DoD awards $20.1M contract for hazardous waste treatment, raising questions about competition and value
Contract Overview
Contract Amount: $20,107,123 ($20.1M)
Contractor: Engineered AIR Systems, Inc.
Awarding Agency: Department of Defense
Start Date: 2011-07-06
End Date: 2012-12-31
Contract Duration: 544 days
Daily Burn Rate: $37.0K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: JSTDS-SS M26 UNITS
Place of Performance
Location: SAINT LOUIS, ST. LOUIS County, MISSOURI, 63121
State: Missouri Government Spending
Plain-Language Summary
Department of Defense obligated $20.1 million to ENGINEERED AIR SYSTEMS, INC. for work described as: JSTDS-SS M26 UNITS Key points: 1. Contract awarded on a sole-source basis, limiting competitive pressure on pricing. 2. Fixed-price contract type suggests cost certainty but may not reflect true value. 3. Contract duration of 544 days indicates a medium-term service requirement. 4. Hazardous waste treatment is a critical but specialized service area. 5. Lack of competition may lead to suboptimal pricing for taxpayers. 6. Performance period spans over a year, requiring sustained oversight.
Value Assessment
Rating: questionable
The contract's value of $20.1 million for hazardous waste treatment services is difficult to benchmark without comparable sole-source awards. The firm fixed-price structure provides cost certainty for the government, but the absence of competition raises concerns about whether the price reflects optimal value for money. Without competitive bids, it's challenging to assess if Engineered Air Systems, Inc. offered the most cost-effective solution. Further analysis would require comparing this award to similar sole-source contracts for hazardous waste management or to publicly available pricing data for such specialized services.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning only one bidder, Engineered Air Systems, Inc., was solicited. The justification for this approach is not provided in the data, but sole-source awards typically occur when only one vendor possesses the necessary unique capabilities, or in urgent situations. The lack of competition means there was no opportunity for multiple companies to bid, which can limit price discovery and potentially lead to higher costs for the government compared to a fully competed contract. The government did not benefit from the competitive tension that drives down prices.
Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. Without multiple offers, the government lacked leverage to negotiate the lowest possible price for these essential hazardous waste treatment services.
Public Impact
The Department of the Army benefits from the provision of essential hazardous waste treatment services, ensuring compliance with environmental regulations. The contract supports the safe disposal and management of hazardous materials generated by military operations. Geographic impact is focused on Missouri, where the services are likely performed. The contract supports specialized labor in the hazardous waste management sector.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits price competition and potentially increases costs.
- Lack of transparency regarding the justification for sole-sourcing.
- Fixed-price contract may not fully capture efficiencies if costs are lower than anticipated.
Positive Signals
- Firm fixed-price contract provides budget certainty.
- Contract addresses a critical environmental compliance need for the Department of Defense.
Sector Analysis
The hazardous waste treatment and disposal sector (NAICS 562211) is a critical component of environmental services, supporting various industries including government, manufacturing, and energy. This contract falls within a specialized niche requiring specific expertise and regulatory compliance. The market size for hazardous waste management is substantial, driven by stringent environmental regulations. Benchmarking this contract's value is challenging without more data on specialized waste streams and treatment methods, but it represents a significant investment in environmental stewardship for the Department of Defense.
Small Business Impact
The data indicates that small business participation was not a factor in this contract, as the 'sb' field is false and the contract was sole-sourced. There is no indication of small business set-asides or subcontracting requirements. This sole-source award does not appear to directly benefit the small business ecosystem in this specialized sector.
Oversight & Accountability
Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. Accountability measures are inherent in the firm fixed-price structure, which obligates the contractor to deliver services within the agreed price. Transparency is limited due to the sole-source nature of the award and the absence of a public justification. Inspector General jurisdiction may apply if performance issues or allegations of impropriety arise.
Related Government Programs
- Environmental Remediation Services
- Hazardous Material Management
- Defense Environmental Programs
- Waste Disposal Contracts
- Department of Defense Procurement
Risk Flags
- Sole-source award lacks competitive justification.
- Potential for overpayment due to lack of competition.
- Limited transparency regarding contract specifics and rationale.
Tags
defense, department-of-defense, department-of-the-army, hazardous-waste-treatment, waste-disposal, sole-source, firm-fixed-price, missouri, environmental-services, medium-value, not-competed
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $20.1 million to ENGINEERED AIR SYSTEMS, INC.. JSTDS-SS M26 UNITS
Who is the contractor on this award?
The obligated recipient is ENGINEERED AIR SYSTEMS, INC..
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Army).
What is the total obligated amount?
The obligated amount is $20.1 million.
What is the period of performance?
Start: 2011-07-06. End: 2012-12-31.
What is the specific type of hazardous waste being treated under this contract, and what are the associated risks?
The provided data does not specify the exact type of hazardous waste. However, given the context of Department of Defense operations, it could range from chemical waste, unexploded ordnance, contaminated soil, to medical waste. Each type carries distinct risks, including environmental contamination, health hazards to personnel, and potential for explosive or reactive incidents. Proper handling, treatment, and disposal are critical to mitigate these risks and ensure compliance with environmental regulations like RCRA (Resource Conservation and Recovery Act). The 'Hazardous Waste Treatment and Disposal' NAICS code (562211) broadly covers these activities.
Why was this contract awarded on a sole-source basis, and what alternatives were considered?
The data indicates the contract was awarded as 'NOT COMPETED' (CT: NOT COMPETED), which is synonymous with a sole-source award in this context. The specific justification for this sole-source determination is not provided. Typically, sole-source awards are justified under circumstances such as: only one responsible source being available, urgent and compelling needs, or when a specific technology or capability is uniquely held by one contractor. Without the official justification document (e.g., a Justification and Approval - J&A), it's impossible to know the precise rationale or if alternatives, such as market research for other potential sources or phased competition, were adequately explored.
How does the $20.1 million contract value compare to similar hazardous waste treatment contracts awarded by the DoD or other federal agencies?
Direct comparison of the $20.1 million value is challenging without knowing the specific scope, volume, and type of hazardous waste. However, federal contracts for hazardous waste management can range from hundreds of thousands to hundreds of millions of dollars, depending on the complexity and duration. For instance, large-scale environmental remediation projects or long-term waste management contracts for major military installations often exceed this amount. Given this contract's duration (544 days) and sole-source nature, it's difficult to definitively state if $20.1 million is high or low without more granular data on unit costs, treatment processes, and market rates for comparable services.
What are the potential risks associated with a sole-source contract for hazardous waste management?
The primary risk of a sole-source contract for hazardous waste management is the potential for inflated pricing due to the lack of competition. Without competing bids, the government may not secure the most cost-effective solution. Additionally, there's a risk of complacency from the awarded contractor, potentially impacting service quality or innovation over time. Sole-sourcing can also limit opportunities for new or smaller businesses to enter the market and demonstrate their capabilities. Furthermore, if the sole source fails to perform adequately, the government faces significant challenges in finding and transitioning to an alternative provider, especially given the critical nature of hazardous waste disposal.
What oversight mechanisms are in place to ensure the contractor, Engineered Air Systems, Inc., performs effectively and compliantly?
Oversight for this contract would typically involve a Contracting Officer's Representative (COR) or a Technical Point of Contact (TPOC) from the Department of the Army. These individuals are responsible for monitoring contractor performance, ensuring compliance with contract terms and conditions, verifying deliverables, and approving invoices. The firm fixed-price nature of the contract provides a baseline for performance expectations. Additionally, the contract may include specific performance standards, reporting requirements, and quality assurance surveillance plans (QASPs). The agency's contract administration and oversight functions are crucial for ensuring the safe and compliant management of hazardous waste.
Industry Classification
NAICS: Administrative and Support and Waste Management and Remediation Services › Waste Treatment and Disposal › Hazardous Waste Treatment and Disposal
Product/Service Code: FIRE/RESCUE/SAFETY; ENVIRO PROTECT
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 201 EVANS LN, SAINT LOUIS, MO, 90
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $20,107,123
Exercised Options: $20,107,123
Current Obligation: $20,107,123
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: M6700406D0007
IDV Type: IDC
Timeline
Start Date: 2011-07-06
Current End Date: 2012-12-31
Potential End Date: 2012-12-31 00:00:00
Last Modified: 2012-06-21
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