Air Force awards $15.8M for heavy engineering and construction, highlighting a competitive bidding process

Contract Overview

Contract Amount: $15,818,837 ($15.8M)

Contractor: Environmental Chemical Corporation

Awarding Agency: Department of Defense

Start Date: 2007-09-17

End Date: 2008-12-16

Contract Duration: 456 days

Daily Burn Rate: $34.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 20

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: HEAVY ENGINEERING REPAIR & CONSTRUCTION (HERC)

Place of Performance

Location: LOMPOC, SANTA BARBARA County, CALIFORNIA, 93437

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $15.8 million to ENVIRONMENTAL CHEMICAL CORPORATION for work described as: HEAVY ENGINEERING REPAIR & CONSTRUCTION (HERC) Key points: 1. The contract was awarded under full and open competition, suggesting a robust market response. 2. The fixed-price nature of the contract shifts performance risk to the contractor. 3. The duration of 456 days indicates a substantial project scope. 4. The award was made by the Department of the Air Force, a major defense spender. 5. The project falls under the Commercial and Institutional Building Construction NAICS code.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific deliverables. However, the total award amount of $15.8 million for heavy engineering and construction services over approximately 1.5 years suggests a moderate-sized project. The firm fixed-price contract type indicates that the contractor bears the risk of cost overruns, which can sometimes lead to higher initial bids but provides cost certainty for the government. Further analysis would require comparing the scope of work and specific services rendered against similar projects awarded by the Department of Defense or other federal agencies.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of 20 bidders suggests a healthy level of competition for this particular requirement. A competitive bidding process generally leads to better price discovery and can result in more favorable terms for the government, as contractors vie to win the award by offering competitive pricing and strong technical proposals.

Taxpayer Impact: The extensive competition for this contract is beneficial for taxpayers, as it likely drove down the final award price compared to a sole-source or limited competition scenario. This ensures that government funds are used more efficiently.

Public Impact

The primary beneficiaries are likely military installations or facilities managed by the Department of the Air Force requiring heavy engineering and construction services. Services delivered include heavy engineering repair and construction, potentially encompassing infrastructure development, maintenance, or upgrades. The geographic impact is centered in California, where the contract was awarded. The contract supports the construction and engineering workforce, providing employment opportunities in the skilled trades.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if the fixed-price contract does not adequately account for unforeseen complexities in heavy engineering.
Ensuring the quality of construction meets stringent military standards requires robust oversight.
The long duration could lead to potential delays or scope creep if not managed effectively.

Positive Signals

Full and open competition suggests a competitive market and potentially better value.
The firm fixed-price contract shifts cost risk to the contractor.
The award to a single entity (implied by 'aw' field) can streamline project management and execution.

Sector Analysis

The Commercial and Institutional Building Construction sector is a significant part of the broader construction industry, encompassing a wide range of projects from office buildings to specialized facilities. Federal spending in this area, particularly by defense agencies, often involves large-scale infrastructure and maintenance projects critical to national security and operations. This contract, valued at $15.8 million, represents a substantial investment within this sector, contributing to the overall market activity and demand for construction services.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, the primary award went to a larger entity. There is no explicit information on subcontracting plans for small businesses. Without this information, it's difficult to assess the direct impact on the small business ecosystem, though large prime contractors often utilize small businesses for specialized services.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant program management office within the Department of the Air Force. Accountability measures are embedded in the firm fixed-price contract terms, requiring the contractor to deliver specified services within the agreed-upon price. Transparency is generally maintained through contract award databases, though detailed project progress and specific oversight activities may not be publicly disclosed.

Related Government Programs

Military Construction
Base Realignment and Closure (BRAC) Projects
Department of Defense Facilities Management
General Services Administration (GSA) Public Buildings Service

Risk Flags

Contract Duration
Fixed-Price Risk
Scope Definition Clarity

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $15.8 million to ENVIRONMENTAL CHEMICAL CORPORATION. HEAVY ENGINEERING REPAIR & CONSTRUCTION (HERC)

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 $15.8 million.

What is the period of performance?

Start: 2007-09-17. End: 2008-12-16.

What is the track record of Environmental Chemical Corporation with federal contracts, particularly within the Department of Defense?

Environmental Chemical Corporation (ECC) has a significant history of performing federal contracts, particularly with the Department of Defense. While this specific contract is for heavy engineering and construction, ECC's portfolio often includes environmental remediation, construction, and engineering services. Analyzing their past performance on similar projects, including their on-time and on-budget delivery rates, contract modifications, and any past performance issues or awards, would provide a clearer picture of their reliability and capability for this type of work. A review of their contract history would reveal their experience with firm fixed-price contracts and their ability to manage complex projects within established parameters.

How does the $15.8 million award compare to typical spending for similar heavy engineering and construction projects by the Air Force?

The $15.8 million award for heavy engineering and construction by the Department of the Air Force falls within a moderate range for such projects. Federal agencies, especially the DoD, undertake a wide array of construction and engineering tasks, from minor repairs to major facility overhauls. Projects of this magnitude often involve significant infrastructure upgrades, repairs to existing structures, or new construction critical for operational readiness. Benchmarking this against other Air Force or DoD contracts for similar scopes of work, considering factors like project duration, complexity, and location, would help determine if the price is competitive and reflects fair market value for the services rendered.

What are the primary risks associated with a firm fixed-price contract for heavy engineering and construction, and how are they mitigated?

The primary risk with a firm fixed-price (FFP) contract for heavy engineering and construction is that the contractor may incur costs exceeding the agreed-upon price, potentially leading to financial distress or a reduction in quality if not managed properly. Conversely, the government risks paying a premium if the contractor's initial bid is excessively high to cover potential risks. Mitigation strategies include thorough pre-award cost analysis, clearly defined scopes of work to minimize ambiguity, robust contract administration and oversight to ensure quality and adherence to specifications, and performance bonds to protect the government against contractor default. The competitive nature of the bidding process also helps mitigate the risk of an inflated price.

What is the expected impact of this contract on the operational capabilities or infrastructure of the specific Air Force installation or unit it serves?

This contract for heavy engineering repair and construction is expected to directly enhance or maintain the operational capabilities and infrastructure of the Air Force facility it supports. Depending on the specific nature of the 'repair and construction,' it could involve upgrading critical systems, repairing aging facilities to ensure safety and functionality, or building new structures necessary for mission execution. For example, improvements to runways, hangars, training facilities, or support infrastructure can directly impact readiness, efficiency, and the ability of personnel to perform their duties effectively. The project's completion should result in a more robust, modern, or well-maintained operational environment.

How has federal spending in the Commercial and Institutional Building Construction sector, specifically for defense-related projects, trended over the past five years?

Federal spending in the Commercial and Institutional Building Construction sector, particularly for defense-related projects, has generally remained robust, driven by the need to maintain and modernize military infrastructure. While specific figures fluctuate annually based on budget allocations and strategic priorities, the Department of Defense consistently represents a significant portion of federal construction outlays. Factors such as aging facilities, evolving technological requirements, and global security postures influence spending levels. Analyzing historical data from sources like the Federal Procurement Data System (FPDS) would reveal trends, identifying periods of increased or decreased investment and highlighting specific types of construction projects that have received the most funding.

Industry Classification

NAICS: Construction › Nonresidential Building Construction › Commercial and Institutional Building Construction

Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCTION OF BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 20

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1240 BAYSHORE HGHWY, BURLINGAME, CA, 90

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

Financial Breakdown

Contract Ceiling: $31,338,782

Exercised Options: $31,338,782

Current Obligation: $15,818,837

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA890306D8511

IDV Type: IDC

Timeline