DoD's $66.4M environmental remediation contract awarded to Laguna Construction Company, Inc. shows fair value
Contract Overview
Contract Amount: $66,449,305 ($66.4M)
Contractor: Laguna Construction Company, Inc
Awarding Agency: Department of Defense
Start Date: 2005-07-12
End Date: 2010-04-15
Contract Duration: 1,738 days
Daily Burn Rate: $38.2K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 4
Pricing Type: COST PLUS FIXED FEE
Sector: Other
Plain-Language Summary
Department of Defense obligated $66.4 million to LAGUNA CONSTRUCTION COMPANY, INC for work described as: Key points: 1. The contract's value appears reasonable when benchmarked against similar environmental remediation projects. 2. Competition was robust, suggesting a competitive pricing environment. 3. Performance risks were managed through contract type and oversight. 4. The contract duration of nearly five years allowed for comprehensive project execution. 5. This contract falls within the broader category of environmental services for the Department of Defense.
Value Assessment
Rating: good
The total award amount of $66.4 million for environmental remediation services over approximately five years appears to be within a reasonable range when compared to similar large-scale environmental cleanup contracts. The Cost Plus Fixed Fee (CPFF) contract type, while carrying some risk of cost overruns, is often appropriate for complex, undefined scopes of work like environmental remediation, where the full extent of work may not be known at the outset. The fixed fee component provides the contractor with an incentive to manage costs effectively.
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 contractors had the opportunity to bid. With four bidders participating, the level of competition suggests that the government received a range of proposals and pricing, which generally supports achieving a fair and reasonable price. The presence of multiple bidders helps ensure that the chosen contractor is competitive and offers good value.
Taxpayer Impact: Full and open competition benefits taxpayers by fostering a competitive environment that drives down prices and encourages innovation among contractors, ultimately leading to more cost-effective service delivery.
Public Impact
The Department of the Air Force benefits from the remediation of environmental hazards at its facilities. Services delivered include the cleanup and management of contaminated sites. The geographic impact is localized to the specific Air Force installations requiring remediation. The contract supports a workforce of environmental scientists, engineers, and technicians.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee contracts can lead to higher final costs if not closely monitored.
- The long duration of the contract increases the potential for scope creep if not managed diligently.
Positive Signals
- Awarded under full and open competition, ensuring a competitive bidding process.
- The fixed fee component incentivizes the contractor to control costs.
- The contract duration allowed for comprehensive remediation efforts.
Sector Analysis
Environmental remediation services are a critical component of the Department of Defense's operations, ensuring compliance with environmental regulations and the cleanup of legacy contamination. The market for these services is substantial, with numerous firms specializing in various aspects of environmental assessment, remediation, and monitoring. This contract fits within the broader defense sector's need for facility sustainment and environmental stewardship, often involving complex projects requiring specialized expertise and significant resources.
Small Business Impact
The data indicates that this contract was not set aside for small businesses, and there is no explicit information regarding subcontracting plans for small businesses. Therefore, the direct impact on the small business ecosystem is likely minimal unless the prime contractor voluntarily engages small businesses for specialized services. Further investigation into subcontracting reports would be needed to fully assess the impact.
Oversight & Accountability
Oversight for this contract would typically be managed by the contracting officer and the contract administration team within the Department of the Air Force. Performance monitoring, financial reviews, and compliance checks are standard oversight mechanisms. Transparency is generally maintained through contract award databases and reporting requirements, though specific details of ongoing oversight activities may not be publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.
Related Government Programs
- Environmental Remediation Services
- Defense Environmental Cleanup Program
- Military Construction and Environmental Services
Risk Flags
- Cost Overruns Potential
- Scope Creep Risk
- Long-Term Performance Monitoring Needed
Tags
department-of-defense, air-force, environmental-remediation, full-and-open-competition, cost-plus-fixed-fee, large-contract, remediation-services, environmental-services, construction, federal-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $66.4 million to LAGUNA CONSTRUCTION COMPANY, INC. See the official description on USAspending.
Who is the contractor on this award?
The obligated recipient is LAGUNA CONSTRUCTION COMPANY, INC.
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 $66.4 million.
What is the period of performance?
Start: 2005-07-12. End: 2010-04-15.
What is the track record of Laguna Construction Company, Inc. with federal environmental remediation contracts?
Laguna Construction Company, Inc. has a history of performing work for the federal government, including contracts related to construction and environmental services. While specific details on their past performance on environmental remediation projects of this scale would require a deeper dive into contract databases and performance reviews, their award on this significant DoD contract suggests they possess the necessary qualifications and experience. Analyzing past contract awards, completion records, and any reported disputes or performance issues would provide a more comprehensive understanding of their track record in this specific domain.
How does the pricing structure (Cost Plus Fixed Fee) compare to other environmental remediation contracts?
Cost Plus Fixed Fee (CPFF) is a common contract type for services where the scope of work is not fully defined at the time of award, such as environmental remediation. It allows for flexibility as unknown conditions are discovered. The fixed fee provides an incentive for the contractor to control costs, as their profit is capped. Compared to fixed-price contracts, CPFF can be more expensive if costs escalate significantly, but it offers better protection against unforeseen complexities. Compared to Cost Plus Incentive Fee (CPIF), the profit potential for the contractor is more predictable, and the incentive for cost reduction is solely driven by the fixed fee rather than a shared savings mechanism.
What are the primary risks associated with this type of environmental remediation contract?
The primary risks associated with this Cost Plus Fixed Fee environmental remediation contract include: 1. Cost Overruns: The 'cost-plus' nature means the government pays actual allowable costs, and if these exceed estimates, the total expenditure will be higher. Unforeseen site conditions, regulatory changes, or inefficient performance can drive up costs. 2. Scope Creep: Environmental projects can uncover unexpected contamination or require additional work not initially anticipated, leading to an expansion of the contract's scope and cost if not managed carefully. 3. Performance Risk: Ensuring the contractor effectively remediates the contamination to meet regulatory standards is crucial. Inadequate cleanup could lead to long-term environmental and health issues. 4. Schedule Delays: Complex remediation processes, permitting issues, or unforeseen site challenges can cause delays, impacting project timelines and potentially increasing costs.
What is the historical spending trend for environmental remediation services within the Department of Defense?
The Department of Defense (DoD) has consistently allocated significant funding towards environmental remediation over the past several decades. This spending is driven by the need to address contamination from past military activities, comply with stringent environmental regulations (like CERCLA and RCRA), and manage ongoing environmental stewardship responsibilities at active and former installations worldwide. Historical spending data typically shows a substantial and sustained investment, often in the billions of dollars annually, reflecting the long-term nature of many cleanup efforts and the vast number of sites requiring attention. Factors influencing spending include the number of sites needing cleanup, the complexity of the contamination, evolving regulatory requirements, and the availability of federal appropriations.
How effective are environmental remediation contracts in achieving long-term environmental protection goals?
The effectiveness of environmental remediation contracts in achieving long-term protection goals is generally high, provided they are well-managed and executed. These contracts are designed to address specific environmental hazards, remove or contain contaminants, and restore sites to a safe condition, thereby preventing further environmental degradation and protecting human health. Success is measured by meeting cleanup standards, regulatory compliance, and the long-term protectiveness of the remedy. However, effectiveness can be influenced by factors such as the initial assessment of contamination, the chosen remediation technology, the contractor's performance, ongoing monitoring, and adaptive management strategies to address any emerging issues. Continuous oversight and performance evaluation are key to ensuring these contracts deliver lasting environmental benefits.
Industry Classification
NAICS: Administrative and Support and Waste Management and Remediation Services › Remediation and Other Waste Management Services › Remediation Services
Product/Service Code: MAINT, REPAIR, ALTER REAL PROPERTY › MAINT, ALTER, REPAIR BUILDINGS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 4
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: I-40 WEST EXIT 114, LAGUNA, NM, 02
Business Categories: Category Business, Not Designated a Small Business
Contract Characteristics
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: FA890304D8690
IDV Type: IDC
Timeline
Start Date: 2005-07-12
Current End Date: 2010-04-15
Potential End Date: 2010-04-15 00:00:00
Last Modified: 2013-09-25
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