DHS awarded $22.5M for post-disaster construction, but competition was limited

Contract Overview

Contract Amount: $22,489,491 ($22.5M)

Contractor: CH2M Hill Constructors, Inc.

Awarding Agency: Department of Homeland Security

Start Date: 2005-09-30

End Date: 2011-09-24

Contract Duration: 2,185 days

Daily Burn Rate: $10.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Construction

Official Description: IA-TAC TT/MH KATRINA/RITA

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20024

State: District of Columbia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $22.5 million to CH2M HILL CONSTRUCTORS, INC. for work described as: IA-TAC TT/MH KATRINA/RITA Key points: 1. Contract awarded on a cost-plus-fixed-fee basis, which can lead to cost overruns. 2. Limited competition raises concerns about price discovery and potential overpayment. 3. The contract duration of 2185 days suggests a long-term, complex project. 4. Awarded by FEMA, indicating a focus on disaster response and recovery. 5. The contractor, CH2M HILL CONSTRUCTORS, INC., has a significant federal contract history. 6. The contract was not competed, suggesting potential sole-source justifications or urgent needs.

Value Assessment

Rating: questionable

The contract's cost-plus-fixed-fee structure, combined with a lack of competition, makes a definitive value assessment difficult without further data on the specific services rendered and the fixed fee percentage. Benchmarking against similar post-disaster construction contracts would be necessary to determine if the $22.5 million expenditure represents a fair price for the work performed. The absence of competitive bidding inherently limits the ability to ensure optimal value for taxpayer dollars.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a 'NOT COMPETED' basis, indicating it was not subject to a full and open competition. This could be due to various reasons, such as an urgent and compelling need, or that only one source was capable of performing the work. The lack of multiple bidders means there was no direct price comparison, potentially leading to a higher cost than if the contract had been competed.

Taxpayer Impact: When contracts are not competed, taxpayers may not benefit from the cost savings that typically arise from a competitive bidding process. This can result in higher overall spending for government services.

Public Impact

Benefits residents and businesses in areas affected by Hurricanes Katrina and Rita through reconstruction services. Delivers essential commercial and institutional building construction and repair services. Geographic impact is primarily focused on disaster-stricken regions, likely in the Gulf Coast. Supports a construction workforce, potentially including skilled trades and project management personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may have led to higher costs for taxpayers.
Cost-plus-fixed-fee contracts can incentivize cost escalation if not closely monitored.
The long contract duration raises questions about initial scope definition and potential for scope creep.

Positive Signals

Contract awarded to an experienced construction firm, CH2M HILL CONSTRUCTORS, INC.
The contract addresses critical post-disaster recovery needs, demonstrating responsiveness to emergencies.
Awarded by FEMA, a key agency for disaster management, suggesting alignment with agency mission.

Sector Analysis

This contract falls within the commercial and institutional building construction sector, a vital part of the infrastructure supporting economic activity. Federal spending in this sector often spikes during disaster recovery efforts. Comparable spending benchmarks would typically involve analyzing other large-scale construction contracts awarded by FEMA or other federal agencies for post-disaster rebuilding, considering factors like project complexity and geographic location.

Small Business Impact

The contract data indicates that small business participation (sb) was false, and it was not a small business set-aside (ss). This suggests that the prime contract was not specifically targeted towards small businesses. There is no explicit information on subcontracting plans, but given the nature of large construction projects, there is often an opportunity for small businesses to participate as subcontractors. However, without specific subcontracting goals or reporting, the direct impact on the small business ecosystem is unclear.

Oversight & Accountability

Oversight for this contract would primarily fall under the Federal Emergency Management Agency (FEMA) and potentially the Department of Homeland Security's Office of Inspector General (OIG). Given the 'NOT COMPETED' status and cost-plus-fixed-fee structure, rigorous oversight would be crucial to monitor costs, ensure performance, and prevent fraud or abuse. Transparency regarding the justification for the sole-source award and detailed reporting on expenditures would be key accountability measures.

Related Government Programs

Hurricane Katrina Relief Efforts
Hurricane Rita Relief Efforts
Federal Disaster Recovery Programs
Post-Disaster Infrastructure Reconstruction
FEMA Construction Contracts

Risk Flags

Lack of Competition
Cost-Plus-Fixed-Fee Contract Type
Potential for Cost Overruns
Limited Transparency on Justification

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $22.5 million to CH2M HILL CONSTRUCTORS, INC.. IA-TAC TT/MH KATRINA/RITA

Who is the contractor on this award?

The obligated recipient is CH2M HILL CONSTRUCTORS, INC..

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (Federal Emergency Management Agency).

What is the total obligated amount?

The obligated amount is $22.5 million.

What is the period of performance?

Start: 2005-09-30. End: 2011-09-24.

What was the specific justification for awarding this contract on a sole-source basis?

The provided data indicates the contract was 'NOT COMPETED' (ct: NOT COMPETED). While the specific justification is not detailed in the provided data snippet, common reasons for sole-source awards include urgent and compelling circumstances where delaying the award would cause significant damage to the government, or when only one responsible source is available or capable of meeting the requirement. For a disaster recovery contract, an urgent need to commence rebuilding efforts quickly following Hurricanes Katrina and Rita could have been a primary driver. Further investigation into FEMA's contract files would be required to ascertain the precise justification documented at the time of award.

How does the cost-plus-fixed-fee (CPFF) structure compare to other contract types for post-disaster construction?

Cost-plus-fixed-fee (CPFF) contracts are often used when the scope of work is not clearly defined or is expected to change, which is common in disaster recovery scenarios. Under a CPFF contract, the contractor is reimbursed for all allowable costs plus a predetermined fixed fee representing profit. While this structure allows for flexibility and rapid initiation of services, it carries a higher risk of cost overruns compared to fixed-price contracts, as the government bears the majority of the cost risk. Other contract types like firm-fixed-price (FFP) offer greater cost certainty but may be less suitable for unpredictable disaster environments. The effectiveness of a CPFF contract heavily relies on robust government oversight to control costs and ensure efficiency.

What was the total spending on disaster recovery construction by FEMA during the period of this contract (2005-2011)?

The provided data focuses on a single contract awarded to CH2M HILL CONSTRUCTORS, INC. for $22.5 million. To determine total FEMA spending on disaster recovery construction during the 2005-2011 period, a broader analysis of FEMA's contracting data would be necessary. This would involve querying federal procurement databases (like FPDS or USASpending.gov) for all construction-related contracts awarded by FEMA within those fiscal years, filtering by relevant North American Industry Classification System (NAICS) codes (e.g., 236220 for Commercial and Institutional Building Construction) and potentially keywords related to disaster relief. Such an analysis would reveal the scale of federal investment in post-Katrina and Rita recovery and provide context for this specific contract's expenditure.

What is the track record of CH2M HILL CONSTRUCTORS, INC. with federal disaster recovery contracts?

CH2M HILL CONSTRUCTORS, INC. (now part of Jacobs) has a substantial history of performing large-scale engineering, procurement, and construction (EPC) services for the U.S. federal government, including significant work in disaster recovery and resilience. They have been involved in major post-disaster rebuilding efforts, such as those following Hurricanes Katrina and Rita, as indicated by this contract. Their experience often includes infrastructure repair, environmental remediation, and facility construction in challenging environments. While this specific contract was sole-sourced, the company's broader portfolio demonstrates extensive experience in managing complex federal projects, often under various contract types, and working with agencies like FEMA and the Department of Defense.

Were there any performance issues or contract disputes associated with this specific $22.5M contract?

The provided data snippet does not contain information regarding performance issues, disputes, or contract modifications for this specific contract (ID 236220). To assess performance and identify any potential issues, one would need to consult more detailed contract administration records, such as contract modification history, performance reports, payment records, and any associated litigation or dispute resolution filings. Agencies typically maintain such records, and they can often be accessed through Freedom of Information Act (FOIA) requests or by reviewing publicly available contract data systems that may include more granular details than the summary data provided here.

Industry Classification

NAICS: Construction › Nonresidential Building Construction › Commercial and Institutional Building Construction

Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: CH2M Hill Companies, Ltd. (UEI: 027620574)

Address: 9191 SOUTH JAMAICA STREET, ENGLEWOOD, CO, 06

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $89,944,591

Exercised Options: $89,944,591

Current Obligation: $22,489,491

Parent Contract

Parent Award PIID: HSFEHQ05D0592

IDV Type: IDC

Timeline