DoD Awards $90M Long-Term Water System Contract to CH2M Hill Constructors, Running Through 2053

Contract Overview

Contract Amount: $90,087,389 ($90.1M)

Contractor: CH2M Hill Constructors, Inc.

Awarding Agency: Department of Defense

Start Date: 2017-07-01

End Date: 2053-08-31

Contract Duration: 13,210 days

Daily Burn Rate: $6.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIXED PRICE REDETERMINATION

Sector: Construction

Official Description: THIS IS A CONTINUATION OF W9124J-17-C-0043, AWARDED ON JULY 1, 2017, DUE TO THE TRANSFER OF CONTRACT ADMINISTRATION. THE PERIOD OF PERFORMANCE IS JULY 1, 2017 TO SEPTEMBER 28, 2050 (399 MONTHS).

Place of Performance

Location: FORT CAMPBELL, MONTGOMERY County, TENNESSEE, 42223

State: Tennessee Government Spending

Plain-Language Summary

Department of Defense obligated $90.1 million to CH2M HILL CONSTRUCTORS, INC. for work described as: THIS IS A CONTINUATION OF W9124J-17-C-0043, AWARDED ON JULY 1, 2017, DUE TO THE TRANSFER OF CONTRACT ADMINISTRATION. THE PERIOD OF PERFORMANCE IS JULY 1, 2017 TO SEPTEMBER 28, 2050 (399 MONTHS). Key points: 1. Significant long-term commitment with a 36-year period of performance. 2. Awarded under full and open competition, suggesting a competitive bidding process. 3. Fixed Price Redetermination contract type introduces potential cost variability. 4. The contract supports Water Supply and Irrigation Systems, a critical infrastructure need.

Value Assessment

Rating: fair

The contract value of $90M over 36 years averages to approximately $2.5M annually. Without specific per-unit cost data or benchmarks for similar long-term water system maintenance and operation contracts, a precise value assessment is difficult. The long duration suggests a need for sustained services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. This method generally promotes competitive pricing and allows the government to select the best value offer.

Taxpayer Impact: The competitive award process aims to ensure taxpayer funds are used efficiently for essential infrastructure services over an extended period.

Public Impact

Ensures continued operation and maintenance of vital water supply and irrigation systems. Long-term contract provides stability for service provider and predictable service delivery. Potential for cost overruns due to the Fixed Price Redetermination contract type. Impacts local communities and military installations reliant on these water systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (36 years) increases risk of unforeseen cost escalations.
Fixed Price Redetermination contract type allows for price adjustments, potentially increasing costs.
Lack of specific performance metrics in provided data makes effectiveness assessment challenging.

Positive Signals

Awarded through full and open competition, suggesting competitive pricing.
Addresses critical infrastructure needs for water supply and irrigation.
Long-term commitment ensures sustained service delivery.

Sector Analysis

This contract falls within the Construction and Engineering services sector, specifically focusing on water infrastructure. Long-term contracts for such essential services are common in government, but the duration here is exceptionally long, requiring careful monitoring for cost and performance.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). Therefore, small businesses were likely not the primary focus of this specific award, though they may participate as subcontractors.

Oversight & Accountability

The extensive 36-year performance period necessitates robust oversight mechanisms to ensure contractor performance, cost control, and adherence to contract terms. Regular reviews and audits will be crucial for accountability.

Related Government Programs

Water Supply and Irrigation Systems
Department of Defense Contracting
Defense Logistics Agency Programs

Risk Flags

Extended contract duration increases risk of cost escalation due to inflation and unforeseen events.
Fixed Price Redetermination contract type introduces price uncertainty.
Lack of detailed performance metrics in the provided data hinders effectiveness assessment.
No indication of small business participation, potentially limiting broader economic impact.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $90.1 million to CH2M HILL CONSTRUCTORS, INC.. THIS IS A CONTINUATION OF W9124J-17-C-0043, AWARDED ON JULY 1, 2017, DUE TO THE TRANSFER OF CONTRACT ADMINISTRATION. THE PERIOD OF PERFORMANCE IS JULY 1, 2017 TO SEPTEMBER 28, 2050 (399 MONTHS).

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 (Defense Logistics Agency).

What is the total obligated amount?

The obligated amount is $90.1 million.

What is the period of performance?

Start: 2017-07-01. End: 2053-08-31.

What are the specific redetermination clauses within the Fixed Price Redetermination contract, and how frequently can prices be adjusted?

The specific redetermination clauses dictate the conditions and frequency under which the contract's price can be adjusted. Typically, these clauses allow for price changes based on factors like material costs, labor rates, or other economic indices. Understanding these triggers is crucial for assessing potential cost escalations and ensuring the government is not unduly burdened by unforeseen price hikes over the contract's long duration.

What performance metrics are in place to ensure the effectiveness of water supply and irrigation systems over the 36-year period?

Given the contract's extended duration, it is vital to establish clear and measurable performance metrics for the water supply and irrigation systems. These metrics should cover aspects like water quality, system reliability, maintenance schedules, and emergency response capabilities. Regular performance evaluations against these benchmarks are essential to guarantee the systems remain effective and meet operational requirements throughout the contract's lifespan.

How will the government manage potential cost increases associated with inflation and unforeseen infrastructure issues over the 36-year contract term?

Managing cost increases over such a long period requires proactive strategies. This includes leveraging the redetermination clauses judiciously, potentially incorporating inflation indexing, and establishing contingency funds for unexpected infrastructure repairs or upgrades. Strong contract management, including regular cost reviews and negotiations, will be critical to mitigate the financial risks associated with long-term infrastructure contracts.

Industry Classification

NAICS: Utilities › Water, Sewage and Other Systems › Water Supply and Irrigation Systems

Product/Service Code: UTILITIES AND HOUSEKEEPING › UTILITIES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: DACA8700R0005

Offers Received: 1

Pricing Type: FIXED PRICE REDETERMINATION (A)

Evaluated Preference: NONE

Contractor Details

Parent Company: Jacobs Engineering Group Inc.

Address: 9189 S JAMAICA ST, ENGLEWOOD, CO, 80112

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

Financial Breakdown

Contract Ceiling: $112,893,530

Exercised Options: $112,893,530

Current Obligation: $90,087,389

Actual Outlays: $2,623,541

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline