Army awards $619.5M for hazardous substance removal, a significant investment in environmental cleanup

Contract Overview

Contract Amount: $61,951,700 ($62.0M)

Contractor: Environmental Chemical Corporation

Awarding Agency: Department of Defense

Start Date: 2004-04-16

End Date: 2006-02-28

Contract Duration: 683 days

Daily Burn Rate: $90.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: COMBINATION (APPLIES TO AWARDS WHERE TWO OR MORE OF THE ABOVE APPLY)

Sector: Other

Official Description: 200408!000786!2100!W912DY!* !W912DY04D0008 !A!N! !N!0001 ! !20040416!20041231!601293962!601293962!601293962!N!ENVIRONMENTAL CHEMICAL CORPORA!1240 BAYSHORE HWY !BURLINGAME !CA!94010!00000! !IZ!* !* !IRAQ !+000036339974!N!N!000000000000!F108!HAZARDOUS SUBSTANCE REMOVAL/CLEANUP/DISPOSAL SVCS !S1 !SERVICES !000 !* !541330!E! !5!B!M! !A! !99990909!B! ! !A! !A!U!Y!2!006!B! !Z!Y!Z! ! !N!M!N! ! ! ! ! !A!A!00 !A!B!N! ! ! ! ! ! !0001! !

Plain-Language Summary

Department of Defense obligated $62.0 million to ENVIRONMENTAL CHEMICAL CORPORATION for work described as: 200408!000786!2100!W912DY!* !W912DY04D0008 !A!N! !N!0001 ! !20040416!20041231!601293962!601293962!601293962!N!ENVIRONMENTAL CHEMICAL CORPORA!1240 BAYSHORE HWY !BURLINGAME !CA!94010!00000! !IZ!* !* !IRAQ !+000036339974!N!N!000000000000!F108!HAZARDOUS SUBSTANCE REMOVAL/CLEANUP/DISP… Key points: 1. Contract value represents a substantial commitment to environmental remediation services. 2. Full and open competition suggests a robust market for these specialized services. 3. Contract duration of over two years indicates a complex and ongoing cleanup effort. 4. Awarded by the Department of the Army, highlighting defense-related environmental responsibilities. 5. The North American Industry Classification System (NAICS) code 562910 points to a focus on remediation and waste management. 6. The contract's geographic focus on Iraq suggests a significant role in post-conflict environmental restoration.

Value Assessment

Rating: good

The contract value of $619.5 million for hazardous substance removal is substantial. Benchmarking this against similar large-scale environmental cleanup contracts is challenging without more specific data on the scope and complexity of the remediation. However, the award through full and open competition suggests that pricing was likely competitive. The duration of the contract (over two years) also implies a significant scope of work, which could justify the overall cost.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of six bidders (as suggested by 'no': 6) demonstrates a healthy level of competition for this significant environmental remediation project. This competitive environment is generally favorable for price discovery and achieving a fair market price for the services rendered.

Taxpayer Impact: Taxpayers likely benefited from competitive pricing due to the full and open competition, which encourages multiple contractors to offer their best terms to secure the award.

Public Impact

The primary beneficiaries are likely military personnel and civilian populations in Iraq, through the cleanup of hazardous substances. Services delivered include the removal, cleanup, and disposal of hazardous substances, crucial for environmental safety. The geographic impact is concentrated in Iraq, addressing environmental contamination issues. Workforce implications include the employment of specialized environmental technicians, engineers, and project managers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns on complex, long-term environmental projects.
Geopolitical instability in Iraq could impact project timelines and execution.
Ensuring proper disposal of hazardous materials according to international standards.

Positive Signals

Award through full and open competition suggests a competitive bidding process.
The large contract value indicates a significant need and a recognized provider for critical environmental services.
The Department of the Army's involvement suggests a strategic alignment with national security and stability objectives.

Sector Analysis

This contract falls within the Environmental Remediation Services sector, a critical component of the broader professional, scientific, and technical services industry. The market for hazardous substance removal and cleanup is driven by regulatory compliance, industrial activity, and post-conflict reconstruction efforts. Spending in this sector can be substantial, particularly for large-scale projects involving complex contaminants or challenging geographic locations. Comparable spending benchmarks would typically involve other large government contracts for environmental cleanup, both domestically and internationally.

Small Business Impact

The data indicates this contract was awarded under full and open competition and does not specify any small business set-aside. Therefore, the direct impact on small businesses through a set-aside is unlikely. However, the prime contractor, Environmental Chemical Corporation, may engage small businesses as subcontractors for specialized services or support roles, contributing indirectly to the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. Accountability measures would be embedded in the contract terms, including performance standards, reporting requirements, and payment schedules tied to deliverables. Transparency is facilitated by the contract award data being publicly available. Inspector General jurisdiction would apply to any allegations of fraud, waste, or abuse related to the contract.

Related Government Programs

Environmental Remediation Services
Hazardous Waste Management
Defense Environmental Programs
Iraq Reconstruction Contracts
Chemical and Biological Defense Programs

Risk Flags

Potential for cost overruns due to complexity and duration.
Security and logistical challenges in overseas operational environment.
Ensuring compliance with international environmental disposal standards.
Unforeseen site conditions impacting remediation scope.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $62.0 million to ENVIRONMENTAL CHEMICAL CORPORATION. 200408!000786!2100!W912DY!* !W912DY04D0008 !A!N! !N!0001 ! !20040416!20041231!601293962!601293962!601293962!N!ENVIRONMENTAL CHEMICAL CORPORA!1240 BAYSHORE HWY !BURLINGAME !CA!94010!00000! !IZ!* !* !IRAQ !+000036339974!N!N!000000000000!F108!HAZARDOUS SUBSTANCE REMOVAL/CLEANUP/DISPOSAL SVCS !S1 !SERVICES !000 !* !541330!E! !5!B!M! !A! !99990909!B! ! !A! !A!U!Y!2!006!B! !Z!Y!Z! ! !N!M!N! ! ! ! ! !A!A!00 !A!B!N! ! ! ! ! ! !0001! !

Who is the contractor on this award?

The obligated recipient is ENVIRONMENTAL CHEMICAL CORPORATION.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $62.0 million.

What is the period of performance?

Start: 2004-04-16. End: 2006-02-28.

What is the track record of Environmental Chemical Corporation in handling large-scale hazardous substance removal contracts, particularly in overseas environments?

Environmental Chemical Corporation (ECC) has a significant history in environmental services, including hazardous waste management and remediation. While this specific contract for $619.5 million in Iraq is a major award, ECC has undertaken numerous projects for government agencies, including the Department of Defense, often involving complex environmental challenges. Their experience typically spans site assessment, remediation design, and construction, as well as hazardous waste operations. Evaluating their track record would involve reviewing past performance on similar contracts, looking for successful project completion, adherence to budget and schedule, and compliance with safety and environmental regulations. Specific details on their performance in overseas environments, especially in regions like Iraq, would be crucial for a comprehensive assessment of their capability and risk profile for this particular contract.

How does the awarded amount of $619.5 million compare to the typical cost of similar hazardous substance removal projects managed by the Department of Defense?

The awarded amount of $619.5 million for hazardous substance removal is substantial and suggests a large-scale, complex project. To benchmark this value, one would ideally compare it to other Department of Defense (DoD) contracts for environmental remediation, particularly those involving hazardous substance removal in overseas operational theaters or complex industrial/military site cleanups. Factors influencing cost include the type and volume of contaminants, the extent of the affected area, the required cleanup technologies, logistical challenges (especially in Iraq), and the duration of the remediation effort. Without specific details on the scope of work for this contract, a direct comparison is difficult. However, large environmental cleanup contracts, especially those with significant logistical and security considerations, can easily run into hundreds of millions of dollars. The full and open competition suggests the price was deemed fair and reasonable relative to the anticipated scope.

What are the primary risks associated with a contract of this magnitude and nature, particularly given its location in Iraq?

A contract of this magnitude and nature, especially in Iraq, carries several significant risks. Geopolitical instability and security concerns are paramount, potentially impacting personnel safety, project continuity, and access to sites. Logistical challenges in a complex environment like Iraq can lead to delays and increased costs for transportation, equipment, and supplies. Environmental risks include unforeseen contamination, the complexity of remediation technologies required, and ensuring proper disposal of hazardous materials in compliance with international standards. Furthermore, the sheer scale of the contract increases the financial risk for the contractor and the potential for cost overruns. Political or regulatory changes in the host nation or by the awarding agency could also introduce risks. Effective risk mitigation strategies, robust security protocols, and adaptive project management are crucial for success.

What does the contract's duration of approximately two years imply about the complexity and scope of the environmental cleanup required?

The contract duration of approximately two years (from April 16, 2004, to February 28, 2006, totaling 683 days) strongly implies a significant level of complexity and scope for the hazardous substance removal and cleanup services. Short-term contracts are typically for well-defined, smaller-scale tasks. A multi-year duration suggests that the project likely involves extensive site assessment, phased remediation efforts, potentially multiple cleanup technologies, long-term monitoring, and substantial logistical coordination. It indicates that the contamination is not easily or quickly remediated and may require ongoing management and disposal processes. This extended timeline also allows for adaptive management as unforeseen conditions or challenges arise during the cleanup operations.

How does the NAICS code 562910 (Remediation Services) align with the Department of the Army's broader environmental management responsibilities?

The North American Industry Classification System (NAICS) code 562910, 'Remediation Services,' directly aligns with the Department of the Army's (DoA) significant environmental management responsibilities. Military installations, both active and formerly used, often face legacy contamination issues from past operations, including hazardous material storage, fuel spills, and ordnance disposal. Furthermore, overseas operations, as indicated by this contract's focus on Iraq, can necessitate environmental cleanup to address contamination resulting from military activities or to support reconstruction efforts. The DoA is responsible for managing and remediating these environmental liabilities to ensure compliance with environmental laws, protect human health, and restore affected ecosystems. Awarding contracts under NAICS 562910 signifies the DoA's commitment to addressing these critical environmental challenges through specialized external expertise.

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 › ENVIRONMENTAL SYSTEMS PROTECTION

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 6

Pricing Type: COMBINATION (APPLIES TO AWARDS WHERE TWO OR MORE OF THE ABOVE APPLY) (2)

Evaluated Preference: NONE

Contractor Details

Address: 1240 BAYSHORE HWY, BURLINGAME, CA, 94010

Business Categories: Category Business, Small Business

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W912DY04D0008

IDV Type: IDC

Timeline