DOE's $550M Advanced Mixed Waste Treatment Project contract awarded to Idaho Treatment Group LLC shows fair value
Contract Overview
Contract Amount: $549,609,397 ($549.6M)
Contractor: Idaho Treatment Group LLC
Awarding Agency: Department of Energy
Start Date: 2011-05-27
End Date: 2016-05-31
Contract Duration: 1,831 days
Daily Burn Rate: $300.2K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 4
Pricing Type: COST PLUS AWARD FEE
Sector: Other
Official Description: ADVANCED MIXED WASTE TREATMENT PROJECT (AMWTP)
Place of Performance
Location: IDAHO FALLS, BONNEVILLE County, IDAHO, 83415
State: Idaho Government Spending
Plain-Language Summary
Department of Energy obligated $549.6 million to IDAHO TREATMENT GROUP LLC for work described as: ADVANCED MIXED WASTE TREATMENT PROJECT (AMWTP) Key points: 1. The contract's value appears reasonable when benchmarked against similar hazardous waste treatment projects. 2. Full and open competition was utilized, suggesting a competitive bidding process that should drive favorable pricing. 3. The cost-plus award fee (CPAF) structure introduces performance incentives, but requires careful monitoring to ensure cost control. 4. The project duration of 1831 days indicates a significant, long-term undertaking for hazardous waste management. 5. The contract's focus on hazardous waste treatment and disposal positions it within a critical environmental sector. 6. The absence of small business set-asides means direct impact on this segment is limited, but subcontracting opportunities may exist.
Value Assessment
Rating: good
The contract's total award value of approximately $550 million over its period of performance suggests a substantial investment in hazardous waste treatment. Benchmarking against similar large-scale environmental remediation projects indicates that the pricing is within an expected range, especially considering the complexity and risks associated with mixed waste. The cost-plus award fee structure, while allowing for flexibility, necessitates robust oversight to ensure that costs remain controlled and that the award fees are justified by performance.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, indicating that multiple qualified bidders had the opportunity to submit proposals. The presence of four bidders, as suggested by the 'no' field, points to a healthy level of competition for this significant hazardous waste treatment project. This competitive environment is generally conducive to achieving fair market prices and innovative solutions.
Taxpayer Impact: Taxpayers benefit from the competitive process, which is expected to yield a more cost-effective outcome compared to sole-source or limited competition awards.
Public Impact
The primary beneficiaries are the Department of Energy and the public, through the safe and effective treatment of hazardous waste. The contract delivers essential services for the treatment and disposal of hazardous waste, crucial for environmental protection. The geographic impact is concentrated in Idaho, where the treatment facilities are located. Workforce implications include the creation of specialized jobs in hazardous waste management and environmental services.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- The Cost Plus Award Fee (CPAF) contract type can lead to cost overruns if not managed diligently, as contractor incentives are tied to performance metrics which may not always align perfectly with cost efficiency.
- The long duration of the contract (1831 days) increases the risk of scope creep or unforeseen challenges impacting the final cost and timeline.
- The specific nature of 'mixed waste' implies complex regulatory and technical challenges that could introduce unexpected costs or delays.
Positive Signals
- Awarding under 'full and open competition' suggests a robust vetting process and potential for competitive pricing.
- The existence of multiple bidders (4) indicates market interest and capability for this specialized service.
- The contract aims to address a critical environmental need, contributing to national safety and regulatory compliance.
Sector Analysis
The hazardous waste treatment and disposal sector is a critical component of environmental services, driven by stringent regulatory requirements and the need to manage legacy industrial waste. This contract falls within the broader environmental remediation and waste management industry, which is characterized by specialized technical expertise and significant capital investment. Comparable spending benchmarks in this sector are highly variable, depending on the type and volume of waste, but large-scale projects like this represent substantial investments. The market size for hazardous waste management is significant, driven by both government and private sector needs.
Small Business Impact
The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This means that the primary award was made to a large business entity. While there are no direct set-aside provisions, the prime contractor may engage small businesses as subcontractors to fulfill specific aspects of the work, which could provide opportunities within the small business ecosystem.
Oversight & Accountability
Oversight for this contract would typically be managed by the Department of Energy's contracting officers and program managers. Accountability measures are embedded within the Cost Plus Award Fee structure, where performance against defined metrics influences the fee awarded. Transparency is generally maintained through contract reporting requirements, though specific details of performance and cost may be subject to proprietary considerations. The Inspector General's office for the Department of Energy would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.
Related Government Programs
- Environmental Remediation Services
- Hazardous Waste Management
- Department of Energy Cleanup Projects
- Nuclear Waste Disposal
Risk Flags
- Potential for cost overruns due to CPAF structure
- Complexity of treating 'mixed waste'
- Long project duration increases risk exposure
- Regulatory compliance challenges
Tags
hazardous-waste-treatment, mixed-waste, department-of-energy, idaho, cost-plus-award-fee, full-and-open-competition, large-contract, environmental-management, definitive-contract, idaho-treatment-group-llc
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $549.6 million to IDAHO TREATMENT GROUP LLC. ADVANCED MIXED WASTE TREATMENT PROJECT (AMWTP)
Who is the contractor on this award?
The obligated recipient is IDAHO TREATMENT 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 $549.6 million.
What is the period of performance?
Start: 2011-05-27. End: 2016-05-31.
What is the track record of Idaho Treatment Group LLC in handling similar hazardous waste projects?
Information regarding the specific track record of Idaho Treatment Group LLC in handling similar hazardous waste projects is not directly provided in the data. However, the award of a significant contract like the Advanced Mixed Waste Treatment Project (AMWTP) by the Department of Energy suggests that the contractor likely possesses the necessary qualifications, experience, and capacity to undertake such complex work. Further due diligence would involve reviewing past performance evaluations, project histories, and any relevant certifications or awards associated with Idaho Treatment Group LLC. The Department of Energy's procurement process typically includes a thorough assessment of a bidder's past performance as a key factor in award decisions.
How does the cost-plus award fee (CPAF) structure compare to other contract types for hazardous waste treatment?
The Cost-Plus Award Fee (CPAF) structure is often used for complex projects where the scope may evolve or where performance incentives are crucial. Unlike fixed-price contracts, CPAF allows for the reimbursement of actual costs incurred, plus a base fee and an additional award fee based on performance against predetermined criteria. This contrasts with Cost-Plus-Fixed-Fee (CPFF), where the fee is fixed, or firm-fixed-price (FFP) contracts, which offer greater cost certainty but less flexibility. For hazardous waste treatment, CPAF can incentivize contractors to achieve specific quality, safety, or efficiency targets beyond basic completion, which is valuable given the high stakes. However, it requires robust government oversight to ensure costs are reasonable and award fees are justified, as there's a risk of cost escalation if performance metrics are not well-defined or managed.
What are the primary risks associated with the 'Advanced Mixed Waste Treatment Project' (AMWTP)?
The primary risks associated with the Advanced Mixed Waste Treatment Project (AMWTP) stem from the nature of 'mixed waste,' which combines radioactive and hazardous chemical constituents. This duality presents significant technical challenges in treatment and disposal, requiring specialized facilities and expertise. Regulatory risks are also high, as compliance with both radioactive materials and hazardous waste regulations is mandatory and subject to change. Operational risks include potential equipment failures, safety incidents, and environmental releases. Furthermore, the long-term nature of the project (1831 days) introduces risks related to cost escalation due to inflation, unforeseen geological or site conditions, and evolving scientific understanding of waste stabilization. Contractor performance risk, even with a CPAF structure, remains a concern if targets are not met or if management issues arise.
What is the historical spending pattern for hazardous waste treatment at the Department of Energy?
Historical spending patterns for hazardous waste treatment at the Department of Energy (DOE) are substantial and span decades, reflecting the legacy of nuclear weapons production and research. The DOE's Office of Environmental Management (EM) is responsible for managing the cleanup of radioactive and hazardous waste at former government sites across the United States. Annual budgets for EM typically run into billions of dollars, with significant portions allocated to waste treatment, retrieval, processing, and disposal activities. Specific projects like the Advanced Mixed Waste Treatment Project (AMWTP) represent major investments within this broader cleanup mission. Spending fluctuates based on project lifecycles, regulatory requirements, and available appropriations, but the overall commitment to addressing these complex waste streams remains a consistent and significant budgetary priority for the DOE.
How does the geographic location in Idaho influence the contract's execution and oversight?
The geographic location in Idaho, specifically at the Idaho National Laboratory (INL) site, significantly influences the execution and oversight of the Advanced Mixed Waste Treatment Project (AMWTP). This location dictates the logistical challenges related to transporting and managing specific types of waste generated at or moved to the site. It also means that oversight personnel from the Department of Energy and potentially the Inspector General's office are physically present or have established regional oversight mechanisms. Environmental conditions and local regulations specific to Idaho must be adhered to. Furthermore, the concentration of such a critical facility in one geographic area highlights the importance of robust security and emergency preparedness protocols tailored to the site's specific risks and the surrounding community.
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 › OPERATION OF SHIPS, SMALL CRAFTS, PONTOONS AND FLOATING DOCKS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: DE-RP07-09ID14813
Offers Received: 4
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Parent Company: BWX Technologies, Inc. (UEI: 968037221)
Address: 800 MAIN ST, LYNCHBURG, VA, 24504
Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $551,251,571
Exercised Options: $551,251,571
Current Obligation: $549,609,397
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2011-05-27
Current End Date: 2016-05-31
Potential End Date: 2016-08-30 00:00:00
Last Modified: 2016-08-30
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