Department of Energy's $78.9M contract with Centerra Group, LLC for consulting services awarded under full and open competition
Contract Overview
Contract Amount: $78,921,650 ($78.9M)
Contractor: Centerra Group, LLC
Awarding Agency: Department of Energy
Start Date: 2003-08-15
End Date: 2009-10-31
Contract Duration: 2,269 days
Daily Burn Rate: $34.8K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: COST PLUS AWARD FEE
Sector: Other
Place of Performance
Location: ALBUQUERQUE, BERNALILLO County, NEW MEXICO, 87185
Plain-Language Summary
Department of Energy obligated $78.9 million to CENTERRA GROUP, LLC for work described as: Key points: 1. The contract value represents a significant investment in specialized consulting services. 2. Full and open competition suggests a robust bidding process, potentially leading to better pricing. 3. The duration of the contract (2269 days) indicates a long-term need for these services. 4. The cost-plus award fee structure incentivizes performance but requires careful oversight. 5. The North American Industry Classification System (NAICS) code 541690 points to a focus on technical consulting. 6. Awarded to a single entity, Centerra Group, LLC, highlighting their specialized capabilities. 7. The contract was issued as a delivery order, suggesting it's part of a larger framework agreement.
Value Assessment
Rating: fair
Benchmarking the value of this contract is challenging without specific performance metrics or comparable contract data. The cost-plus award fee structure can lead to costs exceeding initial estimates if not managed tightly. However, the award fee component aims to ensure value by rewarding performance, suggesting an intent to achieve good outcomes. The total award amount of $78.9 million over approximately six years indicates a substantial commitment, and its reasonableness depends heavily on the scope and criticality of the consulting services provided.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under 'full and open competition,' indicating that all responsible sources were permitted to submit a bid. This typically involves a formal solicitation process where multiple companies can compete for the work. The number of bidders is not specified, but the 'full and open' designation suggests a competitive environment that should theoretically drive down prices and improve service quality through market forces.
Taxpayer Impact: A full and open competition generally 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 likely the Department of Energy's various programs requiring specialized technical consulting. Services delivered under this contract support the agency's operational and strategic objectives. The geographic impact is primarily centered around the Department of Energy's operations, with potential implications for New Mexico where the award was noted. Workforce implications may include the direct employment of consultants by Centerra Group, LLC and potential indirect impacts on DOE staff managing the contract.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost-plus award fee contracts can lead to cost overruns if performance incentives are not carefully structured and monitored.
- The long contract duration necessitates ongoing vigilance to ensure continued relevance and value.
- Lack of specific performance metrics makes it difficult to assess the true value-for-money achieved.
- Potential for scope creep over the contract's extended period.
- Reliance on a single contractor for a significant duration may limit future flexibility.
Positive Signals
- Awarded through full and open competition, suggesting a competitive process that should yield fair pricing.
- The award fee structure incentivizes contractor performance and alignment with agency goals.
- The contractor, Centerra Group, LLC, has been awarded a significant contract, indicating a level of trust and capability.
- The contract duration suggests a stable, long-term partnership for critical services.
- The specific NAICS code indicates specialized expertise is being procured.
Sector Analysis
The contract falls within the professional, scientific, and technical services sector, specifically 'Other Scientific and Technical Consulting Services' (NAICS 541690). This sector is crucial for government agencies requiring specialized expertise that may not be available in-house. The market for such services is competitive, with numerous firms offering a wide range of technical and management consulting. The Department of Energy, like many large federal agencies, frequently procures these services to support complex missions in areas such as energy research, nuclear security, and environmental management. Benchmarks for comparable spending would depend on the specific nature of the consulting provided, but overall federal spending on professional services is in the tens of billions annually.
Small Business Impact
The data indicates this contract was awarded under 'full and open competition' and does not specify any small business set-aside provisions (ss: false, sb: false). This suggests that small businesses were eligible to compete, but the contract was not specifically reserved for them. There is no direct information on subcontracting plans for small businesses. Without specific set-aside goals or reporting on subcontracting, the direct impact on the small business ecosystem is unclear, though they may have participated as subcontractors if required by the prime contractor.
Oversight & Accountability
Oversight for this contract would primarily reside with the Department of Energy's contracting officers and program managers. The 'cost-plus award fee' (pt: COST PLUS AWARD FEE) structure necessitates robust performance monitoring to ensure the contractor meets objectives and earns the award fee. Transparency is generally facilitated through contract award databases, but detailed performance reports and audits are typically internal or subject to specific Freedom of Information Act (FOIA) requests. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.
Related Government Programs
- Department of Energy - General Services
- Scientific and Technical Consulting Services
- Federal Consulting Contracts
- Cost-Plus Contracts
- Long-Term Service Agreements
Risk Flags
- Cost-Plus Award Fee (CPAF) structure requires diligent oversight to prevent cost overruns.
- Long contract duration necessitates continuous monitoring for relevance and value.
- Lack of specific performance data makes independent value assessment difficult.
- Potential for scope creep over the contract's extended period.
Tags
department-of-energy, consulting-services, scientific-and-technical-services, cost-plus-award-fee, full-and-open-competition, delivery-order, long-term-contract, federal-contract, centerra-group-llc, new-mexico, naics-541690
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $78.9 million to CENTERRA GROUP, LLC. See the official description on USAspending.
Who is the contractor on this award?
The obligated recipient is CENTERRA GROUP, LLC.
Which agency awarded this contract?
Awarding agency: Department of Energy (Department of Energy).
What is the total obligated amount?
The obligated amount is $78.9 million.
What is the period of performance?
Start: 2003-08-15. End: 2009-10-31.
What is the track record of Centerra Group, LLC with the Department of Energy and similar federal agencies?
Centerra Group, LLC has a significant history of contracting with federal agencies, particularly in areas related to security, environmental management, and technical services. For the Department of Energy, they have been involved in managing complex sites and providing specialized support. Their track record often includes large-scale operations, such as managing government-owned, contractor-operated facilities. While specific performance details for individual contracts are not always publicly available, their continued awards suggest a generally satisfactory performance history. However, a deeper dive into past performance reviews, any contract disputes, or awards/penalties would be necessary for a comprehensive assessment. Their experience with similar federal contracts indicates a familiarity with government procurement processes and regulatory environments.
How does the total contract value of $78.9 million compare to similar consulting services procured by the Department of Energy?
The $78.9 million contract value is substantial and falls within the range of major service contracts procured by large federal agencies like the Department of Energy. To benchmark this value effectively, one would need to compare it against contracts for 'Other Scientific and Technical Consulting Services' (NAICS 541690) with similar durations (2269 days, approx. 6.2 years) and scopes of work. The Department of Energy often awards multi-year, high-value contracts for mission-critical support. Without knowing the specific technical or scientific domains covered by this contract, a precise comparison is difficult. However, considering the agency's complex operations, this value suggests a significant and long-term requirement for specialized expertise, likely in areas such as research support, technical analysis, or program management.
What are the primary risks associated with a Cost Plus Award Fee (CPAF) contract of this magnitude and duration?
The primary risks associated with a CPAF contract of this magnitude ($78.9M) and duration (2269 days) revolve around cost control and performance alignment. For the government, the risk is that costs could escalate beyond initial projections if the 'cost plus' component is not tightly managed, and the 'award fee' might be awarded too liberally, diminishing the incentive for true cost savings. Contractor risk includes the uncertainty of earning the award fee, which is tied to performance metrics that must be clearly defined and objectively measured. Over-promising or under-delivering on performance targets can lead to reduced profits. Both parties face the risk of scope creep over the long duration, potentially leading to disputes over contract modifications and additional costs. Effective oversight and clearly defined performance standards are crucial to mitigate these risks.
How effective is 'full and open competition' in ensuring value for money for specialized consulting services like these?
Full and open competition is generally considered the most effective method for ensuring value for money, as it allows the widest possible pool of qualified contractors to bid, fostering a competitive environment that drives down prices and encourages innovation. For specialized consulting services, this means that the Department of Energy likely received proposals from multiple firms, allowing them to compare technical approaches, past performance, and pricing. The success in achieving value depends on the clarity of the solicitation's requirements and the evaluation criteria used. If the competition is robust (i.e., multiple strong bidders), it significantly increases the likelihood of securing services at a fair market price. However, the complexity of specialized services can sometimes make direct price comparisons difficult, requiring a strong technical evaluation component alongside the cost analysis.
What are the implications of awarding a delivery order under a potentially larger contract vehicle?
A delivery order (aw: DELIVERY ORDER) typically signifies that this specific award is one of potentially many under a broader, pre-existing contract or agreement, often referred to as an 'Indefinite Delivery/Indefinite Quantity' (IDIQ) contract or a 'Master Agreement'. The implications are that the basic terms, conditions, and pricing structures have likely already been negotiated and established. This speeds up the procurement process for individual task orders like this one. It also suggests that the Department of Energy has established a relationship or framework with one or more contractors to fulfill ongoing or recurring needs. For the contractor, it provides a stream of potential work, while for the agency, it offers flexibility and potentially pre-negotiated favorable rates, assuming the underlying contract vehicle itself was competitively awarded.
How does the NAICS code 541690 ('Other Scientific and Technical Consulting Services') inform our understanding of the contract's purpose?
The NAICS code 541690 provides a specific classification for the type of consulting services procured. 'Other Scientific and Technical Consulting Services' is a broad category that encompasses a wide range of expert advice and assistance related to scientific or technical fields, excluding specific subcategories like engineering, environmental, or computer systems design. This suggests the contract likely involves highly specialized knowledge, analysis, or problem-solving in areas that support the Department of Energy's core mission, which could include areas like advanced materials, energy policy analysis, nuclear science, or research program strategy. It indicates the government is seeking external expertise for complex technical challenges or strategic planning where internal capabilities may be insufficient or require augmentation.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Other Scientific and Technical Consulting Services
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Offers Received: 1
Pricing Type: COST PLUS AWARD FEE (R)
Contractor Details
Parent Company: Constellis Holdings, LLC (UEI: 966133477)
Address: 7121 FAIRWAY DR STE 301, PALM BEACH GARDENS, FL, 33418
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $78,921,650
Exercised Options: $78,921,650
Current Obligation: $78,921,650
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Parent Contract
Parent Award PIID: DEAM0403AL67577
IDV Type: IDC
Timeline
Start Date: 2003-08-15
Current End Date: 2009-10-31
Potential End Date: 2009-10-31 00:00:00
Last Modified: 2017-11-14
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