DoD's $78M Advanced Water Treatment Plant contract awarded to CH2M HILL CONSTRUCTORS, INC. for California facility
Contract Overview
Contract Amount: $78,361,581 ($78.4M)
Contractor: CH2M Hill Constructors, Inc.
Awarding Agency: Department of Defense
Start Date: 2012-09-30
End Date: 2020-09-30
Contract Duration: 2,922 days
Daily Burn Rate: $26.8K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 9
Pricing Type: FIRM FIXED PRICE
Sector: Construction
Official Description: P-1044 ADVANCED WATER TREATMENT PLANT MCB CAMP PENDLETON
Place of Performance
Location: CAMP PENDLETON, SAN DIEGO County, CALIFORNIA, 92055
Plain-Language Summary
Department of Defense obligated $78.4 million to CH2M HILL CONSTRUCTORS, INC. for work described as: P-1044 ADVANCED WATER TREATMENT PLANT MCB CAMP PENDLETON Key points: 1. Contract value appears reasonable given the scope of constructing a significant water treatment facility. 2. Full and open competition suggests a competitive bidding process, potentially leading to better pricing. 3. The contract duration of nearly 8 years indicates a long-term, complex project. 4. Fixed-price contract type shifts performance risk to the contractor. 5. Project located in California, a state with stringent environmental regulations, may influence costs and complexity. 6. The North American Industry Classification System (NAICS) code 237110 points to specialized infrastructure construction.
Value Assessment
Rating: good
The contract value of approximately $78.4 million for an advanced water treatment plant seems within a reasonable range for a project of this scale and complexity. Benchmarking against similar large-scale water infrastructure projects, especially those involving advanced treatment technologies and located in areas with high construction costs like California, would provide a more precise value assessment. The firm fixed-price nature of the contract suggests that the contractor bears the primary financial risk, which can sometimes lead to higher initial bids but offers cost certainty to the government.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. With nine bidders participating, the level of competition was robust. This broad participation suggests that the market had sufficient capacity and interest in undertaking this project, which generally fosters competitive pricing and encourages contractors to offer their best value propositions to secure the award.
Taxpayer Impact: A high level of competition benefits taxpayers by driving down costs through a more efficient price discovery process and ensuring that the government receives a fair market price for the services rendered.
Public Impact
The primary beneficiaries are the military personnel and their families stationed at MCB Camp Pendleton, who will receive improved water quality and reliability. The contract delivers essential infrastructure for advanced water treatment, crucial for public health and environmental compliance. The geographic impact is localized to MCB Camp Pendleton in California. The project likely created numerous jobs in construction, engineering, and related trades within the local California economy.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Long contract duration (nearly 8 years) increases the risk of cost overruns due to potential changes in material costs, labor rates, or unforeseen site conditions.
- The complexity of 'advanced water treatment' may introduce technical risks if the chosen technology is novel or unproven at this scale.
- Reliance on a single large contractor for such a critical piece of infrastructure could pose a risk if the contractor experiences financial difficulties or performance issues.
Positive Signals
- Awarded under full and open competition with nine bidders, indicating a healthy competitive environment.
- Firm fixed-price contract type provides cost certainty for the government, transferring cost overrun risk to the contractor.
- The project addresses a critical need for water treatment, ensuring operational readiness and compliance with environmental standards.
Sector Analysis
The construction of water and sewer lines and related structures falls under the heavy and civil engineering construction sector. This sector is characterized by large-scale projects, significant capital investment, and specialized engineering expertise. The market for such infrastructure projects is often driven by government funding for public works and military base improvements. The contract value of $78.4 million places this project within the upper tier of typical construction contracts for specialized facilities.
Small Business Impact
The data indicates that this contract was not set aside for small businesses (ss: false, sb: false) and there were nine bidders in total. This suggests that the primary award went to a large firm capable of handling a project of this magnitude. There is no explicit information on subcontracting plans for small businesses within the provided data, which would be a key area to investigate for potential small business participation and economic impact.
Oversight & Accountability
Oversight for this contract would typically be managed by the Department of the Navy's contracting officers and project managers. Accountability measures are inherent in the firm fixed-price contract structure, which incentivizes the contractor to complete the work within budget. Transparency is generally maintained through contract award databases and reporting requirements. The Inspector General for the Department of Defense would have jurisdiction to investigate any allegations of fraud, waste, or abuse related to this contract.
Related Government Programs
- Military Construction Program
- Water and Wastewater Systems
- Environmental Infrastructure Projects
- Department of Defense Facilities Management
Risk Flags
- Long contract duration may increase risk of cost escalation or obsolescence.
- Complexity of 'advanced' treatment technology could pose technical challenges.
- Potential for unforeseen site conditions over an 8-year construction period.
Tags
construction, department-of-defense, navy, california, definitive-contract, firm-fixed-price, full-and-open-competition, water-and-sewer-line-construction, large-project, infrastructure, advanced-water-treatment
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $78.4 million to CH2M HILL CONSTRUCTORS, INC.. P-1044 ADVANCED WATER TREATMENT PLANT MCB CAMP PENDLETON
Who is the contractor on this award?
The obligated recipient is CH2M HILL CONSTRUCTORS, INC..
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Navy).
What is the total obligated amount?
The obligated amount is $78.4 million.
What is the period of performance?
Start: 2012-09-30. End: 2020-09-30.
What is the track record of CH2M HILL CONSTRUCTORS, INC. with similar large-scale water infrastructure projects for the Department of Defense?
CH2M HILL CONSTRUCTORS, INC. (now part of Jacobs) has a significant history of undertaking large-scale engineering and construction projects, including water and wastewater treatment facilities, for government agencies and private clients. Their experience often includes complex projects requiring advanced treatment technologies and adherence to stringent environmental regulations. While specific details on past DoD water treatment projects awarded to CH2M HILL CONSTRUCTORS, INC. are not provided in this data snippet, their general profile suggests they possess the requisite expertise and capacity. A deeper dive into their contract history with the DoD, particularly for projects of similar scale and technical requirements, would be necessary to fully assess their track record for this specific contract.
How does the awarded price of $78.4 million compare to the estimated cost or budget for this advanced water treatment plant?
The provided data does not include the government's estimated cost or budget for the P-1044 Advanced Water Treatment Plant. The awarded price of $78,361,580.53 represents the final agreed-upon cost between the Department of the Navy and CH2M HILL CONSTRUCTORS, INC. To assess value for money, this awarded price would need to be compared against independent government cost estimates, bids from other competitors (if available), and benchmarks from similar projects. Without the government's estimate or a range of bids, it's difficult to definitively state if $78.4 million was a competitive or inflated price, though the presence of nine bidders suggests a competitive process.
What are the key performance indicators (KPIs) used to measure the success of this contract and the performance of CH2M HILL CONSTRUCTORS, INC.?
Specific Key Performance Indicators (KPIs) for this contract are not detailed in the provided data. However, for a construction project of this nature, typical KPIs would likely include adherence to schedule (completion by the end date of September 30, 2020), quality of construction (meeting design specifications and engineering standards), safety performance (minimizing accidents and injuries on site), and compliance with environmental regulations. For an advanced water treatment plant, functional performance testing of the plant's ability to treat water to specified quality standards would be a critical post-construction KPI. The firm fixed-price nature also implies that meeting the contracted scope within budget is a primary performance measure.
What is the historical spending trend for advanced water treatment facilities at Department of Defense installations?
Historical spending trends for advanced water treatment facilities at Department of Defense (DoD) installations are not directly available from the provided data snippet. However, it is generally understood that the DoD invests significantly in infrastructure upgrades and maintenance across its global installations. Spending on water and wastewater systems is a consistent requirement, driven by factors such as aging infrastructure, increased population density on bases, and evolving environmental standards. The need for advanced treatment can arise from specific local water quality issues, regulatory mandates, or the desire to implement water reuse or desalination technologies. Tracking specific contract awards like P-1044 over time would be necessary to identify trends in investment for such specialized facilities.
What are the potential risks associated with the long duration (nearly 8 years) of this contract?
The long duration of this contract (2922 days, approximately 8 years) presents several potential risks. Firstly, there is an increased risk of cost escalation due to inflation affecting labor, materials, and equipment over such an extended period, although the firm fixed-price contract aims to mitigate this for the government. Secondly, unforeseen site conditions or geological challenges can emerge during prolonged construction, potentially leading to delays and change orders. Thirdly, technological advancements in water treatment could occur during the project lifecycle, raising questions about the long-term relevance or efficiency of the initially specified technology. Finally, contractor performance stability over eight years can be a concern; financial difficulties, key personnel departures, or shifts in company strategy could impact project delivery.
Industry Classification
NAICS: Construction › Utility System Construction › Water and Sewer Line and Related Structures Construction
Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCTION OF BUILDINGS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: TWO STEP
Solicitation ID: N6247311R0408
Offers Received: 9
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Jacobs Engineering Group Inc (UEI: 074103508)
Address: 6 HUTTON CENTRE DR STE 700, SANTA ANA, CA, 92707
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $78,361,581
Exercised Options: $78,361,581
Current Obligation: $78,361,581
Subaward Activity
Number of Subawards: 131
Total Subaward Amount: $80,600,547
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2012-09-30
Current End Date: 2020-09-30
Potential End Date: 2020-09-30 00:00:00
Last Modified: 2020-09-29
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