Army's $200M+ demolition contract for Blue Grass site awarded to Bechtel Parsons Blue Grass JV

Contract Overview

Contract Amount: $200,941,967 ($200.9M)

Contractor: Bechtel Parsons Blue Grass, a Joint Venture

Awarding Agency: Department of Defense

Start Date: 2004-09-30

End Date: 2024-09-30

Contract Duration: 7,305 days

Daily Burn Rate: $27.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST NO FEE

Sector: Construction

Official Description: 200412!002257!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !DAAA0903D0023 !A!N! !Y!0004 ! !20040930!20130613!132084539!132084539!132084539!N!BECHTEL PARSONS BLUE GRASS, A !50 BEALE ST !SAN FRANCISCO !CA!94105!67000!075!06!SAN FRANCISCO !SAN FRANCISCO !CALIFORNIA!+000004530000!N!N!000000000000!P400!DEMOLITION OF BUILDINGS !C2 !CONSTRUCTION !000 !* !562211!E! !5!B!S! ! ! !99990909!B! ! !A! !A!N!S!2!002!B! !D!Y!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! ! ! ! !0001! !

Place of Performance

Location: RICHMOND, MADISON County, KENTUCKY, 40475

State: Kentucky Government Spending

Plain-Language Summary

Department of Defense obligated $200.9 million to BECHTEL PARSONS BLUE GRASS, A JOINT VENTURE for work described as: 200412!002257!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !DAAA0903D0023 !A!N! !Y!0004 ! !20040930!20130613!132084539!132084539!132084539!N!BECHTEL PARSONS BLUE GRASS, A !50 BEALE ST !SAN FRANCISCO !CA!94105!67000!075!06!SAN FRANCISCO !SAN FRANCISCO !CALIFORNIA!+000004530000!N!N!… Key points: 1. Contract value exceeds $200 million, indicating a significant investment in site remediation. 2. The contract was awarded under full and open competition, suggesting a robust bidding process. 3. The duration of the contract (over 20 years) points to a long-term commitment to the project. 4. The work involves demolition of buildings, a critical step in environmental cleanup. 5. The contract's focus on hazardous waste treatment and disposal highlights environmental and safety considerations. 6. The prime contractor, Bechtel Parsons Blue Grass, is a joint venture, potentially bringing specialized expertise.

Value Assessment

Rating: good

The total contract value of over $200 million for demolition and hazardous waste disposal appears substantial. Benchmarking against similar large-scale environmental remediation projects is necessary for a precise value-for-money assessment. However, the 'COST NO FEE' contract type suggests that the government aims to control costs by reimbursing the contractor for actual expenses without an additional profit margin, which can be a cost-saving measure if managed effectively. The long duration of the contract also implies potential for cost efficiencies through sustained operations.

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 a bid. The presence of multiple bidders in such a competitive environment typically drives down prices and encourages innovation. The specific number of bidders is not provided in the data, but the designation suggests a healthy level of market interest and a good opportunity for price discovery.

Taxpayer Impact: Taxpayers benefit from a competitive bidding process that is designed to secure the best possible price and quality for the services rendered. Full and open competition generally leads to more cost-effective outcomes compared to sole-source or limited competition scenarios.

Public Impact

The primary beneficiaries are the U.S. Army and the Department of Defense, who are responsible for the safe and environmentally sound closure of the Blue Grass Army Depot. The services delivered include the demolition of buildings and the treatment and disposal of hazardous waste, crucial for environmental remediation. The geographic impact is concentrated in Kentucky, specifically at the Blue Grass Army Depot. The project has implications for the local workforce, potentially creating or sustaining jobs in construction, demolition, and environmental services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (over 20 years) could lead to cost overruns if not managed tightly.
The 'COST NO FEE' contract type, while aiming for cost control, requires rigorous oversight to prevent inflated expenses.
Demolition of hazardous sites inherently carries environmental and safety risks that need continuous mitigation.

Positive Signals

Awarded under full and open competition, suggesting a competitive pricing environment.
The joint venture structure may bring specialized expertise to complex demolition and hazardous waste challenges.
The contract addresses critical environmental remediation needs at a military installation.

Sector Analysis

This contract falls within the Construction and Environmental Services sectors. The demolition of buildings and hazardous waste disposal are specialized services often contracted out by government agencies. The market for such services is significant, driven by military base closures, environmental regulations, and industrial site cleanups. Comparable spending benchmarks would involve looking at other large-scale demolition and hazardous waste remediation contracts awarded by federal agencies, particularly for military installations.

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 specifically for small business set-asides related to this award. However, the prime contractor may still engage small businesses as subcontractors for various aspects of the work, contributing to the broader 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 include performance monitoring, milestone reviews, and adherence to contract terms. Transparency is generally 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
Military Base Realignment and Closure (BRAC) Projects
Hazardous Waste Management
Demolition Services Contracts
Department of Defense Construction Contracts

Risk Flags

Potential for cost overruns due to long contract duration.
Environmental risks associated with hazardous waste handling.
Need for stringent oversight of 'COST NO FEE' contract expenditures.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $200.9 million to BECHTEL PARSONS BLUE GRASS, A JOINT VENTURE. 200412!002257!2100!W52P1J!U.S. ARMY INDUSTRIAL OPERATIONS !DAAA0903D0023 !A!N! !Y!0004 ! !20040930!20130613!132084539!132084539!132084539!N!BECHTEL PARSONS BLUE GRASS, A !50 BEALE ST !SAN FRANCISCO !CA!94105!67000!075!06!SAN FRANCISCO !SAN FRANCISCO !CALIFORNIA!+000004530000!N!N!000000000000!P400!DEMOLITION OF BUILDINGS !C2 !CONSTRUCTION !000 !* !562211!E! !5!B!S! ! ! !99990909!B! ! !A! !A!N!S!2!002!B! !D!Y!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! ! ! ! !0001! !

Who is the contractor on this award?

The obligated recipient is BECHTEL PARSONS BLUE GRASS, A JOINT VENTURE.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $200.9 million.

What is the period of performance?

Start: 2004-09-30. End: 2024-09-30.

What is the historical spending pattern for demolition and hazardous waste disposal at the Blue Grass Army Depot?

Historical spending data for demolition and hazardous waste disposal at the Blue Grass Army Depot prior to this contract award is not directly available in the provided data snippet. However, the award of a contract valued at over $200 million with a duration extending to 2024 (originally 2013, with potential modifications) suggests a significant and ongoing commitment to addressing environmental liabilities at the site. Such large-scale contracts are typically initiated after extensive environmental assessments and planning phases, indicating that substantial resources have likely been allocated to these activities over time. To fully understand the historical spending pattern, one would need to access historical contract databases and budget allocations specifically for the Blue Grass Army Depot's environmental programs.

How does the 'COST NO FEE' contract type compare to other contract types in terms of risk and potential cost savings for the government?

The 'COST NO FEE' (CNF) contract type is a variation of a cost-reimbursement contract where the contractor is reimbursed for allowable costs but receives no fee or profit. This type is typically used when the contractor is a non-profit organization or when the government has a strong interest in minimizing contractor profit, such as in certain research and development or public service-oriented projects. For the government, the primary benefit is the elimination of contractor profit, which can lead to cost savings. However, the risk shifts more towards the government, as it bears the full cost of performance, including any cost overruns. Effective oversight is crucial to ensure that costs are reasonable and allocable. Compared to fixed-price contracts, CNF offers less cost certainty for the government but can be advantageous when the scope of work is uncertain or when profit margins are a significant concern.

What are the specific environmental risks associated with the demolition of buildings at the Blue Grass Army Depot?

The Blue Grass Army Depot, like many former military installations, likely contains buildings that may have housed or been exposed to hazardous materials during their operational life. Specific environmental risks associated with demolition include the potential release of asbestos-containing materials (ACMs), lead-based paint (LBP), polychlorinated biphenyls (PCBs), and residual chemicals or contaminants in building materials or soils. Improper demolition techniques could lead to dust generation, soil contamination, and groundwater pollution. Furthermore, the presence of unexploded ordnance (UXO) is a potential risk at former military sites, although this is more commonly associated with land clearing than building demolition itself. The contract's focus on 'Hazardous Waste Treatment and Disposal' directly addresses these risks, implying that containment, removal, and proper disposal protocols are integral to the demolition process.

What is the typical track record of joint ventures like Bechtel Parsons Blue Grass in managing large-scale demolition and environmental projects?

Joint ventures, such as Bechtel Parsons Blue Grass, are often formed to pool the resources, expertise, and bonding capacity of multiple companies to undertake large, complex projects. Bechtel and Parsons are both well-established engineering and construction firms with extensive experience in major infrastructure, defense, and environmental projects globally. Their joint venture likely leverages this combined experience. Typically, such joint ventures are successful in managing large-scale demolition and environmental projects because they can bring specialized technical skills, advanced equipment, and robust safety and environmental management systems. However, the success of any joint venture also depends on effective collaboration, clear communication, and strong project management from all partners involved.

How does the PSC code '562211' (Hazardous Waste Treatment and Disposal) inform the scope and complexity of this contract?

The Product Service Code (PSC) '562211' specifically designates 'Hazardous Waste Treatment and Disposal.' This code clearly indicates that a primary and critical component of this contract involves the management, treatment, and disposal of hazardous materials. This implies that the scope extends beyond simple demolition; it includes the identification, segregation, packaging, transportation, treatment (e.g., neutralization, stabilization), and final disposal of hazardous waste generated during the demolition process. The complexity arises from stringent regulatory requirements (e.g., EPA, RCRA), the need for specialized facilities and personnel, rigorous safety protocols, and detailed tracking and documentation to ensure compliance and environmental protection. This PSC code underscores the environmental remediation aspect of the contract.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Waste Treatment and Disposal › Hazardous Waste Treatment and Disposal

Product/Service Code: SALVAGE SERVICES › DEMOLITION OF BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: COST NO FEE (S)

Evaluated Preference: NONE

Contractor Details

Address: 830 EASTERN BYPASS STE 106, RICHMOND, KY, 40475

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

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: DAAA0903D0023

IDV Type: IDC

Timeline