Army awards $223M contract for sewage treatment facilities maintenance, with a long-term outlook extending to 2054

Contract Overview

Contract Amount: $222,952,712 ($223.0M)

Contractor: Aqua Engineers Inc

Awarding Agency: Department of Defense

Start Date: 2004-08-09

End Date: 2054-02-28

Contract Duration: 18,100 days

Daily Burn Rate: $12.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIXED PRICE REDETERMINATION

Sector: Other

Official Description: 200411!002532!2100!W912CN!ACA, FORT SHAFTER !W912CN04C0014 !A!N! !Y! !P00003!20040809!20290105!007182967!007182967!007182967!N!AQUA ENGINEERS INC !3560 KOLOA ROAD STE A !LAWAI !HI!96765!69050!003!15!SCHOFIELD BARRACKS !HONOLULU !HAWAII !+000001158139!N!N!000000000000!Z244!MAINT/SEWAGE&WASTE FACILITIES !S1 !SERVICES !000 !* !221320!E! !3! ! !D! ! !99990909!B! ! !A! !A!N!A!2!003!A! !C!N!Z! ! !N!B!N!N! ! !A! !A!A!00 !A!B!N! ! ! ! ! ! !0001! !

Place of Performance

Location: WAHIAWA, HONOLULU County, HAWAII, 96786

State: Hawaii Government Spending

Plain-Language Summary

Department of Defense obligated $223.0 million to AQUA ENGINEERS INC for work described as: 200411!002532!2100!W912CN!ACA, FORT SHAFTER !W912CN04C0014 !A!N! !Y! !P00003!20040809!20290105!007182967!007182967!007182967!N!AQUA ENGINEERS INC !3560 KOLOA ROAD STE A !LAWAI !HI!96765!69050!003!15!SCHOFIELD BARRACKS !HONO… Key points: 1. Contract value of $222,952,712.25 for sewage treatment facilities maintenance. 2. Long contract duration of over 18,100 days (approx. 50 years) suggests a need for sustained services. 3. Awarded to AQUA ENGINEERS INC, a single contractor for the duration. 4. The contract type is Fixed Price Redetermination, which allows for price adjustments. 5. The North American Industry Classification System (NAICS) code 221320 points to a specialized service sector. 6. Geographic focus on Hawaii, specifically Schofield Barracks and Fort Shafter.

Value Assessment

Rating: fair

The total contract value of approximately $223 million over its extended period is substantial. Benchmarking this against similar long-term maintenance contracts for critical infrastructure like sewage treatment facilities is challenging due to the unique duration and potential for redetermination. The fixed-price redetermination structure implies that while an initial price is set, it can be adjusted, which may introduce cost variability over the contract's lifespan. Without more granular data on the scope of services and historical performance, a definitive value-for-money assessment is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The presence of 3 bids suggests a moderate level of competition for this specialized service. While full and open competition is generally favorable, the long duration and specific nature of sewage treatment facility maintenance might limit the pool of truly qualified bidders.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically drives down prices through competitive bidding. The fact that there were multiple bidders suggests that the government likely received a reasonably competitive price, although the long-term nature and redeterminable pricing could introduce future cost uncertainties.

Public Impact

The primary beneficiaries are the military personnel and their families stationed at Schofield Barracks and Fort Shafter in Hawaii, who rely on functional sewage treatment facilities. The contract ensures the continuous operation and maintenance of essential sewage and waste facilities, crucial for public health and environmental protection. The geographic impact is localized to the military installations in Hawaii, ensuring compliance with environmental regulations in that region. The contract supports specialized labor in the environmental services and facility maintenance sectors within Hawaii.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long-term contract duration (approx. 50 years) increases the risk of cost overruns due to unforeseen economic changes or technological obsolescence.
Fixed Price Redetermination pricing structure introduces uncertainty in final costs over the contract's extended period.
Potential for contractor performance degradation over such a long contract term without robust oversight.
Dependence on a single contractor for a critical infrastructure service for an extended period.

Positive Signals

Awarded through full and open competition, suggesting a competitive process initially.
Contract ensures long-term operational stability for critical sewage treatment infrastructure.
Specialized nature of the service may indicate a high level of contractor expertise.
Clear definition of services related to sewage and waste facilities maintenance.

Sector Analysis

This contract falls within the Utilities and Waste Management sector, specifically focusing on sewage treatment facilities. The market for such specialized maintenance services is often characterized by a limited number of highly qualified contractors capable of handling the technical requirements and regulatory compliance. Long-term contracts are common for essential public utilities and infrastructure to ensure continuity of service and predictable operational costs, though they require careful management to mitigate risks associated with extended performance periods.

Small Business Impact

The contract data indicates that this was not a small business set-aside. There is no explicit information regarding subcontracting plans for small businesses. Given the specialized nature of sewage treatment facility maintenance and the large contract value, it is possible that larger firms would be the primary awardees, with potential for smaller businesses to participate as subcontractors if specific, smaller scopes of work are outsourced.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and facility management divisions. The long duration necessitates continuous monitoring of performance, adherence to environmental regulations, and management of the redeterminable pricing clauses. Transparency is facilitated by contract award databases, but detailed performance metrics and oversight reports may not be publicly accessible. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Military Base Operations Support
Environmental Services Contracts
Public Utilities Maintenance
Infrastructure Management Contracts
Department of Defense Facilities Maintenance

Risk Flags

Long-term contract duration
Redeterminable pricing clause
Potential for cost escalation over time
Dependence on single contractor for critical infrastructure

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $223.0 million to AQUA ENGINEERS INC. 200411!002532!2100!W912CN!ACA, FORT SHAFTER !W912CN04C0014 !A!N! !Y! !P00003!20040809!20290105!007182967!007182967!007182967!N!AQUA ENGINEERS INC !3560 KOLOA ROAD STE A !LAWAI !HI!96765!69050!003!15!SCHOFIELD BARRACKS !HONOLULU !HAWAII !+000001158139!N!N!000000000000!Z244!MAINT/SEWAGE&WASTE FACILITIES !S1 !SERVICES !000 !* !221320!E! !3! ! !D! ! !99990

Who is the contractor on this award?

The obligated recipient is AQUA ENGINEERS 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 $223.0 million.

What is the period of performance?

Start: 2004-08-09. End: 2054-02-28.

What is the historical spending pattern for sewage treatment facility maintenance at Schofield Barracks and Fort Shafter?

Historical spending data for sewage treatment facility maintenance at these specific Army installations in Hawaii prior to this contract award is not directly available in the provided data. However, the award of a large, long-term contract valued at approximately $223 million suggests a significant and sustained need for these services. Typically, such long-term commitments are made when existing or projected needs are substantial and require a stable provider. Analyzing past budgets for facility maintenance at these bases would provide context, but this contract represents a forward-looking commitment for decades to come, indicating a strategic decision to secure long-term service provision rather than relying on short-term, potentially fluctuating annual appropriations.

How does the per-unit cost of this contract compare to similar sewage treatment facility maintenance contracts?

A direct per-unit cost comparison for this contract is challenging without specific details on the units of service (e.g., volume of sewage treated, number of maintenance hours, specific repair types). The contract is for 'MAINT/SEWAGE&WASTE FACILITIES' and uses a 'FIXED PRICE REDETERMINATION' type. The total value is $222,952,712.25 over a period potentially spanning from 2004 to 2054. Benchmarking would require identifying contracts with similar scope, duration, geographic location, and service level agreements. Given the specialized nature and long-term commitment, it's plausible that the negotiated price reflects economies of scale and long-term planning, but without comparable data points, assessing whether it represents optimal value-for-money on a per-unit basis is difficult. The redeterminable aspect also adds complexity to a static per-unit analysis.

What are the key performance indicators (KPIs) and service level agreements (SLAs) associated with this contract?

The provided data does not explicitly detail the Key Performance Indicators (KPIs) or Service Level Agreements (SLAs) for this contract. However, for a contract of this nature—maintenance of sewage and waste facilities for military installations—critical KPIs would likely include operational uptime of treatment plants, compliance with environmental discharge standards (e.g., EPA regulations), response times for emergency repairs, preventative maintenance completion rates, and water quality metrics. SLAs would define the expected standards for these KPIs, potentially including penalties for non-compliance and incentives for exceeding targets. Robust oversight by the Department of the Army would be essential to monitor adherence to these unstated but critical performance benchmarks.

What is the track record of AQUA ENGINEERS INC in performing similar government contracts?

Information regarding the specific track record of AQUA ENGINEERS INC in performing similar government contracts is not detailed in the provided data snippet. However, the award of a significant, long-term contract for essential infrastructure maintenance suggests that the company likely met the government's criteria for technical capability, financial stability, and past performance. To fully assess their track record, one would need to examine their contract history, including past performance evaluations, any disputes or claims, and the successful completion of similar projects, particularly those involving critical environmental infrastructure for government entities.

What are the potential risks associated with the long duration (nearly 50 years) of this contract?

The nearly 50-year duration of this contract presents several significant risks. Firstly, there's the risk of technological obsolescence; sewage treatment technologies may evolve, rendering current methods or equipment outdated, potentially leading to increased costs for upgrades or inefficiencies. Secondly, economic risks are substantial; inflation, changes in labor costs, and material prices over five decades can significantly impact the 'redeterminable' price, potentially leading to cost overruns for the government if not managed carefully. Thirdly, contractor performance risk increases with duration; maintaining consistent quality and responsiveness over such a long period can be challenging, requiring diligent oversight. Finally, changes in regulatory requirements or environmental standards could necessitate contract modifications, adding complexity and potential cost increases.

How does the 'Fixed Price Redetermination' contract type influence cost certainty for the government?

The 'Fixed Price Redetermination' (FPR) contract type offers a blend of price certainty and flexibility. Initially, a fixed price is established, providing a baseline cost. However, the 'redetermination' clause allows for the price to be adjusted, typically based on actual costs incurred or other agreed-upon factors, often at specific milestones or upon completion of certain phases. For the government, this means that while there's an initial estimate, the final cost is not definitively known until the redetermination process occurs. This can be advantageous if actual costs are lower than anticipated, but it introduces uncertainty and potential for price increases if costs escalate beyond initial projections, especially over a long contract duration like this one.

Industry Classification

NAICS: Utilities › Water, Sewage and Other Systems › Sewage Treatment Facilities

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SEALED BID

Offers Received: 3

Pricing Type: FIXED PRICE REDETERMINATION (A)

Evaluated Preference: NONE

Contractor Details

Address: 3560 KOLOA ROAD STE A, LAWAI, HI, 96765

Business Categories: Category Business, Small Business, Subchapter S Corporation

Financial Breakdown

Contract Ceiling: $497,490,497

Exercised Options: $497,490,497

Current Obligation: $222,952,712

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline