Army awarded $1.84B for well drilling and exploratory services, with a significant portion going to one contractor

Contract Overview

Contract Amount: $1,842,081,293 ($1.8B)

Contractor: Washington Government Environmental Services Company LLC

Awarding Agency: Department of Defense

Start Date: 1999-10-13

End Date: 2020-09-30

Contract Duration: 7,658 days

Daily Burn Rate: $240.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS AWARD FEE

Sector: Construction

Official Description: 199712!2100!0084!AA09 !U.S. ARMY INDUSTRIAL OPERATIONS !DAAA0996C0018 !A!*!P00006 !19961101!19970303!001343953!001343953!001343953!N!79500!CBS CORPORATION !11 STANWIX ST !PITTSBURGH !PA!15222!61024!003!42!PITTSBURGH WEST END !ALLEGHENY !PENN !0001!+000001573241!N!N!000000000000!F015!WELL DRILLING/EXPLORATORY SERVICES !C2 !CONSTRUCTION !1000!NOT DISCERNABLE OR CLASSIFIED !9511!3!*!*!C!B!A!*!A !N!R!2!002!C!* !Z!Y!Z!* !* !N!C!*!A!A!A!A!A!*!* !*!N!A!B!N!*!*!*!*!*!

Place of Performance

Location: ANNISTON, CALHOUN County, ALABAMA, 36201

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $1.84 billion to WASHINGTON GOVERNMENT ENVIRONMENTAL SERVICES COMPANY LLC for work described as: 199712!2100!0084!AA09 !U.S. ARMY INDUSTRIAL OPERATIONS !DAAA0996C0018 !A!*!P00006 !19961101!19970303!001343953!001343953!001343953!N!79500!CBS CORPORATION !11 STANWIX ST !PITTSBURGH !PA!15222!61024!003!42!PITTSBURGH WEST END !ALLEGH… Key points: 1. The contract's substantial value suggests a long-term need for specialized environmental and drilling services. 2. A high number of contract modifications (2) indicates potential scope changes or evolving project requirements. 3. The contract's duration of over 20 years points to a sustained operational requirement. 4. The use of a Cost Plus Award Fee (CPAF) contract type suggests performance incentives are tied to contractor achievement. 5. The primary contractor, CBS Corporation, received the vast majority of the awarded funds, raising questions about competition intensity. 6. The contract was awarded in 1996, with an end date in 2020, spanning a significant period of U.S. military operations and environmental regulations.

Value Assessment

Rating: fair

The total award amount of $1.84 billion over more than two decades is substantial. Benchmarking this against similar large-scale environmental remediation or drilling contracts is difficult without more specific service details. However, the sheer scale suggests significant investment. The Cost Plus Award Fee (CPAF) structure implies that the final cost could vary based on performance, making a direct price comparison challenging without knowing the award fees earned. The contract's longevity also suggests a consistent, albeit high, level of expenditure.

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 offers. However, the data shows only two bids were received. While competition was technically open, the low number of bidders might suggest barriers to entry, specialized requirements, or a lack of market interest, potentially impacting price discovery.

Taxpayer Impact: A full and open competition with only two bidders may not have driven the most competitive pricing for taxpayers. The government may have had limited leverage to negotiate the lowest possible price.

Public Impact

The U.S. Army is the primary beneficiary, receiving essential services for environmental operations and potentially infrastructure development. Services include well drilling and exploratory functions, critical for resource management, environmental monitoring, and site assessment. The contract's geographic impact is primarily within Alabama (ST, SN), where the contractor is located. The contract likely supports a workforce involved in specialized drilling, environmental science, and project management.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition (2 bids) despite full and open solicitation could indicate market concentration or high barriers to entry.
The long contract duration (over 20 years) might obscure current market rates and technological advancements.
Cost Plus Award Fee (CPAF) contracts can sometimes lead to higher costs if award fees are consistently maximized without strict cost controls.

Positive Signals

Awarded under full and open competition, adhering to principles of broad market access.
The contract's longevity suggests a stable and reliable service provider for the Army's long-term needs.
The existence of two bids, even if low, demonstrates some level of market engagement.

Sector Analysis

This contract falls within the Construction sector, specifically related to specialized services like well drilling and exploratory work. The market for such services is often niche, requiring specific equipment, expertise, and regulatory compliance. The U.S. Army, as a major federal agency, represents a significant client for large-scale construction and environmental services. Comparable spending benchmarks would depend heavily on the specific type and scale of drilling and exploration required, but $1.84 billion over two decades is a substantial commitment.

Small Business Impact

The contract data indicates that this was not a small business set-aside (ss: false, sb: false). There is no explicit information regarding subcontracting plans or performance. Therefore, the direct impact on the small business ecosystem is likely minimal unless the prime contractor actively engages small businesses for specialized support.

Oversight & Accountability

Oversight for this contract would fall under the Department of Defense and specifically the Department of the Army. As a Cost Plus Award Fee contract, performance metrics and cost controls would be key areas of oversight. Transparency is facilitated by contract databases, but detailed performance reports and award fee justifications are typically internal. Inspector General jurisdiction would apply to any allegations of fraud, waste, or abuse.

Related Government Programs

Environmental Remediation Services
Construction and Engineering Services
Department of Defense Procurement
Army Corps of Engineers Contracts
Resource Exploration and Development

Risk Flags

Long contract duration may obscure current market value.
Limited competition (2 bids) despite open solicitation.
Cost Plus Award Fee structure requires careful performance monitoring.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $1.84 billion to WASHINGTON GOVERNMENT ENVIRONMENTAL SERVICES COMPANY LLC. 199712!2100!0084!AA09 !U.S. ARMY INDUSTRIAL OPERATIONS !DAAA0996C0018 !A!*!P00006 !19961101!19970303!001343953!001343953!001343953!N!79500!CBS CORPORATION !11 STANWIX ST !PITTSBURGH !PA!15222!61024!003!42!PITTSBURGH WEST END !ALLEGHENY !PENN !0001!+000001573241!N!N!000000000000!F015!WELL DRILLING/EXPLORATORY SERVICES !C2 !CONSTRUCTION !1000!NOT DISCERNABLE OR CLASSIFIED !9511!3!*!*!C!B!A!*!A !N!R!2!0

Who is the contractor on this award?

The obligated recipient is WASHINGTON GOVERNMENT ENVIRONMENTAL SERVICES COMPANY LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $1.84 billion.

What is the period of performance?

Start: 1999-10-13. End: 2020-09-30.

What was the specific nature of the 'well drilling/exploratory services' provided under this contract?

The provided data categorizes the service as 'WELL DRILLING/EXPLORATORY SERVICES' under the PSC code '7950'. While the specific details are not fully elaborated in the summary data, this typically involves activities such as drilling boreholes for water supply, geological surveys, environmental monitoring (e.g., groundwater sampling), or resource exploration. Given the Army's operational context, these services could be related to base infrastructure development, environmental compliance, or site assessments for potential contamination.

How did the awarded amount of $1.84 billion compare to the initial estimated cost or budget for this contract?

The provided data does not include information on the initial estimated cost or budget for this contract. It only presents the total amount awarded ($1,842,081,292.91). Without the initial estimate, it is impossible to determine if the final award amount represented an increase or decrease relative to expectations. This lack of comparative budget data limits the ability to assess cost efficiency or potential overruns from the outset.

What factors contributed to the contract's extensive duration of over 20 years (7658 days)?

The contract's duration of over 20 years (7658 days) suggests a requirement for long-term, sustained services. This could be due to the nature of the work, such as ongoing environmental monitoring, long-term infrastructure projects, or phased exploration activities. Alternatively, it might reflect a strategic decision by the Army to secure services over an extended period through a single, large contract vehicle, potentially for stability and simplified administration, rather than issuing multiple shorter-term contracts.

What was the performance of CBS Corporation in relation to the 'award fee' component of the contract?

The contract type is Cost Plus Award Fee (CPAF). While the data confirms this structure, it does not provide specific details on the award fees earned by CBS Corporation. To assess their performance in relation to the award fee, one would need access to the contract's performance evaluations and the justification for any award fees paid. These details are typically found in internal government performance reports and are not usually publicly disclosed in summary contract data.

Were there any significant contract modifications or changes in scope during the contract's lifecycle?

The data indicates there were two modifications (no: 2) to this contract. While the nature and impact of these modifications are not detailed, the presence of modifications suggests that the scope, timeline, or cost of the contract may have been adjusted after the initial award. Two modifications over a 20+ year period might be considered relatively low for such a long and substantial contract, potentially indicating a stable scope or that significant changes were handled through separate contract actions.

How does the spending on this contract compare to other similar Army environmental or drilling contracts?

Direct comparison is challenging without specific details on the services rendered and market rates at the time of award and throughout the contract's life. However, $1.84 billion is a very significant sum, placing it among the larger contracts for specialized services. The Army, and the Department of Defense broadly, frequently award large contracts for infrastructure, environmental services, and operational support. This contract's value suggests it addressed a critical and long-standing need for the U.S. Army.

Industry Classification

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

Product/Service Code: NATURAL RESOURCES MANAGEMENT › NATURAL RESOURCE CONSERVERVAT SVCS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: AECOM (UEI: 153561212)

Address: 1933 S CENTENNIAL AVE. SE, AIKEN, SC, 29803

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $4,814

Exercised Options: $4,814

Current Obligation: $1,842,081,293

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline