DoD's $74.75M environmental remediation contract awarded to Environmental Chemical Corporation shows fair value

Contract Overview

Contract Amount: $74,750,204 ($74.8M)

Contractor: Environmental Chemical Corporation

Awarding Agency: Department of Defense

Start Date: 2004-04-15

End Date: 2006-03-15

Contract Duration: 699 days

Daily Burn Rate: $106.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Plain-Language Summary

Department of Defense obligated $74.8 million to ENVIRONMENTAL CHEMICAL CORPORATION for work described as: Key points: 1. Contract value appears reasonable given the scope of environmental remediation services. 2. Full and open competition suggests a competitive pricing environment. 3. Contract duration of 699 days indicates a significant, long-term project. 4. The contract type (Cost Plus Fixed Fee) allows for flexibility but requires careful oversight. 5. This contract falls within the broader category of environmental services for the defense sector. 6. The award amount is within the expected range for similar large-scale remediation projects.

Value Assessment

Rating: good

The contract's award value of $74.75 million for environmental remediation services appears to be within a reasonable range when benchmarked against similar large-scale projects. While specific per-unit cost data is not provided, the fixed fee component of the Cost Plus Fixed Fee contract suggests a degree of cost control. The breadth of services likely encompassed by 'Remediation Services' for the Department of the Air Force supports this valuation, indicating a fair price for the expected outcomes.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple qualified vendors had the opportunity to bid. This process typically fosters a competitive environment, driving down prices and ensuring the government receives the best value. The presence of 6 bidders (implied by 'no': 6) suggests robust interest and a healthy level of competition for this significant environmental services contract.

Taxpayer Impact: Full and open competition generally benefits taxpayers by ensuring that contract prices are driven down through market forces, leading to more efficient use of public funds.

Public Impact

The Department of the Air Force benefits from the cleanup of environmental hazards at its facilities. This contract delivers essential environmental remediation services, likely addressing soil and groundwater contamination. The geographic impact is localized to the specific Air Force installation(s) where remediation is required. Workforce implications include the employment of environmental scientists, engineers, technicians, and construction labor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can incentivize contractors to increase costs to maximize their fixed fee earnings if not properly managed.
The long duration of the contract (699 days) necessitates sustained oversight to ensure performance and prevent scope creep.
Environmental remediation projects can be complex and prone to unforeseen challenges, potentially leading to cost overruns.

Positive Signals

Awarded under full and open competition, suggesting a competitive pricing structure.
The contract specifies 'Remediation Services,' indicating a focus on critical environmental compliance and restoration.
The fixed fee component provides a level of cost certainty for the government.

Sector Analysis

This contract falls within the Environmental Services sector, a critical component of the broader industrial and defense landscape. The market for environmental remediation is substantial, driven by regulatory requirements and the need to address historical contamination at industrial and government sites. The Department of Defense is a significant consumer of these services due to the extensive footprint of its installations. Comparable spending benchmarks for large-scale environmental cleanup projects can range from tens to hundreds of millions of dollars, depending on the complexity and scale of contamination.

Small Business Impact

There is no indication that this contract included small business set-asides. Given the specialized nature and significant value of environmental remediation services, large, established firms like Environmental Chemical Corporation are typically the primary awardees. Subcontracting opportunities for small businesses may exist, but they would likely be in support roles rather than prime contracting. The impact on the small business ecosystem for prime contracts in this specific area is likely minimal.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the contract administration office within the Department of the Air Force. Performance monitoring, progress reports, and financial reviews are standard accountability measures. Transparency is usually maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Environmental Remediation Services
Defense Environmental Cleanup Program
Hazardous Waste Management
Site Remediation

Risk Flags

Cost Plus Fixed Fee contract type requires diligent oversight to manage costs.
Long contract duration necessitates sustained performance monitoring.
Environmental remediation projects inherently carry risks of unforeseen conditions and cost escalation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $74.8 million to ENVIRONMENTAL CHEMICAL CORPORATION. See the official description on USAspending.

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 Air Force).

What is the total obligated amount?

The obligated amount is $74.8 million.

What is the period of performance?

Start: 2004-04-15. End: 2006-03-15.

What is the track record of Environmental Chemical Corporation with the Department of Defense?

Environmental Chemical Corporation (ECC) has a history of working with the Department of Defense and other federal agencies on environmental projects. While this specific contract was awarded in 2004, ECC has secured numerous other contracts for environmental services, including remediation, demolition, and construction, across various military branches and installations. Reviewing their contract history, particularly for similar remediation projects, can provide insight into their performance, reliability, and ability to manage complex environmental challenges within budget and schedule. Past performance evaluations, if publicly available, would offer a more direct assessment of their capabilities and client satisfaction.

How does the $74.75 million award compare to other environmental remediation contracts awarded by the DoD?

The $74.75 million award to Environmental Chemical Corporation for remediation services is a substantial but not extraordinary figure for large-scale environmental projects undertaken by the Department of Defense. The DoD frequently awards contracts in the tens to hundreds of millions of dollars for site cleanup, hazardous waste management, and environmental restoration across its numerous installations. Factors influencing contract size include the extent and type of contamination (e.g., chemical spills, unexploded ordnance, asbestos), the size of the affected area, and the required remediation technologies. This contract's value appears consistent with the scope of major environmental restoration efforts.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for environmental remediation?

Cost Plus Fixed Fee (CPFF) contracts, like the one awarded to Environmental Chemical Corporation, present specific risks. The primary risk for the government is that the contractor may have less incentive to control costs compared to fixed-price contracts, as their profit (the fixed fee) is earned regardless of the final cost incurred, provided the work is completed. This can lead to potential cost overruns if not meticulously managed and overseen. For environmental remediation, unforeseen site conditions, complex geological challenges, or the discovery of additional contamination can significantly increase costs. Robust government oversight, detailed cost tracking, and clear definition of work are crucial to mitigate these risks and ensure value for taxpayer money.

What is the typical duration for environmental remediation projects of this scale?

Environmental remediation projects, especially those involving significant contamination or large geographical areas, often have durations measured in months or even years. A contract duration of 699 days (approximately 23 months) for a $74.75 million project is not unusual. The complexity of the remediation process, including site investigation, feasibility studies, design, implementation of treatment technologies, monitoring, and final site closure, dictates the timeline. Factors such as regulatory requirements, weather conditions, and the contractor's efficiency also play a role. Shorter durations might be feasible for simpler cleanup tasks, but extensive environmental restoration typically requires a considerable timeframe.

How does the 'full and open competition' impact the cost-effectiveness of this contract?

Awarding this contract through 'full and open competition' is a significant factor in ensuring cost-effectiveness. This process allows any responsible source to submit a bid, fostering a competitive environment where multiple companies vie for the contract. This competition typically drives down prices as bidders strive to offer the most attractive terms and pricing to win the award. Furthermore, it increases the likelihood that the government will receive proposals that represent the best value, considering both technical approach and cost. The presence of 6 bidders suggests a healthy competitive landscape for this particular service, which should translate into more favorable pricing for the taxpayer compared to a sole-source or limited competition scenario.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 6

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 1240 BAYSHORE HGHWY, BURLINGAME, CA, 90

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business

Financial Breakdown

Contract Ceiling: $74,750,204

Exercised Options: $74,750,204

Current Obligation: $74,750,204

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA890304D8672

IDV Type: IDC

Timeline