Interior's Bureau of Land Management awards $2.8M for oil and gas plugging services to Olgoonik Construction Services LLC

Contract Overview

Contract Amount: $2,810,445 ($2.8M)

Contractor: Olgoonik Construction Services LLC

Awarding Agency: Department of the Interior

Start Date: 2025-09-02

End Date: 2026-12-10

Contract Duration: 464 days

Daily Burn Rate: $6.1K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: PURCHASE OF THE PANOCHE CAS034554A PLUGGING AND ABANDONMENT SERVICES IN ACCORDANCE WITH ATTACHED STATEMENT OF WORK (SOW).

Place of Performance

Location: BAKERSFIELD, KERN County, CALIFORNIA, 93308

State: California Government Spending

Plain-Language Summary

Department of the Interior obligated $2.8 million to OLGOONIK CONSTRUCTION SERVICES LLC for work described as: PURCHASE OF THE PANOCHE CAS034554A PLUGGING AND ABANDONMENT SERVICES IN ACCORDANCE WITH ATTACHED STATEMENT OF WORK (SOW). Key points: 1. Contract awarded for essential environmental remediation services. 2. Fixed-price contract type aims to control costs. 3. Competition was conducted after excluding sources, suggesting specific capabilities were sought. 4. Performance period extends over a year, indicating a substantial scope of work. 5. Geographic focus on California for plugging and abandonment activities. 6. Contractor has experience in oil and gas support activities.

Value Assessment

Rating: fair

The contract value of $2.81 million for plugging and abandonment services appears to be within a reasonable range for specialized environmental remediation. Benchmarking against similar contracts for oil and gas well plugging in California would provide a more precise assessment of value for money. The firm fixed-price structure helps mitigate cost overrun risks for the government, but the ultimate value depends on the efficiency and effectiveness of the services delivered by Olgoonik Construction Services LLC.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES.' This indicates that while the competition was intended to be broad, certain sources were excluded, possibly due to specific technical requirements, past performance, or other criteria outlined in the solicitation. The exact number of bidders is not provided, but the exclusion of sources suggests a more targeted competition than a purely open solicitation, which could impact price discovery.

Taxpayer Impact: The exclusion of sources may limit the number of potential bidders, potentially leading to less aggressive pricing than a fully open competition. However, if the exclusions were based on necessary qualifications, it ensures that only capable contractors participate, potentially reducing performance risks for taxpayers.

Public Impact

Benefits the Department of the Interior's Bureau of Land Management by ensuring compliance with environmental regulations. Services delivered include plugging and abandonment of oil and gas wells in California. Geographic impact is concentrated in California, addressing specific environmental concerns within the state. Workforce implications include employment opportunities for skilled labor in the oil and gas services sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions arise, despite firm fixed-price contract.
Dependence on contractor's technical expertise for effective and safe plugging operations.
Limited competition may have resulted in a higher price than a fully open bid process.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Contractor is experienced in oil and gas support activities.
Services address critical environmental remediation needs.

Sector Analysis

The oil and gas support services sector encompasses a wide range of activities, from exploration and drilling to maintenance and decommissioning. Plugging and abandonment services are a critical component of the industry's environmental stewardship and regulatory compliance. Spending in this area is often driven by regulatory requirements and the lifecycle of oil and gas fields. Comparable spending benchmarks would typically be found within specific regional oil and gas service markets, considering factors like well depth, complexity, and environmental conditions.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses in the provided data. This suggests that the primary award went to a larger entity, and the direct impact on the small business ecosystem may be limited unless the prime contractor actively engages small businesses for subcontracting opportunities.

Oversight & Accountability

Oversight will be provided by the Bureau of Land Management (BLM), a division of the Department of the Interior. The contract's performance will be monitored against the Statement of Work (SOW) to ensure compliance and quality. Transparency is facilitated through federal contract databases where such awards are reported. Inspector General jurisdiction would typically extend to investigating fraud, waste, and abuse related to federal contracts.

Related Government Programs

Oil and Gas Well Plugging and Abandonment
Environmental Remediation Services
Bureau of Land Management Contracts
Department of the Interior Procurement

Risk Flags

Limited competition may impact price.
Potential for unforeseen site conditions impacting cost and schedule.
Contractor performance history needs verification for specialized tasks.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Interior awarded $2.8 million to OLGOONIK CONSTRUCTION SERVICES LLC. PURCHASE OF THE PANOCHE CAS034554A PLUGGING AND ABANDONMENT SERVICES IN ACCORDANCE WITH ATTACHED STATEMENT OF WORK (SOW).

Who is the contractor on this award?

The obligated recipient is OLGOONIK CONSTRUCTION SERVICES LLC.

Which agency awarded this contract?

Awarding agency: Department of the Interior (Bureau of Land Management).

What is the total obligated amount?

The obligated amount is $2.8 million.

What is the period of performance?

Start: 2025-09-02. End: 2026-12-10.

What is the track record of Olgoonik Construction Services LLC in performing similar plugging and abandonment services for federal agencies?

Olgoonik Construction Services LLC is listed under NAICS code 213112 (Support Activities for Oil and Gas Operations). While the provided data indicates the contractor's general industry classification, a detailed assessment of their specific track record for plugging and abandonment services would require reviewing past performance evaluations, contract histories, and any reported issues or successes on similar federal or state contracts. This information is typically available through sources like the Federal Procurement Data System (FPDS) or contractor performance databases. Without this specific historical data, it's difficult to definitively assess their suitability and past performance on comparable projects.

How does the awarded amount of $2.81 million compare to the market rates for similar plugging and abandonment services in California?

Benchmarking the $2.81 million award against market rates for plugging and abandonment services in California requires detailed analysis of project scope, well complexity (depth, casing, geological conditions), and prevailing labor and material costs in the specific region of operation. The 'Support Activities for Oil and Gas Operations' NAICS code covers a broad range of services. To provide a precise comparison, one would need to identify comparable projects awarded by state or federal agencies, or by private operators in California, with similar technical specifications and timelines. Factors such as the number of wells, their condition, and the required remediation techniques significantly influence cost. The firm fixed-price nature of this contract suggests an attempt to lock in costs, but the true value is realized upon successful completion.

What are the primary risks associated with this contract, and how are they being mitigated?

The primary risks associated with this contract include potential cost overruns due to unforeseen subsurface conditions, contractor performance issues (delays, quality of work), and environmental incidents during the plugging process. Mitigation strategies include the firm fixed-price contract type, which shifts some cost risk to the contractor. The Bureau of Land Management's oversight, adherence to the detailed Statement of Work (SOW), and the contractor's presumed experience in this specialized field are also key mitigation factors. Pre-qualification of the contractor and potentially requiring performance bonds further reduce financial and performance risks for the government.

What is the expected effectiveness of the services delivered under this contract in achieving the Bureau of Land Management's environmental protection goals?

The effectiveness of the services will be measured by the successful and compliant plugging and abandonment of oil and gas wells as defined in the Statement of Work (SOW). Proper plugging is crucial for preventing groundwater contamination, surface leakage, and methane emissions, thereby fulfilling regulatory requirements and protecting the environment. The Bureau of Land Management's oversight and inspection protocols will be critical in ensuring that the contractor adheres to industry best practices and regulatory standards. The long-term environmental benefit hinges on the integrity of the seals and the thoroughness of the abandonment process.

How does historical spending on similar oil and gas plugging and abandonment services by the Department of the Interior compare to this award?

Analyzing historical spending requires accessing comprehensive federal procurement data. The Department of the Interior, through agencies like the Bureau of Land Management, regularly contracts for plugging and abandonment services, especially in regions with legacy oil and gas infrastructure. To compare this $2.81 million award, one would need to aggregate spending on similar services (e.g., under NAICS 213112 or related codes) over previous fiscal years, noting contract values, number of awards, and the agencies involved. This would reveal trends in spending levels, average contract values, and the typical distribution of work among contractors, providing context for the current award's magnitude.

Industry Classification

NAICS: Mining, Quarrying, and Oil and Gas Extraction › Support Activities for Mining › Support Activities for Oil and Gas Operations

Product/Service Code: MAINT, REPAIR, ALTER REAL PROPERTY › MAINT, ALTER, REPAIR NONBUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 0044012502

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 3201 C ST. STE. 700, ANCHORAGE, AK, 99503

Business Categories: Alaskan Native Corporation Owned Firm, Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Minority Owned Business, Native American Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $2,810,445

Exercised Options: $2,810,445

Current Obligation: $2,810,445

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 140L0623D0017

IDV Type: IDC

Timeline