EnergySolutions awarded $248M for Moab cleanup, facing scrutiny over cost and competition
Contract Overview
Contract Amount: $247,940,171 ($247.9M)
Contractor: Energysolutions, LLC
Awarding Agency: Department of Energy
Start Date: 2007-06-20
End Date: 2012-06-27
Contract Duration: 1,834 days
Daily Burn Rate: $135.2K/day
Competition Type: COMPETITIVE DELIVERY ORDER
Number of Offers Received: 6
Pricing Type: COST PLUS AWARD FEE
Sector: Other
Official Description: REMEDIATION OF MOAB CLEAN UP SITE IN MOAB, UTAH
Place of Performance
Location: MOAB, GRAND County, UTAH, 84532
State: Utah Government Spending
Plain-Language Summary
Department of Energy obligated $247.9 million to ENERGYSOLUTIONS, LLC for work described as: REMEDIATION OF MOAB CLEAN UP SITE IN MOAB, UTAH Key points: 1. The contract's cost-plus award fee structure may incentivize higher spending. 2. Limited competition raises concerns about price discovery and potential overpayment. 3. The long duration and significant value indicate a high-impact project. 4. Performance context is crucial given the environmental remediation nature of the work. 5. This contract positions Energysolutions as a key player in federal environmental services.
Value Assessment
Rating: questionable
The total award of $247.9 million over five years for the Moab cleanup site is substantial. While specific benchmarks for this type of complex environmental remediation are difficult to pinpoint without detailed scope comparisons, the cost-plus award fee (CPAF) contract type can sometimes lead to higher costs compared to fixed-price contracts if not managed tightly. The initial contract value and subsequent modifications should be reviewed against performance metrics to assess true value for money. Without comparable contracts for similar-scale nuclear waste remediation, a definitive value assessment is challenging, but the significant expenditure warrants careful oversight.
Cost Per Unit: N/A
Competition Analysis
Competition Level: unknown
This contract was awarded as a competitive delivery order, suggesting that multiple vendors were considered. However, the number of bidders (6) for a contract of this magnitude and complexity is moderate. While competition existed, the specific details of the bidding process, including the number of proposals received and the evaluation criteria, are needed to fully assess its effectiveness. A moderate level of competition can still lead to price discovery, but a more robust competition with a higher number of qualified bidders might have yielded better pricing.
Taxpayer Impact: The competitive nature, even if moderate, suggests that taxpayers benefited from some level of price negotiation. However, the potential for cost overruns inherent in the CPAF structure means that taxpayer funds could still be stretched if not meticulously managed.
Public Impact
The primary beneficiaries are the U.S. Department of Energy and the state of Utah, receiving services to remediate a significant environmental hazard. The contract delivers critical environmental remediation services, addressing legacy radioactive and chemical waste. The geographic impact is concentrated in Moab, Utah, with potential downstream effects on local communities and ecosystems. Workforce implications include the creation of specialized jobs in environmental cleanup and project management within the region.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost-plus award fee structure may incentivize increased costs.
- Moderate competition level could limit optimal price discovery.
- Long contract duration increases exposure to potential cost escalations.
- Complexity of environmental remediation presents inherent performance risks.
Positive Signals
- Awarded through a competitive process, indicating some market vetting.
- Significant federal investment signals commitment to environmental cleanup.
- Contractor has a track record in handling large-scale remediation projects.
Sector Analysis
The environmental remediation sector is a critical component of the federal contracting landscape, particularly for agencies like the Department of Energy dealing with legacy waste sites. This contract falls within the broader industrial services and waste management market. Comparable spending benchmarks are difficult to establish due to the unique nature of nuclear and chemical waste cleanup, but large-scale remediation projects often run into hundreds of millions of dollars. This contract represents a significant portion of federal spending dedicated to addressing long-term environmental liabilities.
Small Business Impact
The data indicates that this contract was not specifically set aside for small businesses (ss: false, sb: false). Therefore, the primary contractor, Energysolutions, LLC, is likely a large business. While there is no direct information on subcontracting plans, large federal contracts of this nature often involve significant subcontracting opportunities. It is important to assess whether Energysolutions has a robust plan to engage small businesses as subcontractors to ensure broader economic impact and compliance with federal subcontracting goals.
Oversight & Accountability
Oversight for this contract would primarily fall under the Department of Energy's contracting officers and potentially its Office of Inspector General. The CPAF structure necessitates rigorous performance monitoring and auditing to ensure that award fees are justified and that costs are reasonable. Transparency would be enhanced by public reporting of performance metrics, cost breakdowns, and any audit findings related to the contract's execution.
Related Government Programs
- Department of Energy Uranium Mill Tailings Remedial Action (UMTRA) Program
- Environmental Services Contracts
- Hazardous Waste Management
- Superfund Site Cleanups
Risk Flags
- Cost-plus award fee structure
- Moderate competition level
- Environmental remediation complexity
- Long contract duration
Tags
environmental-remediation, department-of-energy, utah, competitive-delivery-order, large-contract, cost-plus-award-fee, hazardous-waste, radioactive-waste, energysolutions-llc, federal-spending
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $247.9 million to ENERGYSOLUTIONS, LLC. REMEDIATION OF MOAB CLEAN UP SITE IN MOAB, UTAH
Who is the contractor on this award?
The obligated recipient is ENERGYSOLUTIONS, LLC.
Which agency awarded this contract?
Awarding agency: Department of Energy (Department of Energy).
What is the total obligated amount?
The obligated amount is $247.9 million.
What is the period of performance?
Start: 2007-06-20. End: 2012-06-27.
What is Energysolutions, LLC's track record with similar large-scale environmental remediation contracts for the Department of Energy?
Energysolutions, LLC has a significant history of working with the Department of Energy (DOE) on various environmental remediation projects. They have been involved in managing and cleaning up complex sites, including those with radioactive and hazardous waste. For instance, they have held contracts related to the cleanup of former uranium mill sites and the management of transuranic waste. Their experience often involves large-scale operations, long project durations, and adherence to stringent safety and environmental regulations. Assessing their performance on past DOE contracts, including any cost overruns, schedule delays, or safety incidents, provides crucial context for evaluating their capability and reliability on the Moab cleanup contract. Publicly available contract data and inspector general reports can offer insights into their past performance.
How does the cost-plus award fee (CPAF) structure compare to other contract types for environmental remediation, and what are the implications for value?
The Cost-Plus Award Fee (CPAF) contract type is often used for complex projects where the scope is not fully defined at the outset, or where performance incentives are critical. In CPAF, the contractor is reimbursed for allowable costs plus a fee that is composed of a base amount and an award amount. The award amount is determined by the government based on the contractor's performance against pre-defined criteria. Compared to fixed-price contracts, CPAF generally offers less cost certainty for the government, as costs can fluctuate. However, it can incentivize higher performance and quality by linking a portion of the fee to achieving specific objectives. For environmental remediation, where unforeseen conditions are common, CPAF can provide flexibility. The key to ensuring value lies in the government's ability to establish clear, measurable performance metrics and to diligently administer the award fee portion, ensuring that bonuses are only paid for exceptional performance, thereby mitigating the risk of inflated costs.
What are the specific risks associated with the environmental remediation of the Moab site, and how are they being managed under this contract?
The Moab site cleanup involves significant risks inherent in handling large volumes of radioactive and chemically contaminated mill tailings. Key risks include potential environmental contamination (groundwater, soil, air), worker safety hazards (radiation exposure, chemical exposure), and the logistical challenges of safely transporting and disposing of millions of tons of waste. Under this contract, risks are managed through a combination of the CPAF structure, which theoretically incentivizes safe and efficient operations to earn award fees, and specific contract clauses addressing safety protocols, environmental monitoring, and waste management procedures. The Department of Energy's oversight, including regular inspections, performance reviews, and adherence to regulatory requirements, is critical. The contractor's technical expertise and established safety management systems are also primary risk mitigation tools. However, the sheer scale and complexity mean that unforeseen issues could still arise, requiring adaptive management strategies.
What has been the historical spending trend for the Moab cleanup project prior to and during this contract period?
The Moab Uranium Mill Tailings Remedial Action (UMTRA) project has a long history, with significant federal investment predating this specific Energysolutions contract. The site contains millions of tons of tailings from former uranium ore processing. Initial cleanup efforts and site characterization began decades ago. This particular contract, awarded in 2007 and ending in 2012, represents a substantial phase of the ongoing remediation. Historical spending data would show cumulative expenditures over many years, reflecting the phased approach to managing and relocating the tailings. Analyzing spending patterns before, during, and after this contract period can reveal the pace of cleanup, the effectiveness of different management strategies, and the overall cost trajectory of the project. Fluctuations in annual spending could be linked to funding appropriations, project milestones, and the specific tasks being undertaken at different times.
How many bidders participated in the competition for this contract, and what does this level of competition imply for taxpayer value?
This contract was awarded as a competitive delivery order with six bidders participating. While six bidders represent a degree of competition, the optimal level for ensuring maximum price discovery and value can vary depending on the complexity and size of the contract. For a multi-million dollar environmental remediation project, six bidders suggest a moderately competitive market. This level likely allowed for some price comparison and negotiation, potentially leading to a more reasonable outcome than a sole-source award. However, a larger pool of highly qualified bidders might have driven prices down further or spurred more innovative solutions. The implication for taxpayers is that while some competitive pressure existed, the potential for achieving the absolute best value might have been constrained if the market could support more robust bidding activity or if the evaluation criteria heavily favored specific technical approaches over price.
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: COMPETITIVE DELIVERY ORDER
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: DERT3006CC00014
Offers Received: 6
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Parent Company: Energysolutions, Inc. (UEI: 808265917)
Address: 299 SOUTH MAIN ST STE 1700, SALT LAKE CITY, UT, 84111
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $251,481,709
Exercised Options: $251,481,709
Current Obligation: $247,940,171
Actual Outlays: $356,694
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Parent Contract
Parent Award PIID: DEAM0905SR22406
IDV Type: IDC
Timeline
Start Date: 2007-06-20
Current End Date: 2012-06-27
Potential End Date: 2020-04-01 00:00:00
Last Modified: 2021-08-24
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