EPA's $9M contract for economic and risk analysis services awarded to Industrial Economics Inc. shows long duration

Contract Overview

Contract Amount: $9,002,604 ($9.0M)

Contractor: Industrial Economics Inc

Awarding Agency: Environmental Protection Agency

Start Date: 2012-04-30

End Date: 2021-03-01

Contract Duration: 3,227 days

Daily Burn Rate: $2.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: IGF::CT::IGF CRITICAL FUNCTION - THIS SERVICE CONTRACT IS FOR ECONOMICS AND RISK ANALYSIS STAFF (ERAS) ANALYTICAL SUPPORT (EAS) SERVICES

Place of Performance

Location: CAMBRIDGE, MIDDLESEX County, MASSACHUSETTS, 02140

State: Massachusetts Government Spending

Plain-Language Summary

Environmental Protection Agency obligated $9.0 million to INDUSTRIAL ECONOMICS INC for work described as: IGF::CT::IGF CRITICAL FUNCTION - THIS SERVICE CONTRACT IS FOR ECONOMICS AND RISK ANALYSIS STAFF (ERAS) ANALYTICAL SUPPORT (EAS) SERVICES Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract type is Cost Plus Fixed Fee, which can incentivize cost overruns if not managed carefully. 3. A long contract duration of 3227 days (over 8 years) may indicate a stable, ongoing need for these services. 4. The contract was awarded to a single vendor, Industrial Economics Inc., for the entire period. 5. The North American Industry Classification System (NAICS) code 541620 points to environmental consulting services. 6. The contract's value of $9,000,260.23 over its lifespan averages to approximately $1,080 per day.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific deliverables and performance metrics. However, the total award of approximately $9 million over more than 8 years suggests a consistent, albeit not exceptionally high, annual spend for specialized analytical support. The Cost Plus Fixed Fee (CPFF) contract type carries inherent risks of cost escalation if the fixed fee is not adequately justified by the scope of work and if contractor efficiencies are not monitored. Comparing this to similar contracts for economic and risk analysis would require detailed analysis of the scope of work and deliverables.

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 suggests a robust competitive process was intended. However, the data provided does not specify the number of bids received, which is crucial for assessing the actual level of competition. A high number of bidders typically leads to better price discovery and potentially lower costs for the government.

Taxpayer Impact: A full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down prices and improve the quality of services offered.

Public Impact

The Environmental Protection Agency (EPA) benefits from specialized analytical support for its economic and risk analysis functions. The services delivered likely inform policy decisions, regulatory impact assessments, and risk management strategies within the EPA. The geographic impact is national, as EPA's work affects environmental policies and regulations across the United States. The contract supports a workforce of analysts and economists, contributing to specialized expertise within the federal government and potentially the contractor's organization.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The Cost Plus Fixed Fee (CPFF) contract type can lead to cost overruns if not closely monitored, as contractor incentives may not always align with government cost-saving goals.
A long contract duration without clear performance milestones could potentially lead to complacency or reduced efficiency over time.
Lack of specific performance metrics in the provided data makes it difficult to assess the true value and effectiveness of the services rendered.
The contract was awarded to a single entity for its entire duration, raising questions about whether periodic re-competition could have yielded better terms or introduced new innovative approaches.

Positive Signals

Awarded through full and open competition, suggesting a fair and transparent initial selection process.
The contract addresses a critical function (economics and risk analysis) for the EPA, indicating a recognized and important need.
The long duration suggests a stable and reliable partnership, potentially leading to institutional knowledge development within the contractor.
The contract was awarded to a single, established entity, which can provide continuity and deep expertise in the specialized field.

Sector Analysis

This contract falls within the professional, scientific, and technical services sector, specifically environmental consulting. This sector is vital for government agencies like the EPA, which rely on external expertise for complex analyses related to environmental policy, regulation, and impact assessment. The market for such services is competitive, with numerous firms offering specialized economic, scientific, and risk analysis capabilities. The EPA's spending in this area is significant, reflecting the complexity and importance of environmental protection and regulation.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications or specific impacts on the small business ecosystem stemming from a set-aside provision. The primary contractor, Industrial Economics Inc., is likely a mid-to-large sized firm given the contract's value and duration. Opportunities for small businesses would typically arise if the prime contractor engaged in subcontracting, which is not explicitly detailed here.

Oversight & Accountability

Oversight for this contract would primarily reside with the contracting officers and program managers within the Environmental Protection Agency. The Cost Plus Fixed Fee structure necessitates diligent oversight to ensure costs are reasonable and allocable to the contract, and that the fixed fee is earned. Transparency is generally facilitated through contract reporting mechanisms, though specific details on public access to performance reports or cost breakdowns are not provided. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Environmental Consulting Services
Economic Analysis Services
Risk Assessment Services
Federal Contract Spending
Environmental Protection Agency Contracts

Risk Flags

Cost Plus Fixed Fee contract type carries inherent risk of cost overruns.
Long contract duration may reduce competitive pressure and potentially lead to inefficiencies.
Lack of specific performance metrics makes objective value assessment difficult.
Single award over a long period may limit opportunities for innovation from other vendors.

Frequently Asked Questions

What is this federal contract paying for?

Environmental Protection Agency awarded $9.0 million to INDUSTRIAL ECONOMICS INC. IGF::CT::IGF CRITICAL FUNCTION - THIS SERVICE CONTRACT IS FOR ECONOMICS AND RISK ANALYSIS STAFF (ERAS) ANALYTICAL SUPPORT (EAS) SERVICES

Who is the contractor on this award?

The obligated recipient is INDUSTRIAL ECONOMICS INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $9.0 million.

What is the period of performance?

Start: 2012-04-30. End: 2021-03-01.

What specific analytical support did Industrial Economics Inc. provide under this contract?

The contract description indicates 'ECONOMICS AND RISK ANALYSIS STAFF (ERAS) ANALYTICAL SUPPORT (EAS) SERVICES.' This suggests that Industrial Economics Inc. provided expertise in economic modeling, cost-benefit analysis, risk assessment, and potentially policy analysis related to environmental regulations and programs. The specific deliverables would have been detailed in task orders issued under the contract, likely including reports, studies, data analysis, and recommendations to inform EPA's decision-making processes. Without access to the specific task orders and final reports, the precise nature of the analytical support remains generalized.

How does the $9 million contract value compare to other EPA contracts for similar services?

Comparing the $9 million contract value requires context regarding the scope, duration, and specific services rendered. Over its 3227-day (approximately 8.8-year) duration, the average annual spend was roughly $1.02 million. This figure is moderate for a long-term, specialized analytical support contract within a large agency like the EPA. However, without detailed benchmarks for 'economic and risk analysis' services specific to environmental consulting, a precise comparison is difficult. Factors like the complexity of analyses, the level of expertise required, and the number of personnel involved would significantly influence cost. It is plausible that this represents a reasonable investment for sustained, critical analytical support.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract of this nature?

The primary risk with a CPFF contract is the potential for cost overruns. While the contractor is paid their actual costs plus a fixed fee, the government bears the risk of cost increases. If the initial cost estimate is inaccurate or if unforeseen issues arise, the total cost to the government can exceed projections. The fixed fee, however, provides the contractor with an incentive to control costs to maximize their profit margin on that fee. Effective oversight by the government is crucial to monitor costs, ensure efficiency, and prevent unnecessary expenditures. The long duration of this contract amplifies this risk, as cost fluctuations and potential inefficiencies can accumulate over time.

What was the track record of Industrial Economics Inc. prior to or during this contract?

Information regarding Industrial Economics Inc.'s specific track record prior to or during this contract is not detailed in the provided data. However, being awarded a multi-year, significant contract by the EPA suggests a level of established capability and past performance that met the agency's requirements. Typically, agencies assess a contractor's past performance, including their ability to meet schedule, cost, and technical requirements on previous contracts, as part of the source selection process. Further investigation into federal procurement databases or contractor performance assessments would be needed for a comprehensive view of their track record.

How has EPA's spending on economic and risk analysis evolved over time, and does this contract fit historical patterns?

The provided data focuses on a single contract awarded in 2012 and ending in 2021. To understand historical patterns, one would need to examine EPA's broader spending on economic and risk analysis services over a longer period, including contracts awarded before and after this one. This contract, valued at approximately $9 million over nearly 9 years, represents a consistent annual investment. If EPA has consistently funded similar analytical support functions, this contract would align with historical patterns. However, without broader spending data, it's impossible to determine if this represents an increase, decrease, or stable level of investment in these services.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Environmental Consulting Services

Product/Service Code: NATURAL RESOURCES MANAGEMENT › NATURAL RESOURCES - OTHER SVCS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: SOL-HQ-12-00003

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 2067 MASS AVE STE 4, CAMBRIDGE, MA, 02140

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

Financial Breakdown

Contract Ceiling: $17,561,243

Exercised Options: $11,054,923

Current Obligation: $9,002,604

Actual Outlays: $3,438

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline