DoD's $59.7M MEC Removal Contract Awarded to Gilbane Federal Amidst Small Business Status Change

Contract Overview

Contract Amount: $59,751,571 ($59.8M)

Contractor: Gilbane Federal

Awarding Agency: Department of Defense

Start Date: 2010-09-29

End Date: 2015-09-29

Contract Duration: 1,826 days

Daily Burn Rate: $32.7K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: MEC REMOVAL AND REMEDIATION, FT ORD, CA ON BORROWED CONTRACT FROM HUNTSVILLE CALLED THE WERS. ITSI CAN NO LONGER BE REPORTED AS A SMALL BUSINESS.

Place of Performance

Location: MONTEREY, MONTEREY County, CALIFORNIA, 93940

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $59.8 million to GILBANE FEDERAL for work described as: MEC REMOVAL AND REMEDIATION, FT ORD, CA ON BORROWED CONTRACT FROM HUNTSVILLE CALLED THE WERS. ITSI CAN NO LONGER BE REPORTED AS A SMALL BUSINESS. Key points: 1. Contract value of $59.7 million over a 5-year period. 2. Awarded under full and open competition after exclusion of sources. 3. Contractor, Gilbane Federal, has a significant presence in federal contracting. 4. The contract is for MEC Removal and Remediation services. 5. The contract was originally associated with a small business, ITSI, which is no longer eligible. 6. Geographic focus on Fort Ord, California. 7. Contract type is Cost Plus Fixed Fee (CPFF).

Value Assessment

Rating: fair

The contract's Cost Plus Fixed Fee structure can lead to cost overruns if not managed tightly. Benchmarking the specific remediation services against similar contracts is challenging without detailed scope information. However, the duration and total value suggest a substantial undertaking. The exclusion of sources in the competition phase warrants further scrutiny regarding its impact on overall value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition After Exclusion of Sources.' This indicates that while the competition was intended to be broad, specific sources were excluded, potentially limiting the number of bidders. The number of bids received (3) is moderate, suggesting some level of competition, but the exclusion clause raises questions about whether the most competitive pricing was achieved.

Taxpayer Impact: The exclusion of certain sources may have limited competitive pressure, potentially leading to higher costs for taxpayers than if a truly open competition had occurred.

Public Impact

The Department of Defense benefits from the remediation of environmental hazards at Fort Ord, California. Services delivered include MEC (Munitions and Explosives of Concern) removal and remediation. The geographic impact is localized to Fort Ord, California, a former military installation. Workforce implications include employment opportunities for specialized environmental remediation professionals.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The original small business association (ITSI) is no longer eligible, raising questions about the transition and potential impact on small business participation.
The 'exclusion of sources' clause in the competition method needs further investigation to understand its justification and impact on competition.
Cost Plus Fixed Fee contracts carry inherent risks of cost escalation if not meticulously managed and overseen.

Positive Signals

Award to a known federal contractor, Gilbane Federal, suggests a level of established capability.
The contract addresses critical environmental remediation needs at a former military site.
The duration of the contract (5 years) indicates a long-term commitment to resolving environmental issues.

Sector Analysis

This contract falls within the Environmental Remediation Services sector, a critical component of government contracting, particularly for agencies managing former military installations. The market for environmental remediation is substantial, driven by regulatory requirements and the need to address historical contamination. Comparable spending benchmarks would typically involve other large-scale environmental cleanup contracts awarded by the DoD or EPA, often characterized by complex scope and significant investment.

Small Business Impact

The contract notes that ITSI, initially associated with this contract, can no longer be reported as a small business. This suggests a potential shift in the small business landscape for this specific contract. Further analysis would be needed to determine if subcontracting opportunities exist for small businesses and how the change in ITSI's status impacts overall small business utilization goals for this contract.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. Transparency is generally facilitated through contract award databases and reporting requirements. The specific oversight mechanisms for a CPFF contract would include rigorous review of costs, progress reports, and adherence to the Statement of Work. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Environmental Remediation Services
Munitions and Explosives of Concern (MEC) Cleanup
Department of Defense Base Realignment and Closure (BRAC) environmental programs
Federal Remediation Services

Risk Flags

Potential for cost overruns due to CPFF contract type.
Limited competition due to exclusion of sources.
Change in small business status impacting subcontracting goals.
Complexity of MEC removal and remediation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $59.8 million to GILBANE FEDERAL. MEC REMOVAL AND REMEDIATION, FT ORD, CA ON BORROWED CONTRACT FROM HUNTSVILLE CALLED THE WERS. ITSI CAN NO LONGER BE REPORTED AS A SMALL BUSINESS.

Who is the contractor on this award?

The obligated recipient is GILBANE FEDERAL.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $59.8 million.

What is the period of performance?

Start: 2010-09-29. End: 2015-09-29.

What was the specific reason for excluding certain sources in the 'Full and Open Competition After Exclusion of Sources' award method?

The provided data does not specify the exact reasons for excluding certain sources. This award method, while allowing for full and open competition among the remaining eligible bidders, implies that some pre-qualification or specific criteria led to the exclusion of others. Common reasons for such exclusions can include specific technical capabilities, past performance requirements, or security clearances that only a subset of potential contractors could meet. Understanding the justification for these exclusions is crucial for assessing whether the competition was truly as robust as possible and if it potentially limited price discovery for the government. Further investigation into the solicitation documents and award rationale would be necessary to ascertain the precise grounds for exclusion.

How does the Cost Plus Fixed Fee (CPFF) contract type impact the government's risk and potential for cost overruns in this MEC removal project?

The Cost Plus Fixed Fee (CPFF) contract type means the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. This structure shifts a significant portion of the cost risk to the government, especially in complex remediation projects where unforeseen conditions can arise. While the fixed fee provides some predictability for the contractor's profit, the total project cost can escalate if the actual costs exceed initial estimates. Effective government oversight, stringent cost controls, and a well-defined scope of work are critical to mitigating the risk of cost overruns under a CPFF arrangement. The government's ability to manage and audit the contractor's costs is paramount to ensuring value for money.

What is the significance of ITSI no longer being eligible as a small business in relation to this contract?

The data indicates that ITSI, which was previously associated with this contract and could be reported as a small business, is no longer eligible. This change is significant because it impacts the government's ability to meet small business utilization goals for this specific contract. It raises questions about whether ITSI was a prime contractor or a subcontractor, and what the implications are for the remaining contract performance period. If ITSI was a prime, the contract may have been re-competed or transferred. If a subcontractor, the prime contractor (Gilbane Federal) may need to find a replacement small business, potentially affecting subcontracting plans and opportunities. This status change warrants a review of the contract's small business subcontracting plan and overall achievement.

Can the $59.7 million contract value be benchmarked against similar MEC removal contracts awarded by the DoD or other federal agencies?

Benchmarking the $59.7 million contract value requires detailed comparison with similar Munitions and Explosives of Concern (MEC) removal and remediation contracts. Key factors for comparison include the geographic location, the specific type and extent of contamination, the complexity of the remediation required, the contract duration, and the contract type (e.g., CPFF, fixed-price). Without access to the detailed scope of work and performance metrics for this contract, direct benchmarking is challenging. However, large-scale environmental remediation projects for the DoD can range from tens to hundreds of millions of dollars, depending on the site's history and remediation needs. The value appears substantial, reflecting the significant environmental challenges often associated with former military installations like Fort Ord.

What are the potential long-term environmental and economic impacts of this MEC removal and remediation project at Fort Ord?

The long-term environmental impact of this project is the successful remediation of hazardous MEC, rendering the land safe for future use, whether it be for conservation, development, or other purposes. This mitigates risks to human health and the environment. Economically, the project involves significant federal spending, supporting jobs in the remediation sector and potentially stimulating local economies through contractor activities. The successful completion of remediation can also unlock the economic potential of the former Fort Ord land, enabling redevelopment and contributing to the regional economy. The remediation process itself represents an investment in environmental stewardship and public safety.

Industry Classification

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

Product/Service Code: NATURAL RESOURCES MANAGEMENT › ENVIRONMENTAL SYSTEMS PROTECTION

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 3

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Gilbane, Inc. (UEI: 022726165)

Address: 2730 SHADELANDS DR # 100, WALNUT CREEK, CA, 10

Business Categories: Category Business, Minority Owned Business, Small Business, Special Designations, Subchapter S Corporation, Indian (Subcontinent) American Owned Business, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $64,808,097

Exercised Options: $64,808,097

Current Obligation: $59,751,571

Subaward Activity

Number of Subawards: 517

Total Subaward Amount: $624,340,211

Contract Characteristics

Multi-Year Contract: Yes

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W912DY10D0024

IDV Type: IDC

Timeline