Coast Guard renews used oil disposal contract for $2.3M, raising questions about competition and value

Contract Overview

Contract Amount: $2,335 ($2.3K)

Contractor: Citibank, N.A.

Awarding Agency: Department of Homeland Security

Start Date: 2025-12-29

End Date: 2026-09-30

Contract Duration: 275 days

Daily Burn Rate: $8/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: FY26 USED OIL/OILY WATER RENEWAL TRANSPORT AND DISPOSAL SERVICES FOR USCG STATION MAUI W/UNITEK SOLVENT SERVICE. ACCT. NO.: 8797-20 POP: 1 OCT 2025 TO 30 SEP 2026.

Place of Performance

Location: WAILUKU, MAUI County, HAWAII, 96793

State: Hawaii Government Spending

Plain-Language Summary

Department of Homeland Security obligated $2,334.5 to CITIBANK, N.A. for work described as: FY26 USED OIL/OILY WATER RENEWAL TRANSPORT AND DISPOSAL SERVICES FOR USCG STATION MAUI W/UNITEK SOLVENT SERVICE. ACCT. NO.: 8797-20 POP: 1 OCT 2025 TO 30 SEP 2026. Key points: 1. The contract for used oil and oily water transport and disposal services was awarded without competition. 2. The renewal period spans nearly a full year, from October 2025 to September 2026. 3. The awarded amount of $2.3 million for a single year suggests a potentially high per-unit cost for disposal services. 4. The lack of competition raises concerns about price discovery and the potential for inflated costs. 5. The services are critical for environmental compliance and operational readiness of the USCG Station Maui. 6. The contract falls under the 'All Other Miscellaneous Chemical Product and Preparation Manufacturing' NAICS code.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging without comparable bids or detailed service breakdowns. The $2.3 million price tag for a year of disposal services for a single Coast Guard station appears substantial. Given the sole-source nature, it's difficult to assess if this represents a fair market price or if competitive bidding could have yielded significant savings for the taxpayer. Further analysis of the volume and type of waste handled would be necessary for a more precise value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. The data indicates 'NOT COMPETED' and a single awardee, Citibank, N.A. (likely acting as a payment processor or administrator for the actual service provider). This lack of competition prevents a robust price discovery process, as there were no alternative offers to compare against. It suggests either a unique capability or a failure to adequately explore competitive options.

Taxpayer Impact: Sole-source awards limit the government's ability to secure the best possible pricing, potentially leading to higher costs for taxpayers. Without competition, there is less incentive for the contractor to offer the most cost-effective solution.

Public Impact

The primary beneficiary is the U.S. Coast Guard Station Maui, ensuring compliance with environmental regulations. The service delivered is the critical transport and disposal of used oil and oily water. The geographic impact is localized to Maui, Hawaii, where the Coast Guard station is located. This contract supports environmental protection efforts in Hawaii.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competitive bidding may lead to higher costs for taxpayers.
Sole-source award raises concerns about the thoroughness of market research and procurement strategy.
Limited transparency into the specific services provided and the breakdown of costs.
Potential for overpayment due to absence of price competition.

Positive Signals

Ensures critical environmental compliance for USCG operations in Maui.
Provides a necessary service for the operational readiness of the Coast Guard.
The contract is for a defined period, allowing for future re-evaluation of procurement strategy.

Sector Analysis

The waste management and disposal sector is a critical component of industrial operations, ensuring environmental compliance. This contract falls under the broader chemical product manufacturing and preparation category, highlighting the specialized nature of handling oily waste. While specific market size data for Coast Guard oil disposal is not readily available, the federal government is a significant consumer of such services across various agencies, often involving complex logistical and regulatory requirements. Benchmarking against similar disposal contracts for military or industrial facilities could provide further context on pricing.

Small Business Impact

There is no indication that this contract involved small business set-asides or subcontracting opportunities. The award was made on a sole-source basis, and the primary awardee listed is Citibank, N.A., which is a large financial institution. This suggests that the actual service provider, if different, was not specifically selected through a small business program. The lack of competition limits potential avenues for small business participation.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Homeland Security's Inspector General, with specific program management and accountability residing within the U.S. Coast Guard. Transparency is limited due to the sole-source nature and the absence of publicly available performance metrics or detailed cost breakdowns. The purchase order mechanism, while common, may offer less detailed public reporting than other contract types.

Related Government Programs

Environmental Services Contracts
Waste Disposal Services
Coast Guard Operational Support
Department of Homeland Security Procurement
Chemical Waste Management

Risk Flags

Sole-source award without clear justification
Potential for inflated pricing due to lack of competition
Limited transparency into service scope and cost breakdown
Unknown track record of the actual service provider

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $2,334.5 to CITIBANK, N.A.. FY26 USED OIL/OILY WATER RENEWAL TRANSPORT AND DISPOSAL SERVICES FOR USCG STATION MAUI W/UNITEK SOLVENT SERVICE. ACCT. NO.: 8797-20 POP: 1 OCT 2025 TO 30 SEP 2026.

Who is the contractor on this award?

The obligated recipient is CITIBANK, N.A..

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (U.S. Coast Guard).

What is the total obligated amount?

The obligated amount is $2,334.5.

What is the period of performance?

Start: 2025-12-29. End: 2026-09-30.

What specific services are included in the 'USED OIL/OILY WATER RENEWAL TRANSPORT AND DISPOSAL SERVICES' and what is the estimated volume of waste?

The provided data is limited and does not detail the specific services beyond 'transport and disposal' or the estimated volume of used oil and oily water. This information is crucial for understanding the scope of work and assessing the reasonableness of the $2.3 million contract value. Without these specifics, it's impossible to benchmark the cost per gallon or per ton against industry standards. The 'All Other Miscellaneous Chemical Product and Preparation Manufacturing' NAICS code suggests specialized handling is required, but the exact nature of the waste (e.g., hazardous classification, contamination levels) and the disposal methods are not specified. Further inquiry with the U.S. Coast Guard would be necessary to obtain these critical details.

Why was this contract awarded on a sole-source basis, and what market research was conducted?

The contract was explicitly marked as 'NOT COMPETED,' indicating a sole-source award. The rationale behind this decision is not provided in the data. Typically, sole-source awards are justified when only one responsible source can provide the required supplies or services, or in cases of urgent and compelling need. Without further documentation, it is unclear if the U.S. Coast Guard conducted adequate market research to identify potential competitors or if there were specific technical requirements that only Unitek Solvent Service (implied by the contract description) could meet. This lack of competition raises concerns about whether the government obtained the best value.

How does the $2.3 million annual cost compare to similar waste disposal contracts for other Coast Guard stations or similar federal facilities?

Direct comparison of the $2.3 million annual cost is difficult without more granular data on the volume and type of waste handled, as well as the specific disposal methods required. However, for a single station's annual disposal needs, this amount appears substantial. Comparable contracts for similar environmental services at other federal facilities, especially those with significant maritime operations, would be the most relevant benchmark. If other stations of similar size and operational tempo manage their waste disposal for considerably less, it would suggest this contract may be overpriced. The sole-source nature further complicates a direct value-for-money assessment.

What is the track record of Unitek Solvent Service (or the actual service provider) in handling hazardous or oily waste for government contracts?

The provided data lists 'Unitek Solvent Service' in the contract description, implying they are the likely service provider, although Citibank, N.A. is the listed awardee (potentially for payment processing). Information regarding Unitek Solvent Service's track record, particularly with government contracts and hazardous waste disposal, is not included. A thorough review would require examining past performance evaluations, any past performance issues, and their experience with similar federal agencies or military branches. Without this context, it's difficult to assess the reliability and capability of the contractor chosen through a sole-source process.

What are the potential risks associated with relying on a sole-source provider for essential environmental services?

The primary risk of relying on a sole-source provider for essential environmental services like waste disposal is the lack of competitive pressure, which can lead to higher costs and potentially reduced service quality over time. There's also a risk of vendor lock-in, making it difficult to switch providers even if performance issues arise or better pricing becomes available elsewhere. Furthermore, a sole-source award might indicate a failure in the procurement process to identify or engage with a broader range of qualified vendors, potentially missing out on innovative solutions or more cost-effective options. This dependence can also create vulnerabilities if the sole provider experiences operational disruptions.

Industry Classification

NAICS: Manufacturing › Other Chemical Product and Preparation Manufacturing › All Other Miscellaneous Chemical Product and Preparation Manufacturing

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: 5800 S CORPORATE PL, SIOUX FALLS, SD, 57108

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $2,335

Exercised Options: $2,335

Current Obligation: $2,335

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline