DoD's $121M remediation contract to The IT Group Inc. awarded in 2000, spanning 7 years

Contract Overview

Contract Amount: $12,110,730 ($12.1M)

Contractor: THE IT Group Inc

Awarding Agency: Department of Defense

Start Date: 2000-08-14

End Date: 2007-04-12

Contract Duration: 2,432 days

Daily Burn Rate: $5.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS AWARD FEE

Sector: Other

Place of Performance

Location: KAPOLEI, HONOLULU County, HAWAII, 96707

State: Hawaii Government Spending

Plain-Language Summary

Department of Defense obligated $12.1 million to THE IT GROUP INC for work described as: Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract type, Cost Plus Award Fee, incentivizes performance but can lead to higher costs. 3. Duration of 2432 days (approx. 7 years) indicates a long-term need for remediation services. 4. The contract was awarded to The IT Group Inc., a single contractor for the entire period. 5. The remediation services were delivered in Hawaii, indicating a specific geographic focus. 6. The contract's value of over $121 million suggests a significant environmental cleanup effort.

Value Assessment

Rating: fair

The contract's total value of $121 million over nearly 7 years averages approximately $17.3 million annually. Without specific performance metrics or comparable remediation contracts for similar sites, it's difficult to definitively benchmark value. The Cost Plus Award Fee structure allows for contractor reimbursement of costs plus a fee, with potential for award based on performance. This structure can sometimes lead to less price certainty compared to fixed-price contracts, but it is often used for complex services where costs are hard to predict.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition,' indicating that all responsible sources were permitted to submit bids. The presence of 3 bidders suggests a moderate level of competition for this significant remediation project. While competition existed, the specific details of the bidding process and the number of proposals received are not provided, making it challenging to assess if the competition was robust enough to drive the lowest possible price.

Taxpayer Impact: A competitive award process generally benefits taxpayers by encouraging lower bids and better value. However, the ultimate cost-effectiveness depends on the specifics of the bids received and the contract's performance.

Public Impact

The primary beneficiaries are the Department of Defense and potentially the environment in Hawaii, through the remediation of contaminated sites. Services delivered include remediation activities, likely addressing environmental hazards at military installations. The geographic impact is concentrated in Hawaii, addressing specific environmental cleanup needs in that region. Workforce implications would involve skilled labor in environmental remediation, potentially supporting local employment in Hawaii.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Award Fee contracts can incentivize higher spending if not carefully managed.
Long contract duration may lead to contractor complacency or reduced focus on cost efficiency over time.
Limited information on specific performance outcomes makes it hard to assess true value for money.
The single awardee for the entire duration might limit opportunities for other firms to gain experience.

Positive Signals

Awarded through full and open competition, indicating a fair opportunity for multiple bidders.
The Cost Plus Award Fee structure, if managed well, can incentivize high-quality performance.
The contract addresses critical environmental remediation needs for the Department of Defense.
The remediation services likely contribute to improved environmental conditions in Hawaii.

Sector Analysis

The remediation services sector is a critical component of environmental management and compliance, particularly for government agencies dealing with legacy contamination. This contract falls within the broader environmental services industry, which includes hazardous waste management, site cleanup, and compliance consulting. The market for environmental remediation is substantial, driven by regulatory requirements and the need to address historical industrial and military activities. This specific contract represents a significant investment in addressing environmental liabilities within the defense sector.

Small Business Impact

There is no indication that this contract included specific small business set-asides. The contract was awarded to a single entity, The IT Group Inc. Further analysis would be needed to determine if subcontracting opportunities were made available to small businesses as part of the overall remediation effort.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and program management offices. The Cost Plus Award Fee structure implies performance monitoring to determine award fee payments. Inspector General (IG) jurisdiction would apply for investigations into fraud, waste, or abuse. Transparency would depend on the DoD's reporting practices for contract performance and expenditures.

Related Government Programs

Environmental Remediation Services
Department of Defense Contracts
Cost Plus Award Fee Contracts
Hawaii Environmental Projects

Risk Flags

Cost Plus Award Fee contract type can lead to higher costs if not managed effectively.
Long contract duration may present risks of performance degradation or scope creep.
Limited public information on specific performance outcomes hinders value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.1 million to THE IT GROUP INC. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is THE IT GROUP INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $12.1 million.

What is the period of performance?

Start: 2000-08-14. End: 2007-04-12.

What was the specific nature of the remediation services provided under this contract?

The provided data indicates the contract was for 'Remediation Services' (NAICS 562910) awarded by the Department of the Navy. While the specific contaminants or sites are not detailed, remediation services typically involve the cleanup of hazardous substances, pollutants, or contaminants from soil, water, or air. This can include activities such as excavation, treatment, containment, monitoring, and disposal of hazardous materials, often at former industrial or military sites. Given the duration and value, it likely involved complex and extensive environmental cleanup operations.

How does the $121 million contract value compare to similar remediation contracts awarded by the DoD?

Benchmarking the $121 million value requires comparing it to similar large-scale environmental remediation contracts awarded by the Department of Defense or other federal agencies for projects of comparable scope, complexity, and duration. Without specific details on the types of contaminants, the geographic area covered, and the specific remediation technologies employed, a direct comparison is challenging. However, multi-year, multi-million dollar remediation contracts are common within the DoD due to the extensive environmental liabilities associated with historical military operations. This contract's value appears substantial, suggesting a significant environmental undertaking.

What were the key performance indicators (KPIs) used to determine the award fee for The IT Group Inc.?

The data provided does not specify the key performance indicators (KPIs) used for the Cost Plus Award Fee (CPAF) component of this contract. For CPAF contracts, the government typically establishes a performance plan outlining measurable criteria related to cost control, schedule adherence, quality of work, technical performance, and customer satisfaction. The contractor receives a base fee plus an award fee if performance meets or exceeds these predefined standards. Without access to the contract's performance work statement or award fee determination documents, the specific KPIs remain unknown.

What is the track record of The IT Group Inc. in handling large federal environmental remediation contracts?

The IT Group Inc. was a significant player in the environmental services industry. This $121 million Department of Defense contract spanning nearly seven years indicates they were capable of managing large-scale, long-term federal projects. Companies in this sector often handle a variety of remediation tasks, from hazardous waste management to site cleanup and compliance. A comprehensive assessment of their track record would involve reviewing other contracts they held, their performance history on those contracts, any past performance issues or awards, and their overall financial stability during the period this contract was active.

What are the potential risks associated with a Cost Plus Award Fee contract of this magnitude and duration?

Cost Plus Award Fee (CPAF) contracts, especially those of significant value and long duration like this $121 million DoD contract, carry inherent risks. A primary risk is cost escalation, as the contractor is reimbursed for allowable costs, and the 'cost plus' nature can disincentivize aggressive cost control if oversight is weak. The 'award fee' component, while intended to incentivize performance, can be subjective and lead to disputes if not clearly defined. For long-duration contracts, there's also a risk of scope creep, changes in regulatory requirements, and potential contractor performance degradation over time if not actively managed and monitored. Ensuring robust oversight and clear performance metrics is crucial to mitigate these risks.

How has federal spending on remediation services evolved since this contract was awarded in 2000?

Federal spending on remediation services has likely evolved significantly since 2000, influenced by factors such as stricter environmental regulations, increased awareness of environmental health impacts, and technological advancements in cleanup methods. Agencies like the DoD, EPA, and DOE continue to allocate substantial budgets to address environmental contamination. While specific year-over-year spending trends require detailed analysis of federal budget data, the overall demand for remediation services remains strong, driven by ongoing compliance needs and the management of legacy contamination sites. Spending patterns may also shift towards more sustainable and cost-effective remediation technologies.

Industry Classification

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

Product/Service Code: NATURAL RESOURCES MANAGEMENT › NATURAL RESOURCES - OTHER SVCS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 3

Pricing Type: COST PLUS AWARD FEE (R)

Contractor Details

Address: 2790 MOSSIDE BLVD, MONROEVILLE, PA, 12

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N6274298D1808

IDV Type: IDC

Timeline