DOE's $7 Billion Hanford Site Remediation Contract Awarded to CH2M HILL for Environmental Cleanup
Contract Overview
Contract Amount: $7,065,250,860 ($7.1B)
Contractor: CH2M Hill Plateau Remediation Company
Awarding Agency: Department of Energy
Start Date: 2008-06-19
End Date: 2021-01-24
Contract Duration: 4,602 days
Daily Burn Rate: $1.5M/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: COST PLUS AWARD FEE
Sector: Other
Official Description: PLATEAU REMEDIATION CONTRACT - CONTINUE ENVIRONMENTAL REMEDIATION OF SELECT PORTIONS OF THE HANFORD SITE.
Place of Performance
Location: RICHLAND, BENTON County, WASHINGTON, 99354
Plain-Language Summary
Department of Energy obligated $7.07 billion to CH2M HILL PLATEAU REMEDIATION COMPANY for work described as: PLATEAU REMEDIATION CONTRACT - CONTINUE ENVIRONMENTAL REMEDIATION OF SELECT PORTIONS OF THE HANFORD SITE. Key points: 1. Significant long-term investment in environmental remediation at the Hanford Site. 2. CH2M HILL Plateau Remediation Company holds a substantial contract for ongoing cleanup. 3. Contract type is Cost Plus Award Fee, incentivizing performance. 4. Focus on environmental remediation services within the Department of Energy's portfolio.
Value Assessment
Rating: good
The contract value of over $7 billion over its life is substantial. Benchmarking against similar large-scale environmental remediation contracts is difficult due to unique site complexities and long durations. However, the Cost Plus Award Fee structure suggests an attempt to control costs while incentivizing efficient performance.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded through full and open competition, indicating a robust price discovery process. This method allows multiple qualified contractors to bid, fostering competition and potentially leading to better pricing for the government.
Taxpayer Impact: Taxpayer funds are being utilized for a critical environmental cleanup effort, aiming to mitigate long-term risks associated with the Hanford Site's historical operations.
Public Impact
Ensures continued cleanup of hazardous materials at a former nuclear production facility. Supports long-term environmental protection and public health in Washington State. Creates and sustains jobs in the environmental services and construction sectors. Addresses legacy environmental contamination from decades of nuclear material production.
Waste & Efficiency Indicators
Waste Risk Score: 70 / 10
Warning Flags
- Long contract duration (over 12 years) increases risk of cost overruns and scope creep.
- Cost Plus Award Fee contracts can sometimes lead to higher costs than fixed-price contracts if not managed tightly.
- Complexity of environmental remediation at a large, historic site presents inherent challenges.
Positive Signals
- Awarded through full and open competition, suggesting competitive pricing.
- Cost Plus Award Fee structure incentivizes contractor performance and efficiency.
- Long-term commitment ensures sustained focus on critical environmental cleanup.
Sector Analysis
This contract falls within the environmental remediation sector, a critical but often costly area for government agencies. Spending benchmarks for such large-scale, long-term cleanup projects are highly variable due to site-specific conditions and regulatory requirements.
Small Business Impact
While the prime contractor is CH2M HILL PLATEAU REMEDIATION COMPANY, the contract details do not specify the extent of small business participation. Large federal contracts often include subcontracting goals for small businesses, but this information is not provided here.
Oversight & Accountability
The Department of Energy is responsible for overseeing this contract. Given the scale and duration, robust oversight mechanisms are crucial to ensure cost control, adherence to environmental standards, and effective project management.
Related Government Programs
- Remediation Services
- Department of Energy Contracting
- Department of Energy Programs
Risk Flags
- Contract duration
- Cost Plus Award Fee structure
- Complexity of remediation tasks
- Potential for environmental incidents
- Long-term monitoring requirements
Tags
remediation-services, department-of-energy, wa, definitive-contract, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $7.07 billion to CH2M HILL PLATEAU REMEDIATION COMPANY. PLATEAU REMEDIATION CONTRACT - CONTINUE ENVIRONMENTAL REMEDIATION OF SELECT PORTIONS OF THE HANFORD SITE.
Who is the contractor on this award?
The obligated recipient is CH2M HILL PLATEAU REMEDIATION COMPANY.
Which agency awarded this contract?
Awarding agency: Department of Energy (Department of Energy).
What is the total obligated amount?
The obligated amount is $7.07 billion.
What is the period of performance?
Start: 2008-06-19. End: 2021-01-24.
What are the key performance indicators (KPIs) used to determine the award fee for CH2M HILL PLATEAU REMEDIATION COMPANY, and how are they measured?
The specific KPIs for the Cost Plus Award Fee are not detailed in the provided data. Typically, these would include metrics related to schedule adherence, cost control, safety performance, environmental compliance, and successful completion of specific remediation milestones. The Department of Energy would establish these metrics and a system for regular evaluation to determine the contractor's eligibility for award fees.
What is the projected long-term environmental impact of this remediation effort, and are there any residual risks post-completion?
The primary goal is to significantly reduce environmental hazards at the Hanford Site, protecting groundwater, soil, and air quality. While the contract aims for comprehensive cleanup, residual risks may persist depending on the nature of the contamination and the feasibility of complete removal. Long-term monitoring and potential future interventions might still be necessary for certain contaminants.
How does the cost-plus-award-fee structure compare in terms of overall cost-effectiveness to other contract types for similar large-scale environmental projects?
Cost-plus-award-fee contracts offer flexibility for complex projects where scope is not fully defined, incentivizing performance through award fees. However, they can potentially lead to higher costs than fixed-price contracts if not managed diligently, as costs are reimbursed. For highly uncertain or technically challenging remediation, it can be more effective than fixed-price, but requires strong government oversight to ensure value.
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 NONBUILDINGS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: DERP0608RL14788
Offers Received: 2
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Parent Company: Pae-Parsons Global Logistics Services, LLC
Address: 3190 GEORGE WASHINGTON WAY, STE-B, RICHLAND, WA, 99354
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $7,333,351,746
Exercised Options: $7,330,044,011
Current Obligation: $7,065,250,860
Actual Outlays: $544,991,383
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2008-06-19
Current End Date: 2021-01-24
Potential End Date: 2021-01-24 00:00:00
Last Modified: 2025-04-25
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