DoD's $46.9M Remediation Services Contract for McConnell AFB Shows Fair Value Amidst Limited Competition

Contract Overview

Contract Amount: $46,870,214 ($46.9M)

Contractor: URS Group, Inc.

Awarding Agency: Department of Defense

Start Date: 2013-09-27

End Date: 2023-09-29

Contract Duration: 3,654 days

Daily Burn Rate: $12.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IGF::OT::IGF E: MCCONNELL PERFORMANCE BASED REMEDIATION, MCCONNELL AFB, KANSAS P2-400970

Place of Performance

Location: MCCONNELL AFB, SEDGWICK County, KANSAS, 67221

State: Kansas Government Spending

Plain-Language Summary

Department of Defense obligated $46.9 million to URS GROUP, INC. for work described as: IGF::OT::IGF E: MCCONNELL PERFORMANCE BASED REMEDIATION, MCCONNELL AFB, KANSAS P2-400970 Key points: 1. The contract's value appears reasonable when benchmarked against similar environmental remediation projects. 2. While awarded under full and open competition, the number of bidders suggests a moderately competitive landscape. 3. The long duration and firm-fixed-price structure indicate a predictable cost environment, mitigating some financial risk. 4. Performance is tied to remediation outcomes, aligning contractor incentives with environmental goals. 5. This contract falls within the broader environmental services sector, supporting critical infrastructure maintenance. 6. The absence of small business set-asides means direct opportunities for smaller firms are limited. 7. Oversight is likely managed through standard DoD contracting procedures and performance reviews.

Value Assessment

Rating: good

The contract's total value of $46.9 million over approximately 10 years suggests a significant but potentially fair price for long-term environmental remediation services. Benchmarking against similar large-scale remediation contracts within the Department of Defense indicates that the overall cost is within expected ranges. The firm-fixed-price (FFP) structure, while potentially leading to higher initial bids, provides cost certainty for the government over the contract's life, reducing the risk of cost overruns compared to cost-reimbursement contracts. The value appears to be a reasonable investment for ensuring environmental compliance and safety at a major Air Force base.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded using full and open competition, indicating that all responsible sources were permitted to submit bids. With six bidders participating, the competition level can be considered moderate. While more bidders could potentially drive prices lower, six offers suggest sufficient market interest and a reasonable degree of price discovery. The government received multiple proposals, allowing for comparison and selection of the best value offer.

Taxpayer Impact: The full and open competition, despite having six bidders, likely ensured that taxpayer funds were used efficiently by fostering a competitive environment that encouraged reasonable pricing for essential environmental services.

Public Impact

The primary beneficiaries are the U.S. Air Force and the McConnell Air Force Base community, ensuring a safe and compliant environment. The contract delivers critical environmental remediation services, addressing potential contamination and ensuring long-term ecological health. The geographic impact is localized to McConnell Air Force Base in Kansas. The contract supports a workforce involved in environmental engineering, remediation, and project management.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (over 10 years) could lead to potential scope creep or evolving environmental regulations impacting costs.
Firm-fixed-price contracts can sometimes incentivize contractors to cut corners if not rigorously monitored, though performance-based aspects may mitigate this.
Lack of specific small business participation goals might limit opportunities for smaller, specialized environmental firms.
The specific remediation challenges and their complexity are not detailed, which could hide underlying risks.
Reliance on a single contractor for an extended period could reduce flexibility in adopting new technologies or approaches.

Positive Signals

The contract is performance-based, directly linking payment to successful remediation outcomes, which aligns incentives.
Firm-fixed-price structure provides budget certainty for the government over the contract's life.
Awarded under full and open competition, suggesting a robust process for selecting the contractor.
The contractor, URS Group, Inc., has a track record in large-scale environmental projects.
The long duration allows for sustained focus and completion of complex, long-term remediation tasks.

Sector Analysis

This contract falls within the Environmental Remediation Services sector, a critical component of the broader environmental consulting and engineering industry. This sector is characterized by complex regulatory requirements, specialized technical expertise, and significant government spending, particularly for defense installations. The market size for environmental remediation is substantial, driven by historical contamination, ongoing industrial activity, and stringent environmental protection laws. Comparable spending benchmarks for large federal remediation projects often range in the tens to hundreds of millions of dollars, depending on the scope and duration.

Small Business Impact

This contract was not specifically set aside for small businesses, nor does it appear to have explicit subcontracting goals for small businesses mentioned in the provided data. This means that direct opportunities for small businesses to participate as prime contractors were limited to the initial full and open competition. While the prime contractor, URS Group, Inc., may engage small businesses as subcontractors, the absence of set-aside provisions or specific subcontracting targets suggests a potentially limited direct impact on the small business ecosystem for this particular award.

Oversight & Accountability

Oversight for this contract is likely managed through the Department of the Army's contracting and program management offices, with oversight potentially involving the Air Force base's environmental compliance staff. Accountability measures would be tied to the performance-based aspects of the contract, requiring the contractor to meet specific remediation milestones and environmental standards. Transparency is generally maintained through federal contract databases and reporting requirements, though detailed performance metrics may not always be publicly accessible. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Environmental Remediation Services
Defense Environmental Cleanup Program
Military Base Realignment and Closure (BRAC) Environmental Activities
Hazardous Waste Management
Site Remediation Contracts

Risk Flags

Long-term contract duration
Potential for unforeseen site conditions
Firm-fixed-price risk allocation
Moderate competition level (6 bidders)
No explicit small business set-aside

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $46.9 million to URS GROUP, INC.. IGF::OT::IGF E: MCCONNELL PERFORMANCE BASED REMEDIATION, MCCONNELL AFB, KANSAS P2-400970

Who is the contractor on this award?

The obligated recipient is URS GROUP, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $46.9 million.

What is the period of performance?

Start: 2013-09-27. End: 2023-09-29.

What is the track record of URS Group, Inc. in managing large-scale environmental remediation contracts for the Department of Defense?

URS Group, Inc., now part of AECOM, has a substantial history of managing complex environmental remediation projects for various government agencies, including the Department of Defense. Their experience spans decades and includes work on numerous military installations, addressing issues such as hazardous waste disposal, groundwater contamination, and soil remediation. They have been involved in large, multi-year contracts requiring extensive technical expertise, regulatory compliance, and project management capabilities. While specific performance details for every contract are not always public, their continued selection for significant projects suggests a generally positive track record in delivering required environmental services. However, like any large contractor, they may have faced challenges or scrutiny on specific projects, underscoring the importance of ongoing performance monitoring.

How does the $46.9 million total contract value compare to similar environmental remediation contracts awarded by the DoD?

The $46.9 million total contract value for McConnell AFB remediation services appears to be within the typical range for large, long-term environmental cleanup projects at major military installations. Contracts of this nature, especially those spanning over a decade and involving comprehensive site remediation (soil, groundwater, etc.), frequently reach tens of millions of dollars. For instance, similar contracts for Superfund site cleanups or extensive base remediation efforts have been awarded in the $50 million to $200 million range over their lifecycles. The value is influenced by factors such as the extent of contamination, the complexity of the remediation technologies required, regulatory requirements, and the duration of the contract. Given the 10-year duration and the nature of base-wide remediation, $46.9 million suggests a moderate scale relative to the largest federal environmental contracts.

What are the primary risks associated with a 10-year firm-fixed-price contract for environmental remediation?

A significant risk with a 10-year firm-fixed-price (FFP) contract for environmental remediation is the potential for unforeseen site conditions or evolving regulatory requirements that could dramatically increase the cost of performance beyond what was initially estimated. While FFP provides cost certainty, it places the risk of cost overruns on the contractor. If the contractor underestimated the scope or complexity, they might face financial losses, potentially impacting their ability to complete the work satisfactorily. Conversely, if the government's needs change significantly or new, more stringent regulations are imposed, the FFP structure might make it difficult or costly to modify the contract to address these changes. Another risk is that the contractor might be incentivized to use less effective or slower methods to manage costs, if performance metrics are not robustly defined and monitored.

How effective are performance-based contracts in ensuring successful environmental remediation outcomes?

Performance-based contracts (PBCs) are generally considered highly effective for ensuring successful environmental remediation outcomes because they directly tie contractor payment to achieving specific, measurable results. Instead of paying for effort or time, the government pays for completed milestones, cleanup standards met, or environmental quality improvements. This structure incentivizes the contractor to focus on efficiency, effectiveness, and timely completion of remediation tasks. For environmental projects, this can mean achieving target contaminant levels in soil or water, meeting regulatory deadlines, and ensuring long-term site stability. Robust performance metrics and quality assurance surveillance are crucial for PBCs to function optimally, ensuring that the 'performance' being paid for truly represents successful remediation and environmental protection.

What is the historical spending trend for environmental remediation services within the Department of Defense?

The Department of Defense has consistently been a major spender on environmental remediation services, driven by decades of industrial and military activities on its vast network of installations. Historical spending has been substantial, often in the billions of dollars annually, allocated towards cleaning up contaminated sites under programs like the Defense Environmental Restoration Program (DERP). Spending levels can fluctuate based on factors such as the pace of base closures (BRAC), the identification of new contamination issues, evolving regulatory standards, and budget appropriations. While specific annual figures vary, the DoD's commitment to environmental compliance and cleanup ensures a sustained and significant level of investment in remediation services over the long term.

What are the implications of awarding a large contract like this under 'full and open competition' versus a sole-source or limited competition?

Awarding a large contract under 'full and open competition' implies that the government actively sought bids from all responsible sources, fostering a competitive environment. This typically leads to better price discovery, potentially lower costs for the government, and access to a wider range of innovative solutions compared to sole-source or limited competition. Sole-source awards, justified only when a single provider meets specific, unique requirements, often result in higher prices due to the lack of alternatives. Limited competition, involving a restricted number of bidders, falls between these two extremes. For taxpayers, full and open competition is generally the most advantageous approach, maximizing the potential for value for money and ensuring fair market prices are obtained for goods and services.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Remediation and Other Waste Management Services › Remediation Services

Product/Service Code: NATURAL RESOURCES MANAGEMENT › NATURAL RESOURCES - OTHER SVCS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W9128F13R0020

Offers Received: 6

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: AECOM

Address: 12120 SHAMROCK PLZ STE 300, OMAHA, NE, 68154

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

Financial Breakdown

Contract Ceiling: $47,242,387

Exercised Options: $46,870,214

Current Obligation: $46,870,214

Actual Outlays: $607,731

Subaward Activity

Number of Subawards: 955

Total Subaward Amount: $379,675,997

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline