State Department contract for wastewater treatment maintenance awarded to Veolia Water North America for over $10.7 million
Contract Overview
Contract Amount: $10,794,009 ($10.8M)
Contractor: Veolia Water North America-West LLC
Awarding Agency: Department of State
Start Date: 2006-04-01
End Date: 2010-09-30
Contract Duration: 1,643 days
Daily Burn Rate: $6.6K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: OPERATION AND MAINTENANCE OF THE SOUTH BAY INTERNATIONAL WASTEWATER TREATMENT PLANT
Place of Performance
Location: SAN YSIDRO, SAN DIEGO County, CALIFORNIA, 92173
Plain-Language Summary
Department of State obligated $10.8 million to VEOLIA WATER NORTH AMERICA-WEST LLC for work described as: OPERATION AND MAINTENANCE OF THE SOUTH BAY INTERNATIONAL WASTEWATER TREATMENT PLANT Key points: 1. The contract value appears reasonable given the duration and scope of services. 2. Full and open competition was utilized, suggesting a competitive bidding process. 3. The contract duration of over four years indicates a need for sustained service. 4. The service falls under industrial machinery repair and maintenance. 5. The contract was awarded by the International Boundary and Water Commission. 6. The contractor has experience in water treatment operations.
Value Assessment
Rating: good
The contract value of approximately $10.79 million over roughly 4.5 years for wastewater treatment plant operation and maintenance is within a reasonable range for such specialized services. Benchmarking against similar large-scale municipal or industrial wastewater treatment contracts would provide a more precise value-for-money assessment. However, the fixed-price nature of the contract suggests that the government has a clear understanding of the costs involved, potentially leading to better cost control.
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 bids. With two bids received, the competition level suggests a moderate level of interest from potential contractors. This level of competition is generally favorable for price discovery, as it incentivizes bidders to offer competitive pricing to secure the contract.
Taxpayer Impact: A competitive bidding process helps ensure that taxpayer dollars are used efficiently by driving down costs through market forces.
Public Impact
The primary beneficiary is the International Boundary and Water Commission, ensuring the proper functioning of the South Bay International Wastewater Treatment Plant. The service delivered is the operation and maintenance of critical wastewater treatment infrastructure. The geographic impact is localized to the San Diego, California region, specifically serving the border area. The contract supports specialized jobs in industrial machinery repair and maintenance within the environmental services sector.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns if unforeseen maintenance issues arise that are not fully captured by the fixed-price structure.
- Dependence on a single contractor for a critical piece of environmental infrastructure.
Positive Signals
- Awarded through full and open competition, indicating a fair and transparent process.
- Fixed-price contract type helps to control costs and provides budget certainty.
- Contractor has a track record in operating and maintaining similar facilities.
Sector Analysis
This contract falls within the Industrial Machinery and Equipment Repair and Maintenance sector, specifically focusing on environmental infrastructure. The market for operating and maintaining large-scale wastewater treatment plants is specialized, often involving a limited number of experienced providers. Spending in this area is crucial for public health and environmental protection, with government contracts forming a significant portion of the demand.
Small Business Impact
The data indicates that this contract was not set aside for small businesses, and there is no explicit information regarding subcontracting plans for small businesses. Given the specialized nature and scale of operating a large wastewater treatment plant, it is less likely to be broken down into smaller subcontracts that would significantly benefit the small business ecosystem, unless specific provisions were made.
Oversight & Accountability
The contract is subject to oversight by the Department of State and the International Boundary and Water Commission. As a fixed-price contract, financial oversight would focus on ensuring adherence to the agreed-upon price and scope of work. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.
Related Government Programs
- Environmental Protection Agency (EPA) wastewater treatment grants and contracts
- Army Corps of Engineers civil works and infrastructure projects
- Department of Interior water resource management contracts
Risk Flags
- Contract duration exceeds 4 years
- Limited number of bids received (2)
Tags
other, department-of-state, international-boundary-and-water-commission, california, firm-fixed-price, full-and-open-competition, machinery-repair-and-maintenance, wastewater-treatment, operation-and-maintenance, large-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of State awarded $10.8 million to VEOLIA WATER NORTH AMERICA-WEST LLC. OPERATION AND MAINTENANCE OF THE SOUTH BAY INTERNATIONAL WASTEWATER TREATMENT PLANT
Who is the contractor on this award?
The obligated recipient is VEOLIA WATER NORTH AMERICA-WEST LLC.
Which agency awarded this contract?
Awarding agency: Department of State (International Boundary and Water Commission: U.S.-Mexico).
What is the total obligated amount?
The obligated amount is $10.8 million.
What is the period of performance?
Start: 2006-04-01. End: 2010-09-30.
What is the historical spending pattern for the operation and maintenance of the South Bay International Wastewater Treatment Plant?
The provided data covers a single contract awarded on April 1, 2006, with an end date of September 30, 2010, totaling $10,794,009. This represents a period of approximately 4.5 years. Without access to historical contract databases or agency budget documents, it is difficult to ascertain the complete historical spending pattern for this specific plant. However, this contract suggests an average annual expenditure of roughly $2.4 million for its operation and maintenance during the contract period. Future spending would depend on contract renewals, competition, and potential changes in operational requirements or plant upgrades.
How does the contractor's performance on this contract compare to industry benchmarks for wastewater treatment plant maintenance?
The provided data does not include specific performance metrics or quality ratings for Veolia Water North America-West LLC on this contract. To assess performance against industry benchmarks, one would need access to contract performance reports, customer satisfaction surveys, and potentially data on plant uptime, efficiency, and compliance with environmental regulations. Industry benchmarks typically focus on key performance indicators (KPIs) such as response times for emergency repairs, adherence to preventative maintenance schedules, water quality compliance rates, and overall operational efficiency. Without such detailed performance data, a direct comparison is not feasible based solely on the contract award information.
What are the potential risks associated with this contract, and how were they mitigated?
Potential risks for this contract include unforeseen operational issues requiring extensive repairs beyond the scope of routine maintenance, contractor performance failures leading to service disruptions, and potential cost increases if the fixed-price contract does not adequately account for all variables. Mitigation strategies likely involved a thorough technical evaluation during the solicitation process, clear definition of contract scope and deliverables, and the requirement for performance bonds. The fixed-price nature itself acts as a risk mitigation tool for the government by capping costs. The competitive bidding process also helps select a contractor with a demonstrated capability to manage such risks.
What is the total value of similar contracts awarded by the Department of State for infrastructure maintenance in the last five years?
Determining the total value of similar contracts awarded by the Department of State for infrastructure maintenance requires access to a comprehensive federal procurement database (like FPDS or USASpending.gov) and the ability to filter by agency, contract type, and service category (e.g., facilities maintenance, operations, repair). The provided data is specific to one contract for wastewater treatment. To answer this question accurately, one would need to query these databases for contracts categorized under facility operations and maintenance, infrastructure repair, or similar terms, awarded by the Department of State within the specified timeframe. This would likely involve a significant sum, given the global footprint and diverse infrastructure needs of the State Department.
What is the typical profit margin for companies providing wastewater treatment plant operation and maintenance services?
Typical profit margins for companies providing wastewater treatment plant operation and maintenance services can vary significantly based on factors such as contract size, duration, complexity, geographic location, and the level of competition. Generally, for specialized industrial services like this, profit margins might range from 5% to 15% of the contract value. However, this is a broad estimate. Fixed-price contracts, like the one awarded to Veolia Water North America-West LLC, aim to provide a predictable revenue stream but also place the risk of cost overruns on the contractor. The actual profit realized would depend on the contractor's efficiency in managing labor, materials, and overhead costs throughout the contract period.
Industry Classification
NAICS: Other Services (except Public Administration) › Commercial and Industrial Machinery and Equipment (except Automotive and Electronic) Repair and Maintenance › Commercial and Industrial Machinery and Equipment (except Automotive and Electronic) Repair and Maintenance
Product/Service Code: OPERATION OF GOVT OWNED FACILITY › OPERATION OF SHIPS, SMALL CRAFTS, PONTOONS AND FLOATING DOCKS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 2
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 2300 CONTRA COSTA BLVD STE 350, PLEASANT HILL, CA, 10
Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $28,805,620
Exercised Options: $17,898,157
Current Obligation: $10,794,009
Contract Characteristics
Multi-Year Contract: Yes
Timeline
Start Date: 2006-04-01
Current End Date: 2010-09-30
Potential End Date: 2010-09-30 00:00:00
Last Modified: 2010-05-13
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