DOE awards $13.4M contract for environmental impact statement, highlighting need for thorough project planning
Contract Overview
Contract Amount: $13,360,000 ($13.4M)
Contractor: Potomac-Hudson Engineering Inc
Awarding Agency: Department of Energy
Start Date: 2005-09-22
End Date: 2008-09-30
Contract Duration: 1,104 days
Daily Burn Rate: $12.1K/day
Competition Type: COMPETITIVE DELIVERY ORDER
Number of Offers Received: 2
Pricing Type: COST PLUS INCENTIVE
Sector: Other
Official Description: CONTRACTOR REQUIRED TO PROVIDE FINAL ENVIRONMENTAL IMPACT STATEMENT FOR RAIL ALIGNMENT AND SUPPORTING ENVIRONMENTAL DOCUMENTATION
Place of Performance
Location: LAS VEGAS, CLARK County, NEVADA, 89134
State: Nevada Government Spending
Plain-Language Summary
Department of Energy obligated $13.4 million to POTOMAC-HUDSON ENGINEERING INC for work described as: CONTRACTOR REQUIRED TO PROVIDE FINAL ENVIRONMENTAL IMPACT STATEMENT FOR RAIL ALIGNMENT AND SUPPORTING ENVIRONMENTAL DOCUMENTATION Key points: 1. Contract focuses on critical environmental documentation for a major infrastructure project. 2. Competition dynamics suggest a potentially competitive bidding process for specialized environmental services. 3. Risk indicators include the cost-plus incentive pricing structure, which can lead to cost overruns if not managed carefully. 4. Performance context is tied to the successful delivery of a comprehensive environmental impact statement. 5. Sector positioning is within the government's need for environmental compliance and infrastructure development support.
Value Assessment
Rating: fair
The contract value of $13.4 million for an environmental impact statement appears within a reasonable range for complex projects requiring extensive analysis and documentation. However, without specific benchmarks for similar rail alignment EIS projects in Nevada, a precise value-for-money assessment is challenging. The cost-plus incentive fee structure introduces variability and necessitates close oversight to ensure costs remain controlled and the contractor is incentivized for efficiency.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded as a competitive delivery order, indicating that multiple vendors likely competed for this specific task. The presence of two bids suggests a degree of competition, which is generally positive for price discovery. However, the specifics of the competition, such as the number of qualified bidders and the range of proposals, would provide a clearer picture of the competitive landscape.
Taxpayer Impact: A competitive award process helps ensure that taxpayer dollars are used efficiently by driving down costs through market forces. The existence of multiple bids suggests that the government received competitive pricing for these specialized environmental services.
Public Impact
The primary beneficiaries are the Department of Energy and potentially the public, through the assurance of environmentally sound infrastructure development. The service delivered is a critical environmental impact statement, essential for regulatory compliance and informed decision-making. The geographic impact is focused on Nevada, where the rail alignment project is situated. Workforce implications include employment for environmental scientists, engineers, and support staff involved in preparing the documentation.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost-plus incentive fee contracts can lead to cost overruns if not closely monitored.
- The duration of the contract (1104 days) suggests a complex and potentially lengthy process, increasing the risk of scope creep or unforeseen challenges.
- Dependence on a single contractor for a critical environmental document could pose a risk if performance issues arise.
Positive Signals
- Awarded through a competitive delivery order, indicating potential for good value.
- The contract specifies a clear deliverable (Environmental Impact Statement), providing a defined objective.
- The contractor, Potomac-Hudson Engineering Inc., has experience in engineering and environmental services, suggesting relevant expertise.
Sector Analysis
The environmental consulting sector is a significant part of the broader professional services market supporting government infrastructure projects. Federal agencies like the Department of Energy frequently contract for Environmental Impact Statements (EIS) and other environmental compliance services, especially for large-scale projects such as energy infrastructure or transportation. Spending in this area is driven by regulatory requirements (like NEPA) and the government's commitment to sustainable development. Comparable spending benchmarks would typically be found by analyzing other EIS contracts for similar project types and scales.
Small Business Impact
There is no indication that this contract was specifically set aside for small businesses, nor is there information on subcontracting plans. The contractor, Potomac-Hudson Engineering Inc., is not explicitly identified as a small business in the provided data. Therefore, the direct impact on the small business ecosystem is unclear without further details on subcontracting opportunities.
Oversight & Accountability
Oversight for this contract would primarily fall under the Department of Energy's contracting and program management offices. Accountability measures would be tied to the successful and timely delivery of the environmental impact statement according to the contract's terms and conditions. Transparency is generally facilitated through federal contract databases, though the detailed internal review processes are not publicly disclosed.
Related Government Programs
- National Environmental Policy Act (NEPA) Compliance
- Environmental Impact Statements
- Infrastructure Project Planning
- Energy Sector Development
Risk Flags
- Cost Overrun Risk (CPIF)
- Scope Creep Potential
- Timeliness of Delivery
Tags
department-of-energy, environmental-impact-statement, rail-alignment, competitive-delivery-order, cost-plus-incentive-fee, nevada, infrastructure, environmental-consulting, federal-contract, large-project
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $13.4 million to POTOMAC-HUDSON ENGINEERING INC. CONTRACTOR REQUIRED TO PROVIDE FINAL ENVIRONMENTAL IMPACT STATEMENT FOR RAIL ALIGNMENT AND SUPPORTING ENVIRONMENTAL DOCUMENTATION
Who is the contractor on this award?
The obligated recipient is POTOMAC-HUDSON ENGINEERING INC.
Which agency awarded this contract?
Awarding agency: Department of Energy (Department of Energy).
What is the total obligated amount?
The obligated amount is $13.4 million.
What is the period of performance?
Start: 2005-09-22. End: 2008-09-30.
What is the track record of Potomac-Hudson Engineering Inc. on similar federal contracts, particularly those involving environmental impact statements for large infrastructure projects?
A review of Potomac-Hudson Engineering Inc.'s contract history would be necessary to fully assess their track record. Specifically, examining past performance on environmental impact statements (EIS) for projects of similar scale and complexity, such as rail alignments or energy infrastructure, would provide valuable insight. Data on their on-time delivery rates, budget adherence, and client satisfaction on previous federal contracts would help determine their suitability and reliability for this significant undertaking. Without access to detailed performance reviews or past project outcomes, it is difficult to definitively gauge their expertise and past success in this specific domain.
How does the $13.4 million award compare to the typical cost of similar environmental impact statements for major infrastructure projects?
The $13.4 million award for an environmental impact statement (EIS) for a rail alignment project requires comparison with industry benchmarks. The cost of an EIS can vary significantly based on project complexity, geographic location, environmental sensitivity, and the scope of analysis required (e.g., number of alternatives, depth of impact assessment). For large-scale infrastructure projects, multi-million dollar budgets for EIS are not uncommon. However, without specific data on comparable projects in Nevada or similar regions, or details on the specific requirements of this particular rail alignment, it is challenging to definitively state whether this award represents excellent, fair, or questionable value. Factors like the number of bidders and the final negotiated price relative to initial estimates would also inform this assessment.
What are the primary risks associated with the 'Cost Plus Incentive Fee' (CPIF) contract type used for this award, and how are they mitigated?
The primary risk with a Cost Plus Incentive Fee (CPIF) contract is the potential for cost overruns if the contractor does not achieve the targeted cost savings or performance metrics. The government agrees to pay the actual costs incurred plus an additional fee that is adjusted based on performance against pre-determined targets. This structure can incentivize efficiency but also means the final cost is not fixed. Mitigation strategies employed by the Department of Energy would include rigorous cost tracking, clear definition of performance metrics, regular audits, and strong project management oversight to ensure the contractor is working towards the shared goals and controlling expenses. The incentive fee structure itself is designed to align contractor and government interests, but its effectiveness depends heavily on the clarity and attainability of the targets.
What is the expected effectiveness of the environmental impact statement in ensuring regulatory compliance and informing decision-making for the rail alignment project?
The effectiveness of the environmental impact statement (EIS) hinges on its thoroughness, accuracy, and adherence to the National Environmental Policy Act (NEPA) guidelines. A well-executed EIS should comprehensively identify potential environmental impacts (positive and negative) of the proposed rail alignment and its alternatives, propose mitigation measures, and provide a robust basis for informed decision-making by the Department of Energy and other stakeholders. The success of this particular EIS will depend on the contractor's expertise, the quality of the data collected, the rigor of the analysis, and the clarity of the final documentation. If completed to high standards, it will be instrumental in meeting regulatory requirements and facilitating a sustainable project outcome.
How has federal spending on environmental consulting services, particularly for infrastructure projects, trended in recent years?
Federal spending on environmental consulting services, especially for infrastructure projects, has generally seen an upward trend, driven by increased federal investment in infrastructure, renewable energy, and the ongoing need for regulatory compliance under acts like NEPA. Agencies such as the Department of Energy, Department of Transportation, and the Environmental Protection Agency are significant sources of such contracts. Factors influencing this trend include evolving environmental regulations, a greater focus on climate change impacts, and the sheer volume of planned infrastructure upgrades. Analyzing historical spending data across various agencies and contract types would reveal specific growth patterns and areas of increased demand within the environmental consulting sector.
Competition & Pricing
Extent Competed: COMPETITIVE DELIVERY ORDER
Solicitation Procedures: ALTERNATIVE SOURCES
Solicitation ID: DE-RP28-05RW12351
Offers Received: 2
Pricing Type: COST PLUS INCENTIVE (V)
Evaluated Preference: NONE
Contractor Details
Address: 4833 RUGBY AVE STE 100, BETHESDA, MD, 08
Business Categories: Category Business, Small Business
Financial Breakdown
Contract Ceiling: $15,547,673
Exercised Options: $15,547,673
Current Obligation: $13,360,000
Parent Contract
Parent Award PIID: DEAM0403AL67465
IDV Type: IDC
Timeline
Start Date: 2005-09-22
Current End Date: 2008-09-30
Potential End Date: 2008-09-30 00:00:00
Last Modified: 2010-03-24
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