FEMA's $35.7M housing support contract awarded to Shaw Environmental, Inc. via sole-source procurement

Contract Overview

Contract Amount: $35,671,548 ($35.7M)

Contractor: Shaw Environmental, Inc.

Awarding Agency: Department of Homeland Security

Start Date: 2006-03-09

End Date: 2006-10-31

Contract Duration: 236 days

Daily Burn Rate: $151.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: SUPPORT; HOUSING SUPPORT IN LA TO INCLUDE SITE DESIGN, INSTALLATION

Place of Performance

Location: ALEXANDRIA, ALEXANDRIA CITY County, VIRGINIA, 22314

State: Virginia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $35.7 million to SHAW ENVIRONMENTAL, INC. for work described as: SUPPORT; HOUSING SUPPORT IN LA TO INCLUDE SITE DESIGN, INSTALLATION Key points: 1. The contract's value of $35.7 million for housing support services represents a significant investment in disaster relief infrastructure. 2. Awarded on a sole-source basis, the procurement method raises questions about potential cost efficiencies and market competition. 3. The contract duration of 236 days suggests a focused, short-term effort for immediate post-disaster needs. 4. The 'All Other Professional, Scientific, and Technical Services' NAICS code indicates a broad scope of work, potentially encompassing diverse support functions. 5. The absence of small business set-aside flags suggests the primary contractor is not a small business, with potential implications for subcontracting opportunities. 6. The contract's performance period falls within a specific fiscal year, aligning with immediate disaster response timelines.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and the specific, potentially unique, nature of housing support services during disaster relief. Without competitive bids, it's difficult to assess if the $35.7 million represents a fair market price or if alternative, more cost-effective solutions were overlooked. The cost-plus-fixed-fee (CPFF) contract type can sometimes lead to higher costs if not meticulously managed, as it incentivizes the contractor to incur costs to achieve a fixed profit. Further analysis would require detailed breakdowns of the services provided and comparisons to similar disaster response support contracts, which are often highly situational.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source procurement method, meaning only one contractor, Shaw Environmental, Inc., was solicited. This approach is typically justified when only one source is capable of meeting the government's needs, often due to specialized expertise, urgent requirements, or lack of viable alternatives. The absence of competition means that the government did not benefit from the price discovery and innovation that typically arises from multiple bidders vying for a contract. This can potentially lead to higher prices and less favorable terms compared to a fully competed contract.

Taxpayer Impact: Taxpayers may have paid a premium for these services due to the lack of competitive pressure. Without a bidding process, there's less assurance that the selected price reflects the most economical option available in the market.

Public Impact

Disaster-affected populations in the designated area (likely Virginia, given the 'SN' field) benefit from the provision of housing support services. The services delivered likely include site design and installation related to temporary or permanent housing solutions following a disaster. The geographic impact is concentrated in the area served by FEMA's Federal Emergency Management Agency, specifically within the state of Virginia. The contract supports the federal government's mission to provide essential services and aid during national emergencies.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits transparency and potential for cost savings through competition.
Cost-plus-fixed-fee contract type may incentivize higher costs if not closely monitored.
Broad 'All Other Professional, Scientific, and Technical Services' category lacks specificity, making performance evaluation potentially complex.
Short contract duration (236 days) might indicate a reactive, rather than proactive, approach to housing support needs.

Positive Signals

Award to an established entity (Shaw Environmental, Inc.) suggests potential for reliable service delivery.
Contract addresses critical post-disaster needs, directly supporting federal emergency response objectives.
The contract is tied to a specific agency (FEMA) and a clear mission (housing support), indicating focused application of funds.

Sector Analysis

The contract falls within the Professional, Scientific, and Technical Services sector, specifically under the NAICS code 541990 for 'All Other Professional, Scientific, and Technical Services.' This broad category encompasses a wide range of specialized services. In the context of federal spending, contracts within this sector often support government operations, research, and specialized project management. The market size for such services is substantial, with numerous firms offering expertise in areas like environmental consulting, engineering, and technical support. This particular contract appears to be a direct response to a specific government need, likely related to disaster recovery, rather than a broad, ongoing service requirement.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (SS=false, SB=false). This suggests that the primary contractor, Shaw Environmental, Inc., is likely a large business. Consequently, there may be limited direct subcontracting opportunities for small businesses under this specific award, unless Shaw Environmental voluntarily engages them. The absence of a small business set-aside also means that a portion of the federal contracting dollars was not specifically directed towards fostering the growth and participation of small businesses in the federal marketplace for these services.

Oversight & Accountability

Oversight for this contract would primarily reside with the Federal Emergency Management Agency (FEMA), a component of the Department of Homeland Security. As a Cost Plus Fixed Fee (CPFF) contract, rigorous oversight of incurred costs and the contractor's performance against the fixed fee is crucial. Transparency regarding the specific services rendered and the justification for the sole-source award would be key areas for scrutiny. While the specific Inspector General jurisdiction isn't detailed, the Department of Homeland Security's Office of Inspector General typically oversees FEMA's operations and expenditures, ensuring accountability and investigating potential fraud, waste, or abuse.

Related Government Programs

Disaster Relief Funding
Emergency Housing Programs
Federal Emergency Management Agency (FEMA) Contracts
Professional and Technical Services
Post-Disaster Reconstruction

Risk Flags

Sole-source procurement lacks competitive transparency.
Cost-plus-fixed-fee contract type may lead to higher costs.
Broad NAICS code lacks specificity, potentially hindering performance evaluation.
Contract duration is relatively short for complex installation projects.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $35.7 million to SHAW ENVIRONMENTAL, INC.. SUPPORT; HOUSING SUPPORT IN LA TO INCLUDE SITE DESIGN, INSTALLATION

Who is the contractor on this award?

The obligated recipient is SHAW ENVIRONMENTAL, 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 $35.7 million.

What is the period of performance?

Start: 2006-03-09. End: 2006-10-31.

What specific housing support services were included under this $35.7 million contract, and how were they justified for a sole-source award?

The contract description indicates 'SUPPORT; HOUSING SUPPORT IN LA TO INCLUDE SITE DESIGN, INSTALLATION.' This suggests services related to preparing sites for housing and the physical installation of housing units, likely temporary or transitional, in response to a disaster. The justification for a sole-source award would typically stem from a determination that only Shaw Environmental, Inc. possessed the unique capabilities, specialized knowledge, or immediate availability required to perform these critical tasks under urgent disaster conditions. This could involve specific environmental remediation, specialized construction techniques, or pre-existing contractual relationships that made them the only viable option for rapid deployment. Without access to the full contract file and justification documentation, the precise reasons remain speculative but would focus on urgency, unique capability, or lack of alternatives.

How does the Cost Plus Fixed Fee (CPFF) contract type potentially impact the final cost compared to other contract types for similar disaster response services?

The Cost Plus Fixed Fee (CPFF) contract type allows the contractor to recover all allowable costs incurred, plus a predetermined fixed fee representing profit. For disaster response, this can be advantageous when the scope of work is uncertain or subject to rapid change, as it provides flexibility. However, it carries a risk of cost overruns, as the contractor is incentivized to incur costs to achieve the fixed profit, rather than necessarily minimizing them. Compared to a firm-fixed-price contract, CPFF generally offers less cost certainty for the government. If the work scope were well-defined and stable, a firm-fixed-price contract might have yielded a lower overall cost by placing more risk on the contractor to manage expenses efficiently. The effectiveness of CPFF hinges on robust government oversight to control costs and ensure the fixed fee remains appropriate for the effort.

What is the typical track record of Shaw Environmental, Inc. in performing large-scale federal disaster response contracts?

Shaw Environmental, Inc. has a history of performing large-scale environmental and infrastructure projects for the federal government, including work related to disaster recovery and response. Their experience often encompasses complex remediation, construction, and technical support services. While specific details of their track record for housing support during disasters would require a deeper dive into past performance evaluations and contract histories, their general profile suggests they are a capable entity for undertaking significant government contracts. However, the success and efficiency of any specific contract, especially a sole-source award like this one, depend heavily on the contract's specific requirements, management, and the prevailing circumstances of the disaster event.

Given the 'All Other Professional, Scientific, and Technical Services' classification, what are the potential risks associated with the broad scope of this contract?

The broad classification of 'All Other Professional, Scientific, and Technical Services' (NAICS 541990) presents several potential risks. Firstly, it can lead to a lack of specificity in defining the exact deliverables and performance standards, making it challenging for both the government and the contractor to clearly understand expectations. This ambiguity can result in scope creep, disputes over work performed, and difficulties in accurately measuring performance and value. Secondly, it may obscure the true nature of the services being procured, potentially masking requirements that could be better met by more specialized NAICS codes with established market benchmarks. Finally, the broadness can make it harder for oversight bodies to pinpoint specific areas of concern or success, complicating accountability and performance assessment.

What does the contract award date (2006-03-09) and period of performance (ending 2006-10-31) suggest about the urgency and nature of the housing support required?

The award date in early March 2006 and a performance period concluding in late October 2006 suggest that the housing support services were needed urgently following a disaster event that occurred sometime prior to March 2006. The duration of approximately 7.5 months indicates a need for sustained support beyond immediate emergency shelter, likely encompassing the design and installation phases for more stable, albeit potentially temporary, housing solutions. This timeframe aligns with the recovery phase of disaster management, where efforts shift from immediate life-saving to restoring basic living conditions. The specific timing implies the contract was initiated to address the aftermath of a significant event requiring substantial logistical and technical intervention.

Industry Classification

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

Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCTION OF BUILDINGS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: HSFEHQ05R0046

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Chicago Bridge & Iron Company N.V. (UEI: 386491765)

Address: 1725 DUKE STREET, ALEXANDRIA, VA, 22314

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $35,671,549

Exercised Options: $35,671,549

Current Obligation: $35,671,548

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HSFEHQ05D0573

IDV Type: IDC

Timeline