State Department awards $85.9M contract for wastewater treatment plant operations and maintenance in California

Contract Overview

Contract Amount: $85,880,620 ($85.9M)

Contractor: Veolia Water West Operating Services Inc

Awarding Agency: Department of State

Start Date: 2020-09-28

End Date: 2026-03-31

Contract Duration: 2,010 days

Daily Burn Rate: $42.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: OPERATION AND MAINTENANCE OF THE SOUTH BAY WASTEWATER TREATMENT PLANT.

Place of Performance

Location: SAN YSIDRO, SAN DIEGO County, CALIFORNIA, 92173

State: California Government Spending

Plain-Language Summary

Department of State obligated $85.9 million to VEOLIA WATER WEST OPERATING SERVICES INC for work described as: OPERATION AND MAINTENANCE OF THE SOUTH BAY WASTEWATER TREATMENT PLANT. Key points: 1. Contract value appears reasonable for a multi-year operation and maintenance service for a significant facility. 2. Full and open competition was utilized, suggesting a competitive bidding process. 3. The contract is a definitive contract, indicating a single award for a defined period. 4. The firm-fixed-price structure shifts cost risk to the contractor. 5. The contract duration is over 5 years, providing long-term operational stability. 6. The North American Industry Classification System (NAICS) code 221320 points to sewage treatment facilities.

Value Assessment

Rating: good

The contract value of approximately $85.9 million over roughly 5.5 years averages to about $15.6 million annually. This figure seems within a reasonable range for operating and maintaining a large wastewater treatment plant, considering labor, chemicals, energy, and maintenance costs. Benchmarking against similar municipal or federal contracts for comparable facilities would provide a more precise value-for-money assessment, but initial indications suggest fair pricing given the scope.

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. This suggests a robust bidding process where multiple companies likely vied for the contract. The level of competition is a positive sign for price discovery and ensuring the government receives competitive pricing.

Taxpayer Impact: Taxpayers benefit from the competitive nature of this award, as it is expected to drive down costs and ensure efficient service delivery through market forces.

Public Impact

The primary beneficiaries are the residents and businesses in the South Bay region of California, who rely on the proper functioning of the wastewater treatment plant. The contract ensures the continuous operation and maintenance of the South Bay Wastewater Treatment Plant, preventing environmental hazards and ensuring compliance with regulations. The geographic impact is localized to the South Bay area of California, where the treatment plant is situated. Workforce implications include the employment of skilled personnel for plant operations, maintenance, and management by the contractor, Veolia Water West Operating Services Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen maintenance issues arise that are not adequately covered by the fixed-price structure.
Dependence on a single contractor for a critical public service raises concerns about service continuity if the contractor faces operational challenges.

Positive Signals

The use of full and open competition suggests a strong likelihood of competitive pricing and value.
The firm-fixed-price contract shifts cost risk to the contractor, incentivizing efficient operations.
The contract duration provides stability for essential service delivery.

Sector Analysis

The wastewater treatment sector is a critical component of public infrastructure, essential for environmental protection and public health. This contract falls under the utilities and sewage treatment facilities industry. The market for operating and maintaining such facilities is often characterized by specialized expertise and long-term service agreements. Spending in this area is driven by regulatory requirements and the need for reliable infrastructure, with contracts typically awarded through competitive bidding processes.

Small Business Impact

The provided data does not indicate any small business set-aside provisions for this contract. It is possible that subcontracting opportunities may exist, but there is no explicit information to suggest a focus on small business participation. Further investigation into the contractor's subcontracting plan would be necessary to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of State's relevant contracting officers and program managers. Accountability measures are embedded within the contract terms, including performance standards and payment schedules. Transparency is generally maintained through contract award databases and public reporting, though specific operational details may be proprietary. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Environmental Protection Agency (EPA) grants and regulations for wastewater treatment
Army Corps of Engineers civil works projects
Municipal wastewater treatment operations
Public utility management contracts

Risk Flags

Contract duration exceeds 5 years
Potential for single point of failure if contractor performance degrades

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $85.9 million to VEOLIA WATER WEST OPERATING SERVICES INC. OPERATION AND MAINTENANCE OF THE SOUTH BAY WASTEWATER TREATMENT PLANT.

Who is the contractor on this award?

The obligated recipient is VEOLIA WATER WEST OPERATING SERVICES INC.

Which agency awarded this contract?

Awarding agency: Department of State (International Boundary and Water Commission: U.S.-Mexico).

What is the total obligated amount?

The obligated amount is $85.9 million.

What is the period of performance?

Start: 2020-09-28. End: 2026-03-31.

What is the track record of Veolia Water West Operating Services Inc. in managing similar wastewater treatment facilities for federal agencies?

Veolia Water West Operating Services Inc. is a subsidiary of Veolia Environnement, a global leader in environmental services. The company has extensive experience in operating and maintaining water and wastewater treatment facilities across the United States for both public and private sector clients. While specific details on their track record with the Department of State for this particular type of facility are not immediately available in this dataset, their broader experience suggests a capacity to manage such contracts. A deeper dive into their past performance reviews, any past disputes or contract terminations, and client satisfaction surveys for similar federal contracts would provide a more comprehensive assessment of their reliability and performance.

How does the annual cost of this contract compare to similar wastewater treatment plant operations and maintenance contracts?

The annual cost for this contract is approximately $15.6 million ($85.9M / ~5.5 years). Benchmarking this against similar contracts requires detailed information on the size, complexity, and specific services provided by other wastewater treatment plants. Factors such as the volume of wastewater treated, the types of contaminants removed, the age and condition of the infrastructure, and the specific operational requirements (e.g., advanced treatment processes) significantly influence costs. Without access to a database of comparable federal or large municipal contracts with detailed cost breakdowns, a precise comparison is difficult. However, for a large-scale facility, this annual figure appears to be within a plausible range, assuming standard operational demands.

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

Key risks include potential cost overruns due to unforeseen maintenance needs or operational challenges, and service disruption if the contractor encounters significant issues. The firm-fixed-price (FFP) contract structure mitigates cost overrun risk for the government by placing the financial responsibility on the contractor. Performance standards and service level agreements within the contract serve as mitigation for service disruption, potentially including penalties for non-performance. The government's oversight mechanisms and the contractor's own operational protocols are also crucial for risk mitigation. Furthermore, the competitive nature of the award process helps ensure the selection of a capable contractor.

What is the historical spending pattern for wastewater treatment plant operations and maintenance by the Department of State?

The provided data focuses on a single contract and does not offer historical spending patterns for the Department of State regarding wastewater treatment plant operations and maintenance. To assess historical spending, one would need to analyze contract databases over several fiscal years, identifying all contracts related to sewage treatment facilities (NAICS 221320) awarded by the Department of State or its predecessor agencies. This analysis would reveal trends in contract values, number of awards, and types of services procured, allowing for a comparison of current spending against past expenditures and identifying any significant shifts or patterns.

What are the specific performance metrics or service level agreements (SLAs) included in this contract?

The provided summary data does not detail the specific performance metrics or service level agreements (SLAs) for this contract. Typically, contracts for operations and maintenance of critical infrastructure like wastewater treatment plants include detailed SLAs related to effluent quality, operational uptime, response times for emergencies, preventative maintenance schedules, and reporting requirements. These metrics are crucial for ensuring the facility operates effectively and meets regulatory standards. The government would monitor the contractor's adherence to these SLAs, with potential financial implications or corrective actions for non-compliance.

Industry Classification

NAICS: Utilities › Water, Sewage and Other Systems › Sewage Treatment Facilities

Product/Service Code: OPERATION OF GOVT OWNED FACILITY › OPERATE GOVT OWNED BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 191BWC20R0002

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 53 STATE ST 14TH FL, BOSTON, MA, 02109

Business Categories: Category Business, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $86,199,954

Exercised Options: $86,199,954

Current Obligation: $85,880,620

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline