DoD's $80M construction contract awarded to Environmental Chemical Corporation shows fair value with 20 bidders

Contract Overview

Contract Amount: $80,262,465 ($80.3M)

Contractor: Environmental Chemical Corporation

Awarding Agency: Department of Defense

Start Date: 2010-03-11

End Date: 2012-08-16

Contract Duration: 889 days

Daily Burn Rate: $90.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 20

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: MIGRATED DATA VALUE UNKNOWN

Plain-Language Summary

Department of Defense obligated $80.3 million to ENVIRONMENTAL CHEMICAL CORPORATION for work described as: MIGRATED DATA VALUE UNKNOWN Key points: 1. The contract's value appears reasonable given the competitive bidding process. 2. Strong competition suggests potential for price discovery and cost efficiency. 3. The duration of the contract (889 days) is substantial, indicating a significant project scope. 4. Fixed-price contract type helps mitigate cost overrun risks for the government. 5. The award was made by the Department of the Air Force, a major component of the DoD. 6. The North American Industry Classification System (NAICS) code 236220 points to commercial building construction.

Value Assessment

Rating: good

The contract's total value of approximately $80.3 million over its period of performance suggests a significant investment. Benchmarking this against similar large-scale construction projects within the Department of Defense is challenging without more specific project details. However, the presence of 20 bidders in a full and open competition indicates a healthy market response, which typically drives more competitive pricing. The firm fixed-price nature of the award also suggests that the contractor assumed the primary risk for cost overruns, which can be a positive indicator of value if the final price is within expectations.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit bids. The fact that 20 distinct offers were received is a strong indicator of robust competition within the market for this type of construction service. A higher number of bidders generally leads to better price discovery and can pressure contractors to offer more competitive pricing to secure the award. This level of competition suggests that the Department of the Air Force likely received a range of proposals and was able to select the best value.

Taxpayer Impact: The robust competition for this contract is beneficial for taxpayers as it likely resulted in a more favorable price than would have been achieved through a less competitive process. It demonstrates that the government effectively leveraged market forces to secure construction services at a potentially reduced cost.

Public Impact

The primary beneficiaries are the Department of the Air Force and potentially other Department of Defense entities requiring construction services. The contract delivered commercial and institutional building construction services. The geographic impact is likely concentrated around the Air Force installation(s) where the construction took place. The project would have implications for the construction workforce, including skilled trades and project management personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep in large, long-duration construction projects.
Ensuring adherence to environmental regulations during construction activities.
Managing contractor performance over an extended period to maintain quality and schedule.

Positive Signals

Awarded under full and open competition, indicating a broad market response.
Firm fixed-price contract type limits government exposure to cost increases.
A significant number of bidders (20) suggests a competitive environment.

Sector Analysis

The construction sector is a significant part of the federal procurement landscape, encompassing a wide range of projects from infrastructure to facility upgrades. This contract falls under commercial and institutional building construction, a segment that supports the operational needs of government agencies. Federal spending in construction can fluctuate based on infrastructure needs, modernization efforts, and national security requirements. Comparable spending benchmarks would typically involve analyzing other large-scale building projects awarded by the Department of Defense or other federal agencies for similar types of facilities.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, the primary contractor, Environmental Chemical Corporation, is likely a large business. There is no specific information provided regarding subcontracting plans or goals for small businesses. Without set-aside provisions or explicit subcontracting requirements, the direct impact on the small business ecosystem for this particular contract may be limited, though large prime contractors can sometimes engage small businesses as subcontractors.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the contracting officer's representative (COR) within the Department of the Air Force. Performance monitoring, quality assurance, and compliance checks are standard oversight mechanisms. Transparency is generally facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if any allegations of fraud, waste, or abuse arise during the contract's lifecycle.

Related Government Programs

Department of Defense Military Construction
General Services Administration Public Buildings Service
Army Corps of Engineers Construction Contracts
Naval Facilities Engineering Command Contracts

Risk Flags

Potential for cost overruns if unforeseen site conditions arise.
Risk of contractor performance issues over the extended contract duration.
Ensuring compliance with environmental and safety regulations during construction.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $80.3 million to ENVIRONMENTAL CHEMICAL CORPORATION. MIGRATED DATA VALUE UNKNOWN

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 $80.3 million.

What is the period of performance?

Start: 2010-03-11. End: 2012-08-16.

What was the specific nature of the 'Commercial and Institutional Building Construction' performed under this contract?

The provided data identifies the contract under NAICS code 236220, which pertains to Commercial and Institutional Building Construction. This broad category typically includes the construction or alteration of non-residential buildings such as commercial, industrial, or institutional structures. Examples could range from office buildings, warehouses, and manufacturing facilities to schools, hospitals, or government administrative centers. Without more granular project details, it's impossible to specify the exact type of building or facility constructed. However, given the awarding agency is the Department of the Air Force, it likely involved facilities supporting military operations, personnel, or administrative functions at an Air Force installation.

How does the awarded amount of approximately $80.3 million compare to typical construction project costs for the Department of Defense?

Comparing the $80.3 million award to typical Department of Defense (DoD) construction project costs requires context regarding the scale and complexity of the project. The DoD undertakes a vast array of construction projects, from minor renovations to major base infrastructure development. Large-scale projects, such as new barracks, hangars, or specialized research facilities, can easily run into tens or hundreds of millions of dollars. Given this contract was awarded under full and open competition with 20 bidders, the price achieved likely reflects market rates for a project of its scope. However, without knowing the specific deliverables (e.g., square footage, type of facility, location, specific requirements), a precise benchmark is difficult. Generally, competitive bidding helps ensure the price is aligned with market value.

What are the potential risks associated with a firm fixed-price contract for a construction project of this duration?

While a firm fixed-price (FFP) contract is generally advantageous for the government by capping costs, it carries specific risks, especially for long-duration construction projects like this one (889 days). The primary risk is that the contractor may underestimate costs, encounter unforeseen site conditions (e.g., hazardous materials, difficult soil), or face significant material price escalations over the project's lifespan. If these risks materialize and are not covered by contract contingencies or change orders (which are typically limited in FFP contracts), the contractor could incur losses, potentially impacting their financial stability or motivation to complete the project to the highest standard. Conversely, if the contractor accurately estimates and manages risks, the FFP structure ensures the government pays the agreed-upon price, providing cost certainty.

What does the number of bidders (20) suggest about the market for this type of construction service?

A total of 20 bidders for this contract strongly suggests a healthy and competitive market for the specific type of commercial and institutional building construction services sought by the Department of the Air Force. This high number indicates that multiple firms were capable of performing the work and were interested in pursuing the contract. Such robust competition typically leads to more competitive pricing, as contractors vie to offer the best value proposition to win the award. It also implies that the barriers to entry for qualified firms in this market segment are not excessively high, allowing a diverse range of companies to participate. This is generally a positive signal for the government, indicating a good selection pool.

How has federal spending on commercial and institutional building construction evolved, and where does this contract fit?

Federal spending on commercial and institutional building construction can fluctuate based on agency needs, infrastructure investment cycles, and broader economic conditions. Agencies like the Department of Defense, General Services Administration (GSA), and others regularly procure construction services. This $80.3 million contract represents a significant, but not extraordinary, investment within the context of large federal building projects. It fits within the ongoing need for government agencies to maintain, modernize, and expand their physical infrastructure. Analyzing historical spending patterns for similar NAICS codes (like 236220) across the federal government would reveal trends, peak spending periods, and the typical scale of such contracts, helping to contextualize this specific award.

Industry Classification

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

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: 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: $80,262,465

Exercised Options: $80,262,465

Current Obligation: $80,262,465

Contract Characteristics

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA890306D8511

IDV Type: IDC

Timeline