999
Contract Overview
Contract Amount: $2,857,636,921 ($2.9B)
Contractor: CH2M Hill Hanford Group, Inc
Awarding Agency: Department of Energy
Start Date: 1999-09-15
End Date: 2012-09-30
Contract Duration: 4,764 days
Daily Burn Rate: $599.8K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: COST PLUS INCENTIVE
Sector: Other
Place of Performance
Location: RICHLAND, BENTON County, WASHINGTON, 99354
Plain-Language Summary
Department of Energy obligated $2.86 billion to CH2M HILL HANFORD GROUP, INC for work described as: Key points: 1. Significant contract value of $2.86 billion over its life. 2. Full and open competition was utilized, suggesting a competitive bidding process. 3. The contract type is Cost Plus Incentive, which can lead to cost overruns if not managed carefully. 4. The sector is Hazardous Waste Treatment and Disposal, a critical but complex area.
Value Assessment
Rating: fair
The contract value is substantial. Without specific benchmarks for hazardous waste treatment and disposal services of this scale and complexity, it's difficult to definitively assess its value. The Cost Plus Incentive fee structure introduces risk.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which typically fosters competitive pricing. However, the Cost Plus Incentive fee structure means the final price is not fixed and can fluctuate based on performance and costs incurred.
Taxpayer Impact: The competitive award process is intended to secure fair pricing for taxpayers. However, the cost-plus nature of the contract requires diligent oversight to ensure costs remain reasonable and justified.
Public Impact
Ensures critical hazardous waste cleanup and disposal services are provided. Potential for long-term environmental impact, both positive (cleanup) and negative (if not managed properly). Significant taxpayer investment in environmental remediation.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Incentive fee structure can incentivize higher costs.
- Long contract duration (1999-2012) may lead to scope creep or outdated practices.
- Lack of small business participation noted.
Positive Signals
- Awarded under full and open competition.
- Addresses a critical national environmental need.
Sector Analysis
This contract falls within the environmental services sector, specifically hazardous waste treatment and disposal. Spending in this sector is often driven by regulatory requirements and historical contamination, making it a necessary but potentially costly area of government expenditure.
Small Business Impact
The data indicates that small business participation was not a factor in this contract award (sb: false). This suggests that the prime contractor did not subcontract to small businesses, or the contract was structured in a way that did not prioritize small business involvement.
Oversight & Accountability
The Cost Plus Incentive fee structure necessitates robust oversight from the Department of Energy to monitor costs, performance, and ensure adherence to contract terms. Regular audits and performance reviews are crucial for accountability.
Related Government Programs
- Hazardous Waste Treatment and Disposal
- Department of Energy Contracting
- Department of Energy Programs
Risk Flags
- Cost Plus Incentive fee structure can lead to uncontrolled cost growth.
- Long duration may indicate a lack of flexibility or evolving needs.
- No explicit mention of small business subcontracting.
- Complexity of hazardous waste management presents inherent risks.
- Potential for cost overruns if performance incentives are not well-aligned with agency goals.
Tags
hazardous-waste-treatment-and-disposal, department-of-energy, wa, dca, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $2.86 billion to CH2M HILL HANFORD GROUP, INC. See the official description on USAspending.
Who is the contractor on this award?
The obligated recipient is CH2M HILL HANFORD GROUP, INC.
Which agency awarded this contract?
Awarding agency: Department of Energy (Department of Energy).
What is the total obligated amount?
The obligated amount is $2.86 billion.
What is the period of performance?
Start: 1999-09-15. End: 2012-09-30.
What was the final cost of the contract compared to the initial estimates, and how did performance incentives impact the final price?
The contract was awarded in 1999 with an estimated value and ran until 2012. Analyzing the final expenditure against initial projections and understanding how the incentive fee structure influenced cost outcomes would provide insight into the contract's financial effectiveness and the agency's ability to manage cost-plus contracts.
What were the key performance metrics, and how effectively did CH2M HILL HANFORD GROUP, INC. meet them throughout the contract's duration?
Understanding the specific performance metrics tied to the incentive fee is crucial. Evaluating the contractor's success in meeting these targets, particularly concerning hazardous waste treatment and disposal efficiency, safety, and environmental compliance, would reveal the contract's operational effectiveness and risk mitigation.
Were there any significant environmental incidents or cost overruns associated with this contract, and how were they addressed?
Given the nature of hazardous waste management, it's important to assess if any environmental incidents occurred and how they were managed. Additionally, investigating any substantial cost overruns beyond the incentive structure would highlight potential issues in contract management, oversight, or unforeseen challenges in the remediation process.
Industry Classification
NAICS: Administrative and Support and Waste Management and Remediation Services › Waste Treatment and Disposal › Hazardous Waste Treatment and Disposal
Product/Service Code: OPERATION OF GOVT OWNED FACILITY › OPERATE RESTORATION ACTIVITIES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Offers Received: 2
Pricing Type: COST PLUS INCENTIVE (V)
Contractor Details
Parent Company: CH2M Hill Companies, Ltd. (UEI: 027620574)
Address: 2440 STEVENS CENTER PLACE, RICHLAND, WA, 04
Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $3,252,896,648
Exercised Options: $3,252,896,648
Current Obligation: $2,857,636,921
Timeline
Start Date: 1999-09-15
Current End Date: 2012-09-30
Potential End Date: 2012-09-30 00:00:00
Last Modified: 2014-07-28
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