EPA awards $94M contract to CH2M HILL for environmental services in California

Contract Overview

Contract Amount: $94,185,401 ($94.2M)

Contractor: CH2M Hill Companies, Ltd.

Awarding Agency: Environmental Protection Agency

Start Date: 2003-09-15

End Date: 2008-09-30

Contract Duration: 1,842 days

Daily Burn Rate: $51.1K/day

Number of Offers Received: 4

Pricing Type: COST PLUS AWARD FEE

Sector: Other

Official Description: RESPONSE ACTION CONTRACT-REGION IX

Place of Performance

Location: SAN FRANCISCO, SAN FRANCISCO County, CALIFORNIA, 94105

State: California Government Spending

Plain-Language Summary

Environmental Protection Agency obligated $94.2 million to CH2M HILL COMPANIES, LTD. for work described as: RESPONSE ACTION CONTRACT-REGION IX Key points: 1. Contract value of $94.2 million over five years suggests significant, long-term environmental management needs. 2. The cost-plus award fee structure incentivizes performance but requires careful monitoring to ensure cost control. 3. Sole-source award raises questions about competition and potential impact on pricing and value. 4. The contract supports essential air, water, and solid waste management programs, indicating a critical public service. 5. Focus on California highlights the state's complex environmental challenges and the agency's commitment to addressing them. 6. The duration of the contract (1842 days) points to the sustained effort required for comprehensive environmental remediation and oversight.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific performance metrics and comparable sole-source awards. The cost-plus award fee (CPAF) structure allows for cost reimbursement plus a fee based on performance, which can be effective but also carries a risk of cost overruns if not managed tightly. The total award of $94.2 million over approximately five years averages to about $18.8 million annually. This figure needs to be assessed against the scope of services and the specific environmental challenges in California.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning CH2M HILL COMPANIES, LTD. was the only bidder considered. Sole-source procurements are typically used when only one responsible source is available or when there is a compelling justification for not seeking competition. The lack of competition here means that price discovery through market forces was bypassed, potentially leading to higher costs than if multiple bids had been solicited.

Taxpayer Impact: Taxpayers may not have received the benefit of competitive pricing, as the government did not have multiple offers to compare. This could result in a higher overall expenditure for the services rendered.

Public Impact

The primary beneficiaries are the residents and ecosystems of California, who will receive improved environmental protection services. Services delivered include the administration of air and water resource management, and solid waste management programs. The geographic impact is focused on California, addressing the state's specific environmental regulatory and operational needs. The contract supports federal environmental mandates and contributes to the overall health and safety of the region. Workforce implications include potential job creation within CH2M HILL and its subcontractors, particularly for environmental scientists, engineers, and technicians.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure, potentially impacting cost-effectiveness for taxpayers.
Cost-plus award fee structure requires diligent oversight to prevent potential cost escalations.
Lack of transparency in the sole-source justification process could obscure reasons for not seeking competition.
Contract duration of nearly five years necessitates ongoing performance monitoring to ensure sustained quality and value.

Positive Signals

CH2M HILL's established presence and expertise in environmental services likely ensure a high level of technical capability.
The contract addresses critical environmental protection needs, aligning with the EPA's core mission.
The award fee mechanism incentivizes contractor performance, potentially leading to superior service delivery.
Focus on California's environmental programs indicates a strategic allocation of resources to a high-need area.

Sector Analysis

The environmental services sector is a significant part of the federal contracting landscape, encompassing a wide range of activities from consulting and engineering to remediation and waste management. This contract falls within the broad category of environmental consulting and program administration. The EPA, as a major federal agency, consistently awards substantial contracts to manage and protect environmental resources. Comparable spending benchmarks would typically involve looking at other large-scale environmental management contracts awarded by the EPA or other agencies like the Army Corps of Engineers, often in the tens to hundreds of millions of dollars, depending on the scope and duration.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). As a sole-source award to a large corporation (CH2M HILL COMPANIES, LTD.), it is unlikely to involve significant subcontracting opportunities for small businesses unless explicitly mandated or pursued by the prime contractor. This contract does not appear to directly contribute to the small business ecosystem through set-asides or targeted subcontracting goals.

Oversight & Accountability

Oversight for this contract would primarily reside with the Environmental Protection Agency (EPA), specifically the contracting officer and program managers responsible for the administration of air and water resource and solid waste management programs. The cost-plus award fee structure necessitates robust oversight to ensure that costs are reasonable and that performance targets are met to earn the award fee. Transparency is generally facilitated through contract databases, but the specifics of the sole-source justification and ongoing performance reviews may not be fully public. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

EPA Superfund Program
EPA Clean Water Act Programs
EPA Clean Air Act Programs
EPA Resource Conservation and Recovery Act (RCRA) Programs
Department of the Interior Environmental Services Contracts
Army Corps of Engineers Environmental Remediation Contracts

Risk Flags

Sole-source award lacks competitive justification.
Cost-plus award fee structure requires vigilant oversight to control costs.
Contract duration is lengthy, necessitating sustained performance monitoring.
Potential for cost overruns due to CPAF structure.

Frequently Asked Questions

What is this federal contract paying for?

Environmental Protection Agency awarded $94.2 million to CH2M HILL COMPANIES, LTD.. RESPONSE ACTION CONTRACT-REGION IX

Who is the contractor on this award?

The obligated recipient is CH2M HILL COMPANIES, LTD..

Which agency awarded this contract?

Awarding agency: Environmental Protection Agency (Environmental Protection Agency).

What is the total obligated amount?

The obligated amount is $94.2 million.

What is the period of performance?

Start: 2003-09-15. End: 2008-09-30.

What is the track record of CH2M HILL COMPANIES, LTD. with the EPA and similar federal contracts?

CH2M HILL COMPANIES, LTD. (now Jacobs Engineering Group after acquisition) has a long history of working with the EPA and other federal agencies on large-scale environmental projects. Their experience typically includes engineering, design, construction management, and environmental consulting services. They have been involved in major environmental cleanup efforts, water infrastructure projects, and regulatory compliance support. Their track record with the EPA generally includes successful execution of complex contracts, though like any large contractor, they may have faced scrutiny or challenges on specific projects related to cost, schedule, or performance. A detailed review of their past performance ratings and any contract disputes would provide a more granular understanding of their reliability and effectiveness for this specific type of work.

How does the $94.2 million contract value compare to similar EPA environmental services contracts in California?

The $94.2 million contract value for five years of environmental services in California is substantial, reflecting the scale and complexity of environmental management in a large, populous state. To benchmark this, one would need to compare it against other EPA contracts for similar services (e.g., air and water resource management, solid waste programs) awarded within California or other large states during a comparable timeframe. Contracts for environmental consulting, remediation, and program administration can range widely, from a few million to hundreds of millions of dollars. Given the sole-source nature and the duration, this award appears to be a significant commitment, suggesting it covers a broad scope of critical EPA functions within the region. Without access to a detailed database of comparable sole-source awards and their specific scopes, a precise comparison is difficult, but the amount indicates a major program support contract.

What are the primary risks associated with a sole-source, cost-plus award fee contract for environmental services?

The primary risks associated with this contract structure are twofold. Firstly, the sole-source nature eliminates competitive pressure, which can lead to less favorable pricing for the government and potentially higher costs for taxpayers. It also raises concerns about whether the government fully explored all available sources or if there were sufficient justifications for bypassing competition. Secondly, the Cost-Plus Award Fee (CPAF) structure, while incentivizing performance, carries inherent risks of cost escalation. If performance metrics are not clearly defined, rigorously monitored, or if the contractor's cost accounting is not meticulously audited, costs can exceed initial estimates. The government must maintain strong oversight to ensure that costs are reasonable and that the award fee is earned based on genuine performance improvements, not just baseline service delivery.

How effective are EPA's administration of air and water resource and solid waste management programs likely to be under this contract?

The effectiveness of EPA's programs under this contract hinges on several factors. CH2M HILL's technical expertise and experience in environmental management are crucial. The clarity and achievability of the performance standards tied to the award fee will significantly influence the contractor's focus and the resulting program outcomes. Robust oversight by the EPA contracting officer and technical representatives is essential to ensure that services are delivered as specified and that environmental goals are met. The sole-source nature, however, introduces a potential risk to optimal effectiveness if it means less innovative solutions or less cost-efficient operations compared to what a competitive environment might yield. Ultimately, effectiveness will be a function of the contractor's execution, the EPA's management, and the specific environmental challenges being addressed.

What are the historical spending patterns for similar environmental services contracts by the EPA in Region IX (California)?

Historical spending patterns for similar environmental services contracts by the EPA in Region IX (California) typically show significant and consistent investment. The EPA manages numerous programs related to air quality, water quality, hazardous waste, and site remediation, many of which require extensive contractor support. Contracts in this region often run into the tens or hundreds of millions of dollars annually, reflecting the state's large population, industrial base, and complex environmental regulatory landscape. Spending can fluctuate based on specific initiatives, federal budget allocations, and the lifecycle of major projects (e.g., large-scale cleanups). While this specific $94 million contract represents a substantial single award, it aligns with the general trend of significant federal spending on environmental management in California.

Industry Classification

NAICS: Public Administration › Administration of Environmental Quality Programs › Administration of Air and Water Resource and Solid Waste Management Programs

Product/Service Code: ARCHITECT/ENGINEER SERVICES › ARCH-ENG SVCS - GENERAL

Contractor Details

Parent Company: Jacobs Engineering Group Inc (UEI: 074103508)

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $77,168,234

Exercised Options: $200,692,504

Current Obligation: $94,185,401

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Timeline