DOE awards $820.6M for Hanford cleanup, with $98M for initial task order on end states and base operations

Contract Overview

Contract Amount: $820,582,999 ($820.6M)

Contractor: Central Plateau Cleanup Company, LLC

Awarding Agency: Department of Energy

Start Date: 2024-10-01

End Date: 2027-09-30

Contract Duration: 1,094 days

Daily Burn Rate: $750.1K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS AWARD FEE

Sector: Other

Official Description: HANFORD CENTRAL PLATEAU CLEANUP CONTRACT - TASK ORDER 7 - END STATES & BASE OPS. THIS TASK ORDER IS ISSUED AS AN UNDEFINITIZED TASK ORDER PURSUANT TO CLAUSE H.49, TASK ORDERING PROCEDURE. NOTICE-TO-PROCEED AND A NOT-TO-EXCEED VALUE OF $98,000,000

Place of Performance

Location: RICHLAND, BENTON County, WASHINGTON, 99352

State: Washington Government Spending

Plain-Language Summary

Department of Energy obligated $820.6 million to CENTRAL PLATEAU CLEANUP COMPANY, LLC for work described as: HANFORD CENTRAL PLATEAU CLEANUP CONTRACT - TASK ORDER 7 - END STATES & BASE OPS. THIS TASK ORDER IS ISSUED AS AN UNDEFINITIZED TASK ORDER PURSUANT TO CLAUSE H.49, TASK ORDERING PROCEDURE. NOTICE-TO-PROCEED AND A NOT-TO-EXCEED VALUE OF $98,000,000 Key points: 1. The contract focuses on critical environmental remediation and base operations at the Hanford site. 2. This task order represents a significant investment in long-term cleanup efforts, addressing complex environmental challenges. 3. The award method, an undefinitized task order, suggests an urgent need for services while final terms are negotiated. 4. The contractor, Central Plateau Cleanup Company, LLC, is responsible for a substantial portion of the Hanford cleanup mission. 5. Performance-based contract type (Cost Plus Award Fee) incentivizes contractor efficiency and effectiveness. 6. The contract duration of approximately three years for this task order indicates a phased approach to complex cleanup.

Value Assessment

Rating: good

The task order's not-to-exceed value of $98 million for initial work is a component of a larger, multi-billion dollar contract. Benchmarking this specific task order's value is challenging without more granular data on the scope of 'end states & base ops.' However, the overall contract value of $820.6 million for remediation services in Washington suggests a significant investment in environmental cleanup. The Cost Plus Award Fee structure allows for performance-based incentives, which can drive value if managed effectively.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to compete for this significant remediation work. This competitive process is designed to ensure fair pricing and access to the best available capabilities. The specific number of bidders is not provided, but the full and open nature suggests a robust competition that should theoretically lead to a more favorable outcome for the government.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that drives down costs and encourages innovation, leading to more efficient use of public funds for essential services like environmental cleanup.

Public Impact

The primary beneficiaries are the U.S. taxpayers, who will see progress in the cleanup of a major environmental hazard. Services delivered include remediation of contaminated sites and ongoing base operations essential for the cleanup mission. The geographic impact is concentrated in Washington state, specifically at the Hanford site. Workforce implications include the creation and sustainment of jobs in specialized environmental remediation and support services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The use of an undefinitized task order (UTO) can introduce financial risk if not promptly definitized, potentially leading to higher costs.
Cost Plus Award Fee contracts require robust oversight to ensure that award fees are earned based on objective performance criteria and not merely on effort.
The complexity of Hanford cleanup means inherent risks in schedule delays and cost overruns, even with competitive awards.

Positive Signals

Awarded under full and open competition, suggesting a strong market response and potential for competitive pricing.
The Cost Plus Award Fee structure incentivizes contractor performance and efficiency, aligning contractor goals with government objectives.
The contractor, Central Plateau Cleanup Company, LLC, is likely experienced in large-scale environmental remediation projects, bringing specialized expertise.

Sector Analysis

This contract falls within the Environmental Remediation Services sector, a critical component of the broader government contracting landscape, particularly for agencies managing legacy industrial sites. The Hanford site is one of the most complex and expensive environmental cleanup projects in the world. Spending in this sector is driven by regulatory requirements and long-term stewardship needs. Comparable spending benchmarks are difficult to establish due to the unique scale and complexity of Hanford, but the overall federal investment in environmental cleanup is substantial.

Small Business Impact

The provided data indicates that small business participation (ss: false, sb: false) is not a primary focus for this specific task order or the overall contract award. There is no indication of small business set-asides. Subcontracting opportunities for small businesses may exist within the larger scope of work, but this contract itself is not directly set aside for them. This suggests that the primary contractor is expected to handle the core remediation and base operations, potentially with larger subcontractors.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of Energy's various program offices responsible for the Hanford site cleanup. Accountability measures are embedded within the Cost Plus Award Fee structure, which ties a portion of the contractor's compensation to performance. Transparency is generally maintained through contract reporting requirements, though specific details of task order execution may be less public. The Inspector General's office for the Department of Energy would have jurisdiction to investigate any potential fraud, waste, or abuse.

Related Government Programs

Hanford Site Cleanup
Department of Energy Environmental Management
Nuclear Site Remediation
Hazardous Waste Management Contracts
Federal Environmental Cleanup Programs

Risk Flags

Undefinitized Task Order (UTO) requires prompt definitization to avoid potential cost increases.
Cost Plus Award Fee (CPAF) contracts necessitate rigorous oversight to ensure award fees are earned appropriately.
Complexity of Hanford cleanup presents inherent risks of schedule delays and cost overruns.
Defining and achieving 'end states' for environmental remediation can involve significant technical and regulatory uncertainties.

Frequently Asked Questions

What is this federal contract paying for?

Department of Energy awarded $820.6 million to CENTRAL PLATEAU CLEANUP COMPANY, LLC. HANFORD CENTRAL PLATEAU CLEANUP CONTRACT - TASK ORDER 7 - END STATES & BASE OPS. THIS TASK ORDER IS ISSUED AS AN UNDEFINITIZED TASK ORDER PURSUANT TO CLAUSE H.49, TASK ORDERING PROCEDURE. NOTICE-TO-PROCEED AND A NOT-TO-EXCEED VALUE OF $98,000,000

Who is the contractor on this award?

The obligated recipient is CENTRAL PLATEAU CLEANUP COMPANY, LLC.

Which agency awarded this contract?

Awarding agency: Department of Energy (Department of Energy).

What is the total obligated amount?

The obligated amount is $820.6 million.

What is the period of performance?

Start: 2024-10-01. End: 2027-09-30.

What is the historical spending trend for the Hanford Central Plateau Cleanup Contract?

Historical spending data for the Hanford Central Plateau Cleanup Contract would reveal the total amount obligated and expended over its lifecycle. Analyzing this trend can indicate the pace of cleanup, identify periods of accelerated or decelerated activity, and highlight any significant cost variances from initial projections. For instance, a consistent upward trend might suggest increasing complexity or scope, while significant fluctuations could point to funding challenges, contract modifications, or shifts in cleanup strategy. Understanding past spending patterns is crucial for forecasting future budgetary needs and assessing the long-term financial commitment required for the complete remediation of the Central Plateau.

How does the pricing structure of this Cost Plus Award Fee (CPAF) contract compare to other large-scale environmental remediation contracts?

Cost Plus Award Fee contracts are common for complex, high-risk projects where performance outcomes are critical but difficult to define precisely upfront. In CPAF contracts, the contractor is reimbursed for allowable costs plus a fee that consists of a fixed base amount and an award amount, which is earned based on meeting or exceeding performance objectives. Compared to fixed-price contracts, CPAF offers more flexibility but requires robust government oversight to manage costs and ensure award fees are justified. For large-scale environmental remediation, CPAF is often preferred over purely cost-plus-incentive-fee (CPIF) or cost-plus-fixed-fee (CPFF) because it allows for subjective performance evaluations crucial in complex cleanup scenarios. Benchmarking requires comparing the target fee percentages, award fee criteria, and overall cost structures against similar DOE or EPA remediation contracts, considering the specific risks and technical challenges involved.

What are the key performance indicators (KPIs) used to determine the award fee for Central Plateau Cleanup Company, LLC?

Key Performance Indicators (KPIs) for a Cost Plus Award Fee contract like this one are typically detailed in the contract's Performance Work Statement (PWS) and the Statement of Objectives (SOO). For environmental remediation and base operations at Hanford, these KPIs would likely focus on critical areas such as: 1. Safety Performance: Incident rates, compliance with safety protocols. 2. Environmental Compliance: Meeting regulatory standards, minimizing environmental releases. 3. Schedule Adherence: Completing milestones on time. 4. Cost Control: Managing expenditures within budget targets. 5. Technical Performance: Effectiveness of cleanup activities, quality of work. 6. Mission Accomplishment: Progress towards defined end states and operational efficiency. The specific weighting and targets for each KPI determine the potential award fee, incentivizing the contractor to excel across these vital dimensions of the cleanup mission.

What is the track record of Central Plateau Cleanup Company, LLC on similar large-scale environmental remediation projects?

Central Plateau Cleanup Company, LLC (CPCC) was formed specifically to address the Hanford Central Plateau cleanup mission. Its parent companies, however, possess extensive experience. For example, Fluor Corporation, a major partner in CPCC, has a long history in managing complex environmental projects, including nuclear site cleanup and remediation at various Department of Energy (DOE) and Department of Defense (DOD) sites. CH2M Hill (now Jacobs) also has significant experience in environmental services and large-scale project management. The formation of CPCC suggests a strategic consolidation of expertise tailored for the unique challenges at Hanford. Evaluating CPCC's track record involves assessing the performance of its parent entities on comparable projects, focusing on their ability to manage scope, cost, schedule, safety, and environmental compliance in high-risk, highly regulated environments.

What are the potential risks associated with the 'end states & base ops' scope of this task order?

The 'end states & base ops' scope for the Hanford Central Plateau cleanup involves defining and achieving final cleanup objectives for various facilities and waste sites, alongside maintaining the necessary infrastructure and support services (base operations) to enable these activities. Potential risks include: 1. Technical Uncertainty: Defining achievable 'end states' for highly contaminated or complex waste forms can be technically challenging, leading to scope creep or unforeseen remediation methods. 2. Schedule Delays: The interconnectedness of cleanup activities and base operations means delays in one area can cascade. 3. Cost Overruns: Unforeseen site conditions, regulatory changes, or the need for more complex technologies can escalate costs. 4. Stakeholder Alignment: Ensuring agreement among the DOE, regulatory agencies (like the EPA and Washington State), and tribal nations on the definition and achievement of 'end states' is critical and can be complex. 5. Base Operations Efficiency: Maintaining cost-effective and reliable base operations (e.g., utilities, security, waste management) is essential but can be challenging as facilities age or cleanup progresses.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Remediation and Other Waste Management Services › Remediation Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: Pae-Parsons Global Logistics Services, LLC

Address: 106 NEWBERRY ST SW, AIKEN, SC, 29801

Business Categories: Category Business, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $1,619,017,225

Exercised Options: $1,619,017,225

Current Obligation: $820,582,999

Actual Outlays: $575,755,669

Subaward Activity

Number of Subawards: 262

Total Subaward Amount: $101,095,640

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 89303320DEM000030

IDV Type: IDC

Timeline