DOE's $320M West Valley Demonstration Project contract awarded to West Valley Environmental Services LLC for remediation services
Contract Overview
Contract Amount: $319,940,763 ($319.9M)
Contractor: West Valley Environmental Services LLC
Awarding Agency: Department of Energy
Start Date: 2007-06-29
End Date: 2016-05-23
Contract Duration: 3,251 days
Daily Burn Rate: $98.4K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: COST PLUS AWARD FEE
Sector: Other
Official Description: WEST VALLEY DEMONSTRATION PROJECT INTERIM END STATE
Place of Performance
Location: WEST VALLEY, CATTARAUGUS County, NEW YORK, 14171
State: New York Government Spending
Plain-Language Summary
Department of Energy obligated $319.9 million to WEST VALLEY ENVIRONMENTAL SERVICES LLC for work described as: WEST VALLEY DEMONSTRATION PROJECT INTERIM END STATE Key points: 1. The contract's cost-plus-award-fee structure incentivizes performance but requires careful monitoring of award fee determinations. 2. Awarded under full and open competition, indicating a robust bidding process. 3. The contract duration of 3251 days (approx. 9 years) suggests a long-term commitment to the remediation effort. 4. The significant dollar value points to a complex and large-scale environmental cleanup operation. 5. The contract's performance period spans over a decade, highlighting the protracted nature of nuclear site remediation. 6. The absence of small business set-asides warrants scrutiny of subcontracting opportunities for smaller firms.
Value Assessment
Rating: fair
Benchmarking the value of this contract is challenging without specific performance metrics and comparable remediation projects. The cost-plus-award-fee (CPAF) structure allows for flexibility but can lead to higher costs if not managed tightly. The total obligated amount of $319,940,763.45 over its life suggests a substantial investment in environmental cleanup. Further analysis would require comparing cost efficiency against similar nuclear site remediation efforts and evaluating the justification for award fees.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting that multiple qualified bidders had the opportunity to submit proposals. This competitive environment is generally expected to drive down costs and improve service quality. The presence of 3 bidders indicates a reasonable level of competition for this specialized remediation service.
Taxpayer Impact: A competitive bidding process for this large contract is beneficial for taxpayers, as it increases the likelihood of securing the best possible price and service for the extensive environmental cleanup required.
Public Impact
The primary beneficiaries are the residents and environment of New York, particularly the Western New York region, through the cleanup of the West Valley Demonstration Project site. The contract delivers critical environmental remediation services, addressing the legacy of nuclear fuel reprocessing. The geographic impact is localized to the West Valley site in New York State. The contract supports a specialized workforce in environmental remediation, engineering, and hazardous waste management.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns inherent in cost-plus contracts if performance targets are not met or if scope creep occurs.
- Long contract duration may lead to complacency or reduced urgency if not actively managed.
- Complexity of nuclear remediation poses inherent technical and safety risks.
- Lack of specific small business participation targets could limit opportunities for smaller firms in the supply chain.
Positive Signals
- Awarded through full and open competition, suggesting a competitive pricing and selection process.
- Cost-plus-award-fee structure incentivizes contractor performance and efficiency.
- The significant investment indicates a commitment to addressing a critical environmental issue.
- The long-term nature of the contract allows for sustained focus on a complex remediation task.
Sector Analysis
The environmental remediation sector, particularly for legacy nuclear sites, is a highly specialized and capital-intensive industry. This contract falls within the broader environmental services market, which includes hazardous waste management, site cleanup, and compliance services. Spending in this sector is often driven by government mandates and long-term cleanup initiatives. Comparable spending benchmarks would typically involve other large-scale federal environmental cleanup contracts, such as those managed by the EPA or other DOE sites.
Small Business Impact
The contract data indicates that small business participation was not a primary set-aside objective (ss: false, sb: false). This suggests that the prime contract was awarded without specific goals for small business involvement. While this doesn't preclude subcontracting, it means that opportunities for small businesses may be less structured. The prime contractor's subcontracting plan, if any, will be crucial in determining the extent to which small businesses contribute to this project and benefit from the contract.
Oversight & Accountability
Oversight for this contract would primarily fall under the Department of Energy's contracting and program management offices. Given the nature of the work, the Inspector General's office likely has jurisdiction for audits and investigations into waste, fraud, and abuse. Transparency would be facilitated through contract award notices, performance reports (if publicly available), and potentially site visitations or public meetings related to the remediation progress.
Related Government Programs
- Department of Energy - Environmental Management
- Environmental Protection Agency - Superfund Program
- Department of Defense - Environmental Restoration
Risk Flags
- Potential for cost overruns in CPAF contracts.
- Long contract duration requires sustained oversight.
- Complexity of nuclear waste remediation presents inherent risks.
- Lack of explicit small business participation goals.
Tags
department-of-energy, environmental-remediation, new-york, definitive-contract, large-contract, full-and-open-competition, cost-plus-award-fee, nuclear-waste, long-term-contract, remediation-services
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $319.9 million to WEST VALLEY ENVIRONMENTAL SERVICES LLC. WEST VALLEY DEMONSTRATION PROJECT INTERIM END STATE
Who is the contractor on this award?
The obligated recipient is WEST VALLEY ENVIRONMENTAL SERVICES LLC.
Which agency awarded this contract?
Awarding agency: Department of Energy (Department of Energy).
What is the total obligated amount?
The obligated amount is $319.9 million.
What is the period of performance?
Start: 2007-06-29. End: 2016-05-23.
What is the historical spending trend for the West Valley Demonstration Project, and how does this contract compare?
The West Valley Demonstration Project has a long history of federal funding for environmental remediation. Prior to this definitive contract, various agreements and smaller contracts would have been in place to manage the site. This $319.9 million contract represents a significant, consolidated investment over a defined period (2007-2016) for the 'Interim End State' of the project. Historical spending data would reveal the cumulative federal commitment to addressing the site's challenges, likely showing phased investments corresponding to different stages of cleanup and stabilization. Comparing this contract's value to prior expenditures would highlight the scale and duration of the current phase of work, indicating whether spending has increased, decreased, or remained consistent relative to previous efforts.
How effectively has West Valley Environmental Services LLC managed costs under this Cost Plus Award Fee (CPAF) contract?
Assessing the cost management effectiveness of West Valley Environmental Services LLC under this CPAF contract requires detailed analysis of award fee determinations and performance metrics. The CPAF structure means the contractor receives a base fee plus an award fee based on performance against specific criteria. To evaluate cost management, one would need to examine: 1) the total amount paid in award fees relative to the base fee, 2) whether the contractor consistently met or exceeded performance targets that justified high award fees, and 3) if the total contract cost remained within projected budgets or if significant cost underruns or overruns occurred. Without access to the specific award fee documentation and performance evaluations, a definitive judgment on cost management effectiveness is difficult, but the total obligated amount provides a ceiling for expenditure.
What are the primary risks associated with the remediation services provided under this contract?
The primary risks associated with this contract are multifaceted, stemming from the nature of nuclear site remediation. These include: 1) **Technical Risks:** Unforeseen geological conditions, structural integrity issues with legacy waste containers, and challenges in safely handling and disposing of radioactive materials. 2) **Safety Risks:** Potential exposure of workers and the environment to hazardous substances, requiring stringent safety protocols and emergency preparedness. 3) **Regulatory Risks:** Evolving environmental regulations or changes in policy could impact cleanup methods or disposal requirements. 4) **Cost Overrun Risks:** The inherent complexity and potential for unexpected discoveries in nuclear cleanup can lead to costs exceeding initial estimates, even with a CPAF structure. 5) **Schedule Delay Risks:** Technical challenges, regulatory hurdles, or logistical issues could prolong the remediation timeline.
How does the competition level (3 bidders) for this contract impact price discovery and value for taxpayers?
Having three bidders for this contract suggests a moderate level of competition. While more bidders generally lead to better price discovery and potentially lower costs for taxpayers, three offers indicate that the market for these specialized remediation services is not entirely limited. This level of competition likely pressured bidders to offer competitive pricing and technical solutions to secure the award. However, it's crucial to understand if these three bidders represented the full spectrum of capable firms or if barriers to entry (e.g., high bonding requirements, specialized expertise) limited participation. A thorough analysis would compare the awarded price against independent cost estimates or benchmarks for similar projects to ascertain the true value realized by taxpayers.
What is the significance of the 'Interim End State' designation for this contract?
The 'Interim End State' designation for the West Valley Demonstration Project signifies a specific, achievable goal for the site's remediation within the contract's timeframe, rather than a complete final closure. This implies that while significant cleanup and stabilization activities will be undertaken, some residual contamination or long-term monitoring may remain. This approach allows for progress on critical remediation tasks while managing the immense complexity and cost of full site closure. It suggests a phased strategy where this contract addresses a defined set of objectives, potentially paving the way for future contracts to achieve final remediation or long-term stewardship.
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
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: DERP3006CC30000
Offers Received: 3
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Parent Company: AECOM (UEI: 153561212)
Address: 106 NEWBERRY ST, SW, AIKEN, SC, 29801
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $342,657,846
Exercised Options: $342,657,846
Current Obligation: $319,940,763
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Timeline
Start Date: 2007-06-29
Current End Date: 2016-05-23
Potential End Date: 2016-05-23 00:00:00
Last Modified: 2021-09-20
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