Environmental Chemical Corporation awarded $89.8M contract for debris removal services

Contract Overview

Contract Amount: $89,814,274 ($89.8M)

Contractor: Environmental Chemical Corporation

Awarding Agency: Department of Defense

Start Date: 2006-10-01

End Date: 2007-09-30

Contract Duration: 364 days

Daily Burn Rate: $246.7K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: DEBRIS REMOVAL

Place of Performance

Location: NEW ORLEANS, ORLEANS County, LOUISIANA, 70130

State: Louisiana Government Spending

Plain-Language Summary

Department of Defense obligated $89.8 million to ENVIRONMENTAL CHEMICAL CORPORATION for work described as: DEBRIS REMOVAL Key points: 1. Contract value appears reasonable given the scope of debris removal. 2. Full and open competition suggests potential for competitive pricing. 3. Contract duration of 364 days is standard for this type of service. 4. Performance location in Louisiana indicates a focus on regional needs. 5. Fixed-price contract type shifts risk to the contractor. 6. No small business set-aside was utilized, potentially limiting small business participation.

Value Assessment

Rating: good

The contract value of $89.8 million for debris removal services is substantial. Without specific benchmarks for similar large-scale debris removal operations in the region or for the specific types of debris, a precise value-for-money assessment is challenging. However, the fixed-price nature of the contract suggests that the contractor bears the financial risk for cost overruns, which can be a positive indicator of controlled spending. The contract was awarded after exclusion of sources, which warrants further investigation into the justification for this approach.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition After Exclusion of Sources.' This indicates that while the competition was intended to be open, certain sources were excluded from consideration. The specific reasons for this exclusion are not provided but could relate to specialized capabilities or prior performance. The number of bidders is not specified, making it difficult to fully assess the level of competition and its impact on price discovery.

Taxpayer Impact: The exclusion of sources, even within a full and open competition framework, may limit the number of potential bidders, potentially leading to less aggressive pricing than a truly unrestricted competition. Taxpayers benefit from competition, and any limitations on that competition could result in higher costs.

Public Impact

The primary beneficiaries are likely residents and entities impacted by events requiring large-scale debris removal in Louisiana. Services delivered include the collection, transportation, and disposal of debris. Geographic impact is concentrated in Louisiana, addressing specific regional disaster recovery or environmental needs. Workforce implications would involve employment opportunities for personnel involved in debris removal operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of transparency regarding the exclusion of sources in the competition.
Potential for limited price discovery due to exclusion of certain bidders.
No indication of small business subcontracting goals or achievements.

Positive Signals

Firm fixed-price contract shifts cost risk to the contractor.
Contract awarded to a single entity, suggesting a clear point of accountability.
Contract duration is defined, providing a clear timeframe for service delivery.

Sector Analysis

The debris removal sector is often tied to disaster response and environmental remediation efforts. This contract falls within the broader waste collection and disposal industry (NAICS 562119). Market size for such services can fluctuate significantly based on natural disasters or environmental incidents. Comparable spending benchmarks are difficult to establish without knowing the specific nature and volume of debris, but large-scale contracts like this are common in post-disaster scenarios.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. This means that opportunities for small businesses to participate in this significant contract are limited to direct subcontracting if the prime contractor chooses to engage them, or by competing for future, potentially smaller, contracts in this space. The absence of set-asides could impact the broader small business ecosystem involved in environmental services.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army, with specific program managers responsible for monitoring performance and adherence to contract terms. Accountability measures are inherent in the firm fixed-price structure, which penalizes contractor cost overruns. Transparency regarding the 'exclusion of sources' is a key area for potential improvement, as the rationale for such exclusions is not readily apparent from the provided data.

Related Government Programs

Disaster Recovery Contracts
Environmental Remediation Services
Waste Management Contracts
Emergency Response Services

Risk Flags

Competition potentially limited by exclusion of sources.
Lack of detail on specific debris types and removal methods.
No explicit small business subcontracting goals mentioned.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $89.8 million to ENVIRONMENTAL CHEMICAL CORPORATION. DEBRIS REMOVAL

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 $89.8 million.

What is the period of performance?

Start: 2006-10-01. End: 2007-09-30.

What specific types of debris were covered under this contract, and what was the justification for excluding certain sources from the competition?

The provided data does not specify the exact types of debris covered under the $89.8 million contract awarded to Environmental Chemical Corporation. Debris removal can encompass a wide range of materials, from construction and demolition waste to hazardous materials, depending on the context (e.g., natural disaster cleanup, industrial site remediation). The contract's designation as 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' indicates that while the competition was broadly open, specific potential bidders were deliberately not invited or considered. The justification for such exclusions typically involves factors like unique technical capabilities, proprietary technology, urgent and compelling needs where only a limited number of contractors can meet the requirements, or specific past performance issues with other potential bidders. Without further documentation or agency explanation, the precise reasons for excluding sources remain unknown, which is a critical detail for understanding the competitive landscape and potential value for taxpayers.

How does the awarded amount of $89.8 million compare to similar debris removal contracts awarded by the Department of Defense or other federal agencies?

Comparing the $89.8 million contract value requires context regarding the scale, duration, and specific services rendered. Large-scale debris removal contracts, especially those following major natural disasters or significant environmental incidents, can easily reach tens or hundreds of millions of dollars. For instance, contracts following hurricanes or widespread flooding often involve extensive cleanup operations over large geographic areas. The duration of this contract (364 days) suggests a significant, ongoing operation rather than a short-term emergency response. Without knowing the specific volume and type of debris (e.g., hazardous vs. non-hazardous, construction waste, natural debris), a direct comparison is difficult. However, the amount is within the expected range for substantial debris removal efforts managed by federal agencies like the Army Corps of Engineers or FEMA, which frequently handle such large procurements.

What are the potential risks associated with a firm fixed-price contract for debris removal, and how are they mitigated?

A firm fixed-price (FFP) contract places the primary cost risk on the contractor. For debris removal, potential risks include underestimating the volume or complexity of the debris, encountering unforeseen hazardous materials, or experiencing logistical challenges in transportation and disposal, all of which could lead to cost overruns for the contractor. The primary mitigation for the government is that the price is fixed, protecting against unexpected increases in the contractor's costs. However, the risk of contractor default or poor performance remains. To mitigate these, agencies typically require detailed proposals, conduct thorough contractor vetting, establish clear performance standards, and implement robust oversight mechanisms. In FFP contracts, the contractor is incentivized to perform efficiently to maximize profit, but if they cut corners to save costs, it can lead to quality issues or safety concerns, necessitating strong government monitoring.

What does the 'After Exclusion of Sources' clause imply about the contractor's qualifications and the necessity of this specific award?

The 'After Exclusion of Sources' clause in a 'Full and Open Competition' context implies that while the competition was intended to be open to all responsible sources, the agency made a deliberate decision to exclude certain potential offerors from the bidding process. This is typically done when only a limited number of contractors possess the specific, unique capabilities, technology, or experience required for the contract, or when there's an urgent need that cannot be met through a broader solicitation. It suggests that Environmental Chemical Corporation was identified as possessing necessary qualifications that perhaps fewer other companies could match, or that the agency had specific reasons (e.g., past performance, specialized equipment) to limit the pool. This clause necessitates a strong justification from the agency to ensure fair and transparent procurement practices, as it deviates from a completely unrestricted competition.

Given the contract's focus on Louisiana, what might be the underlying event or need driving this significant debris removal expenditure?

A contract of this magnitude ($89.8 million) for debris removal in Louisiana, awarded in late 2006 for a term ending in late 2007, strongly suggests a response to a major natural disaster. Louisiana is highly susceptible to hurricanes and tropical storms. The timing aligns with the aftermath of significant hurricane seasons, particularly Hurricane Katrina (2005) and Hurricane Rita (2005), which caused widespread devastation across the state. Debris removal is a critical and often prolonged phase of disaster recovery, involving clearing roads, public spaces, and private properties of wreckage, fallen trees, and damaged structures. The Department of the Army, often through the Army Corps of Engineers, plays a significant role in coordinating and executing such large-scale recovery efforts, making this contract a likely component of post-hurricane cleanup and restoration.

Industry Classification

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

Product/Service Code: UTILITIES AND HOUSEKEEPING › HOUSEKEEPING SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1240 BAYSHORE HWY, BURLINGAME, CA, 90

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $89,814,274

Exercised Options: $89,814,274

Current Obligation: $89,814,274

Contract Characteristics

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W912P805D0023

IDV Type: IDC

Timeline