EPA awards $383M Remedial Action Contract to CH2M HILL, INC for environmental cleanup services

Contract Overview

Contract Amount: $383,264,361 ($383.3M)

Contractor: CH2M Hill, Inc

Awarding Agency: Environmental Protection Agency

Start Date: 2006-03-15

End Date: 2021-03-14

Contract Duration: 5,478 days

Daily Burn Rate: $70.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: REMEDIAL ACTION CONTRACT 2

Place of Performance

Location: MILWAUKEE, MILWAUKEE County, WISCONSIN, 53214

State: Wisconsin Government Spending

Plain-Language Summary

Environmental Protection Agency obligated $383.3 million to CH2M HILL, INC for work described as: REMEDIAL ACTION CONTRACT 2 Key points: 1. Contract value of $383.3 million over 15 years suggests significant long-term environmental remediation needs. 2. The contract was awarded through full and open competition, indicating a robust bidding process. 3. The use of a Cost Plus Fixed Fee (CPFF) pricing structure requires careful monitoring to ensure cost control. 4. The duration of the contract (15 years) points to the complexity and scale of the environmental challenges addressed. 5. The North American Industry Classification System (NAICS) code 562910 signifies a focus on remediation and waste management services. 6. The contract's primary focus on Remedial Action suggests a commitment to addressing historical environmental contamination.

Value Assessment

Rating: fair

The contract's total value of $383.3 million over 15 years is substantial, reflecting the long-term nature of environmental remediation. Benchmarking this against similar large-scale EPA cleanup contracts would be necessary for a precise value-for-money assessment. The Cost Plus Fixed Fee (CPFF) structure, while common for complex projects where costs are uncertain, carries inherent risks of cost overruns if not managed diligently. Without specific performance metrics or comparisons to industry standards for remediation efficiency, it's difficult to definitively assess the value.

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 approach is generally expected to foster competitive pricing and encourage innovation. The number of bidders is not specified, but the 'full and open' designation implies a competitive landscape that should, in theory, lead to a fair market price for the services rendered.

Taxpayer Impact: A full and open competition process is beneficial for taxpayers as it increases the likelihood of obtaining services at a competitive price, preventing potential overpayment and encouraging efficiency from the winning contractor.

Public Impact

The primary beneficiaries are communities impacted by environmental contamination, receiving services aimed at restoring affected areas. The contract delivers critical environmental remediation services, likely involving the cleanup of hazardous waste sites. The geographic impact is focused on Wisconsin (WI), as indicated by the 'st' field, suggesting specific sites within the state are being addressed. The contract supports a workforce skilled in environmental engineering, hazardous material handling, and project management.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) pricing can lead to higher costs if contractor efficiencies are not rigorously pursued and monitored.
The long contract duration (15 years) increases the risk of scope creep or evolving environmental regulations impacting project costs and timelines.
Lack of specific performance metrics in the provided data makes it challenging to assess the contractor's efficiency and effectiveness.
The sheer scale of the contract ($383M) necessitates robust oversight to ensure funds are used appropriately and effectively.

Positive Signals

Awarded through full and open competition, suggesting a competitive process that should drive value.
The contract addresses critical environmental remediation needs, contributing to public health and safety.
The long-term nature of the contract allows for sustained focus and expertise on complex environmental challenges.
The contractor, CH2M HILL, INC, is likely a specialized firm with expertise in environmental services.

Sector Analysis

The environmental remediation sector is a significant part of the broader environmental services industry, which includes waste management, consulting, and engineering. This contract falls under remediation services, focusing on cleaning up contaminated sites. The market for such services is driven by regulatory requirements (like EPA mandates) and the need to address legacy pollution. Spending in this sector can be substantial, with large government contracts often awarded for Superfund sites or other major cleanup operations.

Small Business Impact

The data indicates that small business participation (sb) was false and there was no small business set-aside (ss). This suggests the contract was not specifically targeted towards small businesses. While CH2M HILL, INC may engage small businesses as subcontractors, the primary award was not set aside, meaning large businesses were eligible and likely competed for this significant contract.

Oversight & Accountability

Oversight for this contract would primarily fall under the Environmental Protection Agency (EPA). Given the large dollar amount and long duration, robust oversight mechanisms are expected, including regular performance reviews, financial audits, and adherence to the terms of the Cost Plus Fixed Fee agreement. The EPA's Office of Inspector General (OIG) would likely have jurisdiction for investigating any potential fraud, waste, or abuse related to this contract.

Related Government Programs

Superfund Program
RCRA Corrective Action
Brownfields Program
Defense Environmental Remediation
Department of Energy Environmental Cleanup

Risk Flags

Cost Plus Fixed Fee (CPFF) pricing requires diligent oversight to control costs.
Long contract duration (15 years) increases risk of scope changes and evolving regulations.
Potential for contractor performance variability over an extended period.
Need for adaptability to changing environmental regulations and technologies.

Frequently Asked Questions

What is this federal contract paying for?

Environmental Protection Agency awarded $383.3 million to CH2M HILL, INC. REMEDIAL ACTION CONTRACT 2

Who is the contractor on this award?

The obligated recipient is CH2M HILL, INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $383.3 million.

What is the period of performance?

Start: 2006-03-15. End: 2021-03-14.

What is the historical spending trend for similar remedial action contracts awarded by the EPA?

Historical spending on EPA remedial action contracts can vary significantly based on the number and complexity of sites requiring cleanup, as well as available funding appropriations. Large, multi-year contracts like the one awarded to CH2M HILL, INC are typical for addressing Superfund sites or other major environmental contamination issues. Analyzing past EPA budgets and contract awards for remediation services would reveal trends in overall spending, average contract values, and the prevalence of different contract types (e.g., cost-reimbursement vs. fixed-price). For instance, periods of increased regulatory enforcement or the identification of new contaminated sites often correlate with higher spending. Comparing the $383 million value of this 15-year contract to the average duration and total value of similar contracts awarded over the past decade would provide context on whether this represents a typical or outlier investment for the EPA's remediation efforts.

How does the Cost Plus Fixed Fee (CPFF) structure compare to other contract types for environmental remediation, and what are its implications for cost control?

The Cost Plus Fixed Fee (CPFF) contract type is often used for complex projects where the scope of work or costs are difficult to estimate precisely at the outset, such as environmental remediation. In a CPFF contract, the contractor is reimbursed for allowable costs plus a fixed fee, which represents profit. This structure incentivizes the contractor to complete the work efficiently to maximize their profit margin, as the fee is fixed regardless of the final cost. However, it also places a significant burden on the contracting agency (EPA, in this case) to meticulously monitor costs and ensure they are reasonable and allocable to the contract. Compared to fixed-price contracts, CPFF offers more flexibility but potentially higher costs if oversight is weak. Conversely, it differs from cost-plus-incentive-fee (CPIF) contracts, which include provisions for adjusting the fee based on performance against targets. The primary implication for cost control under CPFF is the need for stringent government oversight, detailed cost accounting, and clear performance metrics to prevent cost overruns and ensure value for taxpayer money.

What specific types of environmental remediation services are typically covered under a 'Remedial Action Contract'?

A 'Remedial Action Contract' (RAC) typically encompasses a broad range of services necessary for the cleanup and restoration of contaminated sites, often under programs like the EPA's Superfund. These services can include site investigation and characterization (e.g., soil, water, and air sampling), feasibility studies to determine the best cleanup methods, design of remediation systems (e.g., containment, excavation, treatment technologies), construction and implementation of cleanup actions, long-term monitoring of site conditions post-remediation, and site closure activities. Depending on the specific contract scope, it might also involve managing hazardous waste, operating treatment facilities, and ensuring compliance with environmental regulations. The 'Remedial Action' designation specifically points towards the active cleanup phase, distinguishing it from preliminary investigation or long-term stewardship contracts, though RACs can sometimes encompass elements of both.

What is the track record of CH2M HILL, INC in handling large-scale environmental remediation contracts for government agencies?

CH2M HILL, INC (now part of Jacobs Engineering Group) has a long and extensive history of managing large-scale environmental remediation projects for various government agencies, including the EPA, Department of Defense, and Department of Energy. They have been involved in numerous complex cleanup efforts, including Superfund sites, hazardous waste management, and infrastructure-related environmental services. Their track record generally includes experience with diverse remediation technologies and challenging site conditions. Publicly available information and past performance reviews would offer specific insights into their project execution, cost performance, and adherence to schedules on similar contracts. Evaluating their past performance on contracts of comparable size and complexity is crucial for assessing their capability and reliability in executing the $383 million EPA Remedial Action Contract.

What are the potential risks associated with a 15-year contract duration for environmental remediation services?

A 15-year contract duration for environmental remediation presents several potential risks. Firstly, the long timeframe increases the likelihood of unforeseen site conditions or the discovery of new contaminants, potentially leading to scope changes and cost increases. Secondly, environmental regulations and best practices evolve over time; the contract must be flexible enough to adapt to these changes without significant cost impacts. Thirdly, contractor performance can fluctuate over such an extended period; maintaining consistent quality and efficiency requires ongoing vigilance. Fourthly, economic conditions and funding priorities can shift, potentially impacting the agency's ability to sustain funding for the full contract term. Finally, personnel turnover within the contractor's organization over 15 years could lead to a loss of institutional knowledge and project continuity. Robust contract management, clear change order processes, and regular performance evaluations are essential to mitigate these risks.

How does the geographic focus on Wisconsin (WI) influence the scope and nature of the remediation services provided under this contract?

The geographic focus on Wisconsin (WI) indicates that the environmental remediation services under this contract are specifically targeted at sites within that state. Wisconsin has a history of industrial activity, which can lead to various types of contamination, such as from manufacturing, mining, or agricultural practices. The specific nature of the remediation services will depend on the types of contaminants present and the affected media (soil, groundwater, surface water). For example, remediation needs in Wisconsin might involve addressing legacy industrial pollutants in urban areas, agricultural chemical runoff in rural regions, or contamination from former mining operations. The contract's scope would be tailored to the unique environmental challenges and regulatory landscape of Wisconsin, requiring the contractor to possess knowledge of state-specific environmental laws and conditions in addition to federal requirements.

Industry Classification

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

Product/Service Code: ARCHITECT/ENGINEER SERVICES › ARCH-ENG SVCS - GENERAL

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: ARCHITECT-ENGINEER FAR 6.102

Solicitation ID: PRR50510045

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Jacobs Engineering Group Inc

Address: 9191 S JAMAICA ST, ENGLEWOOD, CO, 80112

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $437,597,526

Exercised Options: $435,144,878

Current Obligation: $383,264,361

Actual Outlays: $-4,362

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Timeline