DoD awards $133M for Red Hill pipeline removal, a critical environmental cleanup in Hawaii

Contract Overview

Contract Amount: $133,022,098 ($133.0M)

Contractor: Aptim Federal Services, LLC

Awarding Agency: Department of Defense

Start Date: 2024-02-14

End Date: 2028-05-14

Contract Duration: 1,551 days

Daily Burn Rate: $85.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: DE23-1592 RED HILL PIPELINE REMOVAL, RED HILL BULK FUEL STORAGE FACILITY, JBPHH, HI

Place of Performance

Location: PEARL HARBOR, HONOLULU County, HAWAII, 96860

State: Hawaii Government Spending

Plain-Language Summary

Department of Defense obligated $133.0 million to APTIM FEDERAL SERVICES, LLC for work described as: DE23-1592 RED HILL PIPELINE REMOVAL, RED HILL BULK FUEL STORAGE FACILITY, JBPHH, HI Key points: 1. Significant investment addresses environmental remediation needs at a major military installation. 2. Contract awarded through full and open competition, suggesting a robust bidding process. 3. Firm-fixed-price contract type aims to control costs for this complex project. 4. Long duration indicates the scale and complexity of the pipeline removal and restoration. 5. Project is geographically concentrated in Hawaii, with potential local economic impacts. 6. Focus on environmental services highlights a growing area of federal contracting.

Value Assessment

Rating: good

The contract value of $133 million for pipeline removal and environmental remediation appears reasonable given the scale and complexity of the Red Hill Bulk Fuel Storage Facility issue. While direct comparisons are difficult due to the unique nature of the Red Hill situation, similar large-scale environmental cleanup contracts often involve substantial funding. The firm-fixed-price structure suggests an effort to establish cost certainty, which is positive for value assessment. Benchmarking against other major military environmental projects would provide further context, but the initial value seems aligned with the critical nature of the task.

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. The specific number of bidders is not provided, but this method generally fosters competitive pricing and encourages a wider range of solutions. The open competition suggests that the Department of the Navy sought the best value and technical approach from the market for this critical environmental task.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it is expected to drive down costs through market forces and ensure the government receives competitive pricing for essential services.

Public Impact

The primary beneficiaries are the residents and environment of Hawaii, who will see the remediation of a significant environmental hazard. The services delivered include the removal of pipelines and associated infrastructure at the Red Hill Bulk Fuel Storage Facility. The geographic impact is localized to Joint Base Pearl Harbor-Hickam (JBPHH) and surrounding areas in Oahu, Hawaii. Workforce implications may include job creation for skilled labor in environmental remediation, engineering, and construction within Hawaii.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen environmental complexities arise during removal.
Long-term environmental monitoring requirements may extend beyond the initial contract period.
Dependence on specialized equipment and expertise could create supply chain or availability risks.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Awarded through full and open competition, suggesting a competitive market for these services.
Experienced contractor (APTIM Federal Services, LLC) likely possesses the necessary expertise for this complex task.

Sector Analysis

The environmental remediation sector is a significant and growing area within federal contracting, driven by regulatory requirements and the need to address legacy environmental issues at government facilities. This contract falls within the broader construction and engineering services market, specifically focusing on hazardous material removal and infrastructure decommissioning. Comparable spending benchmarks for large-scale environmental cleanup projects at military installations can range from tens to hundreds of millions of dollars, depending on the scope and complexity.

Small Business Impact

The contract was awarded under full and open competition and does not indicate a small business set-aside. Therefore, direct benefits to small businesses through this specific award are unlikely unless they are subcontractors to the prime contractor, APTIM FEDERAL SERVICES, LLC. The scale of this project suggests that subcontracting opportunities may exist for specialized environmental services, potentially benefiting small businesses in those niches.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Navy, with specific contract officers and technical representatives monitoring performance and adherence to the firm-fixed-price agreement. Transparency is expected through contract award databases and reporting requirements. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract execution.

Related Government Programs

Red Hill Bulk Fuel Storage Facility Environmental Remediation
Military Base Environmental Cleanup Contracts
Pipeline Decommissioning Services
Hazardous Material Removal Contracts
Department of Defense Environmental Programs

Risk Flags

Environmental Risk
Project Complexity
Geographic Isolation
Long-Term Monitoring Needs

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $133.0 million to APTIM FEDERAL SERVICES, LLC. DE23-1592 RED HILL PIPELINE REMOVAL, RED HILL BULK FUEL STORAGE FACILITY, JBPHH, HI

Who is the contractor on this award?

The obligated recipient is APTIM FEDERAL SERVICES, LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $133.0 million.

What is the period of performance?

Start: 2024-02-14. End: 2028-05-14.

What is the track record of APTIM FEDERAL SERVICES, LLC in managing large-scale environmental remediation projects for the Department of Defense?

APTIM FEDERAL SERVICES, LLC has a significant track record with the Department of Defense and other federal agencies in environmental services, including remediation, engineering, and construction. They have been involved in numerous projects addressing hazardous waste, site cleanup, and infrastructure support. While specific details on projects of the exact scale and complexity of Red Hill are proprietary, their extensive experience in complex environments and with federal regulations suggests a capacity to handle such demanding tasks. Reviewing their past performance on similar, albeit potentially smaller, environmental contracts would provide further insight into their capabilities and historical success rates in delivering projects on time and within budget.

How does the $133 million contract value compare to similar large-scale pipeline removal and environmental cleanup projects at military installations?

Benchmarking the $133 million contract value for the Red Hill pipeline removal is challenging due to the unique and critical nature of the Red Hill Bulk Fuel Storage Facility situation. However, large-scale environmental remediation projects at military installations, particularly those involving hazardous materials and extensive infrastructure, often command significant funding. For instance, Superfund site cleanups or major decommissioning projects can easily run into the tens or hundreds of millions of dollars. The value appears commensurate with the complexity, environmental sensitivity, and scale of the undertaking, which involves removing a substantial fuel pipeline system and addressing potential contamination in a sensitive ecosystem.

What are the primary risks associated with this pipeline removal contract, and how are they being mitigated?

The primary risks associated with this contract include unforeseen environmental conditions (e.g., soil or groundwater contamination beyond initial assessments), technical challenges during the physical removal of aging pipelines, potential delays due to logistical complexities in Hawaii, and ensuring the long-term integrity of the site post-remediation. Mitigation strategies likely include thorough site assessments, robust engineering plans, contingency planning for unexpected discoveries, and a firm-fixed-price contract structure that incentivizes the contractor to manage costs effectively. The long duration of the contract (over 4 years) also allows for phased execution and adaptive management as the project progresses.

What is the expected effectiveness of this contract in achieving the environmental cleanup goals at Red Hill?

The effectiveness of this contract in achieving environmental cleanup goals hinges on the successful execution of the pipeline removal and any associated remediation activities as defined in the contract scope. Given the firm-fixed-price nature and the selection of a contractor with presumed relevant experience, the expectation is that the project will be completed according to specifications. The ultimate effectiveness will be measured by the reduction of environmental risk, the successful decommissioning of the pipeline infrastructure, and compliance with environmental regulations. Long-term monitoring and potential follow-on actions may be necessary to ensure sustained environmental protection.

What have been historical spending patterns for environmental remediation at the Red Hill facility or similar large-scale military fuel storage sites?

Historical spending patterns at the Red Hill facility itself have been significant, particularly in response to the fuel spills and the subsequent investigations and emergency response measures. Prior to this specific pipeline removal contract, substantial funds were allocated for containment, cleanup, and assessment efforts. For similar large-scale military fuel storage sites, spending on environmental remediation can be highly variable, depending on the age of the facility, the types of fuels stored, past operational practices, and the regulatory environment. Contracts often involve ongoing monitoring, maintenance, and periodic remediation actions over many years, leading to cumulative expenditures that can reach hundreds of millions of dollars over the lifecycle of addressing environmental liabilities.

What are the implications of the firm-fixed-price contract type for cost control and contractor performance?

The firm-fixed-price (FFP) contract type is generally favored by the government for projects where the scope of work is well-defined and risks are manageable. For this Red Hill pipeline removal, an FFP contract provides the greatest cost certainty for the government, as the contractor assumes the risk of cost overruns. This incentivizes the contractor, APTIM FEDERAL SERVICES, LLC, to perform efficiently and manage resources effectively to maintain profitability. However, it also means that the government has less flexibility to make changes to the scope without formal contract modifications, which can be costly. The success of an FFP contract relies heavily on a clear SOW and the contractor's ability to accurately estimate and control costs.

Industry Classification

NAICS: Construction › Utility System Construction › Oil and Gas Pipeline and Related Structures Construction

Product/Service Code: MAINT, REPAIR, ALTER REAL PROPERTY › MAINT, ALTER, REPAIR NONBUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Peraton Technology Services Inc.

Address: 1725 DUKE ST STE 400, ALEXANDRIA, VA, 22314

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

Financial Breakdown

Contract Ceiling: $251,699,496

Exercised Options: $251,699,496

Current Obligation: $133,022,098

Subaward Activity

Number of Subawards: 17

Total Subaward Amount: $14,213,005

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N3943020D2225

IDV Type: IDC

Timeline