Army awards $222M contract for levee repairs, with APTIM FEDERAL SERVICES, LLC leading the effort

Contract Overview

Contract Amount: $222,061,839 ($222.1M)

Contractor: Aptim Federal Services, LLC

Awarding Agency: Department of Defense

Start Date: 2019-12-23

End Date: 2025-05-31

Contract Duration: 1,986 days

Daily Burn Rate: $111.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: COST PLUS FIXED FEE

Sector: Construction

Official Description: L-575 INTERIM/FINAL LEVEE REPAIRS

Place of Performance

Location: PERCIVAL, FREMONT County, IOWA, 51648

State: Iowa Government Spending

Plain-Language Summary

Department of Defense obligated $222.1 million to APTIM FEDERAL SERVICES, LLC for work described as: L-575 INTERIM/FINAL LEVEE REPAIRS Key points: 1. The contract value of over $222 million indicates a significant investment in infrastructure resilience. 2. The use of 'Full and Open Competition' suggests a robust bidding process, potentially leading to better pricing. 3. The contract duration of nearly 2000 days points to a long-term commitment to infrastructure maintenance. 4. The 'Cost Plus Fixed Fee' contract type requires careful monitoring to ensure cost control. 5. The project's focus on levee repairs highlights critical infrastructure needs in flood-prone areas. 6. The award to a single contractor, APTIM FEDERAL SERVICES, LLC, warrants scrutiny of their capacity and performance.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific details on the scope of repairs and the geographic locations of the levees. However, the substantial award amount suggests a significant undertaking. The 'Cost Plus Fixed Fee' structure necessitates close oversight to ensure the fixed fee remains reasonable relative to the effort and that costs are managed effectively. Comparing this to similar large-scale disaster recovery or infrastructure repair contracts would provide a clearer picture of value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition,' indicating that all responsible sources were permitted to submit a bid. With 6 bidders identified, this suggests a competitive environment. A higher number of bidders generally correlates with more competitive pricing and a wider range of technical solutions. The agency's selection process likely involved evaluating both price and technical proposals to determine the best value.

Taxpayer Impact: A competitive bidding process like this is beneficial for taxpayers as it drives down costs through market forces and encourages contractors to offer their best pricing and performance to win the contract.

Public Impact

Residents and businesses in flood-prone areas of Iowa will benefit from improved levee systems, enhancing safety and reducing the risk of damage. The contract will support critical infrastructure maintenance and repair services, ensuring the integrity of vital flood control structures. The geographic impact is primarily focused on Iowa, addressing specific regional needs for disaster preparedness and mitigation. The project is expected to create or sustain jobs in the construction and engineering sectors within the affected region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'Cost Plus Fixed Fee' (CPFF) contract type can incentivize contractors to incur more costs if the fixed fee is not adequately tied to performance metrics or if oversight is insufficient.
The long duration of the contract (1986 days) increases the risk of cost overruns due to potential changes in material prices, labor costs, or unforeseen site conditions over time.
Reliance on a single contractor for such a large and critical infrastructure project raises concerns about potential performance issues or lack of flexibility if circumstances change.
The absence of specific performance metrics or award fee structures in the provided data makes it difficult to assess how contractor performance will be incentivized and measured.
The specific nature of 'interim/final levee repairs' could imply a response to ongoing or past damage, suggesting potential for recurring needs or the complexity of the underlying issues.

Positive Signals

The award was made following 'Full and Open Competition,' indicating a robust and fair bidding process that likely resulted in a competitive price.
The involvement of multiple bidders (6) suggests a healthy market for these services and provides a basis for comparison of capabilities and pricing.
The contract is for critical infrastructure repair, addressing essential public safety and disaster mitigation needs.
The Department of the Army's engagement in this project signifies a commitment to maintaining vital infrastructure, potentially for military readiness or civilian protection.
The selection of APTIM FEDERAL SERVICES, LLC, implies they met the technical and financial qualifications required for this complex project.

Sector Analysis

This contract falls within the Construction and Engineering sector, specifically focusing on infrastructure repair and maintenance. The market for large-scale civil engineering projects, particularly those related to disaster recovery and flood control, is substantial. Government contracts often represent a significant portion of this market due to the scale and funding required for public infrastructure. Comparable spending benchmarks would involve looking at other large federal or state contracts for dam, levee, or coastal defense system repairs.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses arising from a small business set-aside. However, the prime contractor, APTIM FEDERAL SERVICES, LLC, may still engage small businesses as subcontractors to fulfill portions of the work, depending on their own subcontracting plans and the nature of the services required. Analysis of their subcontracting reports would be necessary to determine the extent of small business participation.

Oversight & Accountability

Oversight for this contract will likely be managed by the contracting officer and the relevant program management office within the Department of the Army. Accountability measures would be embedded in the contract terms, including performance standards, delivery schedules, and payment milestones. Transparency is typically facilitated through contract award databases and reporting requirements. The Inspector General's office may conduct audits or investigations if specific concerns regarding fraud, waste, or abuse arise.

Related Government Programs

US Army Corps of Engineers Civil Works Programs
FEMA Hazard Mitigation Grant Program
Infrastructure Investment and Jobs Act (IIJA) funded projects
National Flood Insurance Program (NFIP)
Disaster Relief and Emergency Supplemental Appropriations

Risk Flags

Cost Overrun Risk due to CPFF structure and long duration
Performance Monitoring Challenges for long-term infrastructure project
Potential for Scope Creep over the contract's extended timeline
Inflationary impact on costs over 5.5 years

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $222.1 million to APTIM FEDERAL SERVICES, LLC. L-575 INTERIM/FINAL LEVEE REPAIRS

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 Army).

What is the total obligated amount?

The obligated amount is $222.1 million.

What is the period of performance?

Start: 2019-12-23. End: 2025-05-31.

What is the track record of APTIM FEDERAL SERVICES, LLC on similar large-scale infrastructure repair contracts with the federal government?

APTIM FEDERAL SERVICES, LLC has a history of performing large federal contracts, including those involving infrastructure repair, environmental services, and base operations support. Their experience often spans disaster recovery and resilience projects. To assess their track record specifically for levee repairs, a review of their past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS) on similar projects would be crucial. This would highlight their timeliness, cost control, quality of work, and overall management capabilities. Examining their portfolio for projects of comparable size and complexity to this $222 million award would provide further insight into their capacity and expertise in handling such significant undertakings.

How does the 'Cost Plus Fixed Fee' (CPFF) structure compare to other contract types for levee repair projects, and what are the associated risks?

The 'Cost Plus Fixed Fee' (CPFF) contract type is often used when the scope of work is not precisely defined or when there is uncertainty about the costs involved, such as in complex repair or R&D projects. In a CPFF contract, the contractor is reimbursed for allowable costs plus a fixed fee representing profit. Compared to 'Fixed Price' contracts, CPFF offers more flexibility but carries a higher risk of cost overruns for the government if costs escalate beyond initial estimates. The fixed fee, however, provides a ceiling on the contractor's profit. For levee repairs, where unforeseen ground conditions or material availability can impact costs, CPFF can be appropriate. However, it necessitates robust government oversight to monitor costs, ensure efficiency, and prevent contractor overspending. Other contract types like 'Cost Plus Incentive Fee' (CPIF) could offer better value by incentivizing cost savings.

What is the historical spending trend for levee repair and maintenance contracts awarded by the Department of the Army or Army Corps of Engineers?

Historical spending on levee repair and maintenance by the Department of the Army, particularly through the Army Corps of Engineers (USACE), has been substantial and often fluctuates based on the severity of weather events, natural disasters, and federal infrastructure funding initiatives. USACE manages a vast portfolio of civil works projects, including flood control and coastal protection systems, which inherently involve significant investment in levee maintenance and repair. Annual budgets allocated to these programs can range from hundreds of millions to billions of dollars, depending on congressional appropriations and emergency funding needs. Analyzing past appropriations and contract awards for similar projects would reveal trends related to specific regions, types of repairs (e.g., interim vs. permanent), and the overall federal commitment to maintaining these critical infrastructure assets.

How does the number of bidders (6) in this 'Full and Open Competition' impact the potential value for money compared to contracts with fewer bidders?

A 'Full and Open Competition' with six bidders generally indicates a healthy level of market interest and competition for the contract. Generally, a higher number of bidders tends to drive down prices as companies compete to win the award. This increased competition can lead to better value for money for the government, as contractors are incentivized to offer more competitive pricing and potentially superior technical solutions to secure the contract. Conversely, contracts with fewer bidders, or those competed under limited or sole-source justifications, may result in higher prices due to reduced competitive pressure. Therefore, six bidders suggest a favorable environment for achieving good value, although the specific pricing and technical proposals would need to be analyzed to confirm this.

What are the potential risks associated with the long contract duration (1986 days) for levee repairs, and what mitigation strategies are typically employed?

A contract duration of 1986 days (approximately 5.5 years) for levee repairs presents several potential risks. These include: 1) Escalating costs due to inflation in labor, materials, and equipment over the extended period. 2) Scope creep or changes in requirements as the project progresses or as new engineering standards emerge. 3) Contractor performance degradation over time, potentially due to team turnover or loss of focus. 4) Difficulty in adapting to unforeseen environmental conditions or new threats that may arise during the contract term. Mitigation strategies typically involve: incorporating economic price adjustment clauses for materials, establishing clear change order procedures, implementing robust performance monitoring and management systems, and potentially including options for contract renewal or modification based on performance and evolving needs. Regular reviews and stakeholder engagement are also crucial.

Industry Classification

NAICS: Construction › Nonresidential Building Construction › Commercial and Institutional Building 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

Solicitation ID: W9128F19R0043

Offers Received: 6

Pricing Type: COST PLUS FIXED FEE (U)

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: $222,061,839

Exercised Options: $222,061,839

Current Obligation: $222,061,839

Actual Outlays: $32,766,928

Subaward Activity

Number of Subawards: 28

Total Subaward Amount: $68,564,584

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W9128F20D0003

IDV Type: IDC

Timeline