EPA's $81.5M Response Engineering Contract Awarded to Lockheed Martin Under Full and Open Competition

Contract Overview

Contract Amount: $81,520,029 ($81.5M)

Contractor: Lockheed Martin International

Awarding Agency: Environmental Protection Agency

Start Date: 2004-06-01

End Date: 2013-02-08

Contract Duration: 3,174 days

Daily Burn Rate: $25.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS AWARD FEE

Sector: Other

Official Description: RESPONSE ENGINEERING AND ANALYTICAL CONTRACT

Place of Performance

Location: EDISON, MIDDLESEX County, NEW JERSEY, 08817

State: New Jersey Government Spending

Plain-Language Summary

Environmental Protection Agency obligated $81.5 million to LOCKHEED MARTIN INTERNATIONAL for work described as: RESPONSE ENGINEERING AND ANALYTICAL CONTRACT Key points: 1. The contract value of $81.5 million over its duration indicates a significant investment in environmental response engineering. 2. Lockheed Martin, a major defense contractor, secured this award, suggesting strong capabilities but potentially limited competition in specialized areas. 3. The 'Cost Plus Award Fee' structure introduces performance incentives but also carries inherent cost escalation risks. 4. The Facilities Support Services sector is critical for environmental management, with this contract addressing key operational needs for the EPA.

Value Assessment

Rating: fair

The contract's Cost Plus Award Fee structure can lead to costs exceeding initial estimates if not managed tightly. Benchmarking against similar large-scale environmental support contracts is difficult without more granular cost data.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which theoretically promotes competitive pricing. However, the specialized nature of response engineering may limit the number of truly capable bidders, potentially impacting price discovery.

Taxpayer Impact: While competition was open, the Cost Plus Award Fee structure necessitates vigilant oversight to ensure taxpayer funds are used efficiently and effectively for the services rendered.

Public Impact

Supports critical environmental response operations for the EPA, ensuring timely and effective mitigation of environmental hazards. The long duration of the contract (over 9 years) suggests a sustained need for these services, impacting long-term agency planning. Potential for technological advancements and innovation in environmental engineering driven by the award fee incentives.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Award Fee structure can lead to cost overruns.
Long contract duration may not reflect evolving needs or technological advancements.
Limited visibility into specific performance metrics and award fee allocations.

Positive Signals

Awarded under full and open competition, promoting a broad search for qualified contractors.
Contractor is a well-established entity with significant experience in complex engineering projects.
Focus on critical environmental response services aligns with EPA's core mission.

Sector Analysis

This contract falls within the Facilities Support Services sector, specifically addressing complex environmental response engineering. Spending in this area is crucial for regulatory compliance and public safety, with benchmarks varying widely based on project scope and environmental conditions.

Small Business Impact

The data indicates this contract was not awarded to small businesses (ss: false, sb: false). Larger, established firms like Lockheed Martin typically dominate in specialized engineering services due to required expertise and bonding capacity.

Oversight & Accountability

The contract's long duration and Cost Plus Award Fee structure necessitate robust oversight from the EPA to ensure performance standards are met and costs remain justified. Regular audits and performance reviews are critical for accountability.

Related Government Programs

Facilities Support Services
Environmental Protection Agency Contracting
Environmental Protection Agency Programs

Risk Flags

Cost Overrun Risk (CPAF)
Contractor Lock-in (Long Duration)
Limited Small Business Participation
Potential for Undefined Scope Creep
Performance Measurement Challenges

Frequently Asked Questions

What is this federal contract paying for?

Environmental Protection Agency awarded $81.5 million to LOCKHEED MARTIN INTERNATIONAL. RESPONSE ENGINEERING AND ANALYTICAL CONTRACT

Who is the contractor on this award?

The obligated recipient is LOCKHEED MARTIN INTERNATIONAL.

Which agency awarded this contract?

Awarding agency: Environmental Protection Agency (Environmental Protection Agency).

What is the total obligated amount?

The obligated amount is $81.5 million.

What is the period of performance?

Start: 2004-06-01. End: 2013-02-08.

What specific environmental response engineering tasks are covered under this contract, and how do they align with the EPA's current priorities?

The contract covers a broad range of response engineering and analytical services. While specific tasks aren't detailed here, they likely include planning, design, and implementation of solutions for environmental incidents, hazardous material containment, and site remediation. Alignment with EPA priorities would depend on current environmental challenges, such as emerging contaminants or disaster response needs.

How effectively did the full and open competition process ensure competitive pricing for these specialized services, given the potential for a limited bidder pool?

While 'full and open' competition suggests a broad solicitation, the specialized nature of response engineering may mean only a few firms possess the requisite technical expertise and capacity. The effectiveness of price discovery hinges on the number of truly competitive bids received and the government's negotiation strategy. Without bid data, it's hard to definitively assess price competitiveness.

What are the primary risks associated with the Cost Plus Award Fee (CPAF) structure in this contract, and what mitigation strategies are in place?

The primary risk of CPAF is potential cost escalation, as the contractor is reimbursed for allowable costs plus a fee that is a percentage of the target cost, with potential for award based on performance. Mitigation strategies typically involve stringent cost controls, clear performance metrics tied to the award fee, and regular audits by the contracting officer to ensure costs are reasonable and allocable.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Facilities Support Services › Facilities Support Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation ID: PRCI0310595

Offers Received: 3

Pricing Type: COST PLUS AWARD FEE (R)

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

Address: 2339 ROUTE 70 WEST, FLOOR 3W, CHERRY HILL, NJ, 01

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $143,097,386

Exercised Options: $89,250,417

Current Obligation: $81,520,029

Timeline