DoD's $17.8M contract to CH2M HILL, INC for biological threat reduction in Ukraine

Contract Overview

Contract Amount: $17,880,284 ($17.9M)

Contractor: CH2M Hill, Inc

Awarding Agency: Department of Defense

Start Date: 2020-06-30

End Date: 2024-06-30

Contract Duration: 1,461 days

Daily Burn Rate: $12.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: SERVICES TO SUPPORT THE REDUCTION OF THE BIOLOGICAL THREAT IN UKRAINE

Plain-Language Summary

Department of Defense obligated $17.9 million to CH2M HILL, INC for work described as: SERVICES TO SUPPORT THE REDUCTION OF THE BIOLOGICAL THREAT IN UKRAINE Key points: 1. Contract awarded via 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. Performance period spans over four years, indicating a long-term commitment to the services. 4. The North American Industry Classification System (NAICS) code 541990 covers 'All Other Professional, Scientific, and Technical Services'. 5. This contract is managed by the Defense Threat Reduction Agency (DTRA). 6. The contract was awarded as a delivery order, implying it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract.

Value Assessment

Rating: fair

Benchmarking the value of this specific contract is challenging without more detailed cost breakdowns and comparisons to similar international biological threat reduction efforts. The Cost Plus Fixed Fee (CPFF) contract type means the government reimburses the contractor for allowable costs plus a fixed fee, which can sometimes lead to higher overall costs compared to fixed-price contracts if cost controls are not stringent. However, CPFF is often used when the scope of work is not well-defined or involves significant uncertainty, which may be the case for biological threat reduction in a complex geopolitical environment.

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. The presence of 5 bids suggests a reasonable level of competition for this specialized service. A competitive process generally helps in achieving better pricing and service quality by allowing multiple contractors to vie for the award.

Taxpayer Impact: Taxpayers benefit from a competitive process as it typically drives down costs and encourages efficiency, ensuring that the allocated funds are used to secure the best possible value for the services rendered.

Public Impact

The primary beneficiaries are likely the Ukrainian government and its population, through enhanced security against biological threats. Services delivered aim to reduce the risk of biological weapons proliferation and mitigate the impact of potential biological incidents. The geographic impact is focused on Ukraine, contributing to regional and potentially global biosecurity. Workforce implications may include the deployment of specialized scientific and technical personnel to the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type can lead to cost overruns if not closely monitored.
The geopolitical instability in Ukraine presents inherent risks to contract execution and personnel safety.
Defining and measuring success in biological threat reduction can be complex and may involve long-term outcomes.

Positive Signals

Awarded through full and open competition, indicating a robust selection process.
The Defense Threat Reduction Agency has a specific mission mandate for such activities.
The long performance period allows for sustained effort and relationship building with local partners.

Sector Analysis

This contract falls within the professional, scientific, and technical services sector, specifically related to defense and national security. The market for biological threat reduction services is specialized, involving expertise in areas like biosecurity, non-proliferation, and public health. Spending in this niche is often driven by government priorities related to national security and international cooperation, with DTRA being a key agency in this domain.

Small Business Impact

There is no indication that this contract involved small business set-asides. Given the specialized nature of biological threat reduction, it is likely that larger, experienced contractors with specific expertise and security clearances were prioritized. Subcontracting opportunities for small businesses may exist, but would depend on the prime contractor's strategy and the specific needs of the project.

Oversight & Accountability

Oversight is likely provided by the Defense Threat Reduction Agency (DTRA) through contract officers, program managers, and potentially on-site representatives. Accountability measures would be embedded in the contract terms, including performance metrics and reporting requirements. Transparency may be limited due to the sensitive nature of biological threat reduction activities and national security considerations.

Related Government Programs

Global Health Security Initiative
Biosecurity Engagement Program
Chemical and Biological Defense Program
Foreign Military Financing

Risk Flags

Contract type (CPFF) may lead to cost overruns.
Geopolitical instability in the region poses security risks.
Sensitive nature of biological materials requires strict safety protocols.
Long performance period requires sustained oversight.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.9 million to CH2M HILL, INC. SERVICES TO SUPPORT THE REDUCTION OF THE BIOLOGICAL THREAT IN UKRAINE

Who is the contractor on this award?

The obligated recipient is CH2M HILL, INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Threat Reduction Agency).

What is the total obligated amount?

The obligated amount is $17.9 million.

What is the period of performance?

Start: 2020-06-30. End: 2024-06-30.

What is the specific nature of the 'biological threat reduction' services being provided in Ukraine under this contract?

The contract, awarded to CH2M HILL, INC, focuses on services to support the reduction of biological threats in Ukraine. While the exact nature of these services is not detailed in the provided data, such contracts typically involve a range of activities. These can include assisting in securing or eliminating biological weapons materials, enhancing biosafety and biosecurity measures at research facilities, improving disease surveillance and response capabilities, and providing technical expertise to prevent the proliferation of dangerous pathogens. The goal is generally to reduce the risk of accidental release, theft, or intentional misuse of biological agents, thereby enhancing both Ukrainian and global security.

How does the Cost Plus Fixed Fee (CPFF) contract type influence the cost-effectiveness of this biological threat reduction effort?

The Cost Plus Fixed Fee (CPFF) contract type means the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing their profit. This structure is often used when the scope of work is uncertain or involves significant research and development, as is common in specialized areas like biological threat reduction. While it allows for flexibility, it carries a risk of cost overruns if the contractor's costs exceed initial estimates, as the government bears the brunt of these increases. The fixed fee, however, provides a predictable profit margin for the contractor. Effective cost-effectiveness relies heavily on robust government oversight, clear performance metrics, and stringent auditing of incurred costs to ensure value for taxpayer money.

What are the primary risks associated with executing a contract for biological threat reduction in Ukraine?

Executing a contract for biological threat reduction in Ukraine involves several significant risks. Geopolitical instability and the ongoing conflict present substantial security risks to personnel and assets, potentially disrupting operations and increasing costs for security measures. Furthermore, the sensitive nature of biological materials and facilities requires stringent biosecurity and safety protocols, with any breach having severe public health and environmental consequences. Political and regulatory changes within Ukraine could also impact project continuity. Additionally, the technical complexity of the work and the potential for unforeseen scientific challenges add layers of risk to successful project completion and threat mitigation.

What is the historical spending pattern of the Defense Threat Reduction Agency (DTRA) on similar biological threat reduction programs?

The Defense Threat Reduction Agency (DTRA) has a long-standing mission and consistent history of funding programs aimed at reducing biological threats globally, including in regions of strategic importance like Eastern Europe. While specific historical spending figures for Ukraine-related biological threat reduction are not provided here, DTRA's budget typically allocates substantial resources to initiatives focused on non-proliferation, biosecurity, and consequence management. Their spending often involves partnerships with host nations to enhance their capabilities in these areas. Analyzing DTRA's broader budget trends and program allocations would reveal a sustained commitment to these types of activities, often fluctuating based on global threat assessments and geopolitical priorities.

How does the competition level (5 bidders) for this contract impact the potential for contractor performance and innovation?

Having five bidders for this contract suggests a healthy level of competition, which generally benefits the government. A competitive environment encourages bidders to offer their best technical solutions and pricing to win the award. This can lead to higher quality services and potentially more innovative approaches as contractors strive to differentiate themselves. For the government, it increases the likelihood of selecting a contractor that offers the best overall value. However, the specialized nature of biological threat reduction might mean that the pool of truly qualified bidders is limited, so while five is a good number, the depth of unique innovation might still be constrained by the available expertise in the market.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Other Professional, Scientific, and Technical Services › All Other Professional, Scientific, and Technical Services

Product/Service Code: EDUCATION AND TRAINING › EDUCATION AND TRAINING SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: HDTRA116R0027

Offers Received: 5

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 7001 E BELLEVIEW AVE STE 1000, DENVER, CO, 80237

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

Financial Breakdown

Contract Ceiling: $19,405,756

Exercised Options: $19,405,756

Current Obligation: $17,880,284

Actual Outlays: $10,801,247

Subaward Activity

Number of Subawards: 83

Total Subaward Amount: $5,146,422

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HDTRA118D0007

IDV Type: IDC

Timeline