DoD's $99.4M Hurricane Florence Recovery Contract Awarded to Environmental Chemical Corporation

Contract Overview

Contract Amount: $99,439,397 ($99.4M)

Contractor: Environmental Chemical Corporation

Awarding Agency: Department of Defense

Start Date: 2018-09-11

End Date: 2022-06-27

Contract Duration: 1,385 days

Daily Burn Rate: $71.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: IGF::OT::IGF X013 HURRICANE FLORENCE RECOVERY AT MCI EAST IN NORTH AND SOUTH CAROLINA

Place of Performance

Location: CAMP LEJEUNE, ONSLOW County, NORTH CAROLINA, 28542

State: North Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $99.4 million to ENVIRONMENTAL CHEMICAL CORPORATION for work described as: IGF::OT::IGF X013 HURRICANE FLORENCE RECOVERY AT MCI EAST IN NORTH AND SOUTH CAROLINA Key points: 1. Contract awarded for post-hurricane recovery efforts, indicating a critical need for environmental remediation and construction services. 2. The contract's duration of 1385 days suggests a long-term commitment to addressing the extensive damage caused by Hurricane Florence. 3. The firm-fixed-price structure aims to control costs, but the total value necessitates careful monitoring of performance and scope. 4. Competition dynamics are crucial for ensuring value, especially in disaster recovery scenarios where urgency can sometimes impact pricing. 5. Performance context is vital; success hinges on the contractor's ability to deliver timely and effective environmental cleanup and reconstruction. 6. Sector positioning within 'Commercial and Institutional Building Construction' highlights the scale of infrastructure impacted by the natural disaster.

Value Assessment

Rating: fair

The contract value of $99.4 million for disaster recovery services is substantial. Benchmarking this against similar large-scale environmental remediation and construction contracts post-natural disasters is challenging due to unique site-specific conditions and the unpredictable nature of recovery efforts. However, the firm-fixed-price contract type suggests an attempt to cap costs. Further analysis would require comparing the unit costs of specific services rendered (e.g., debris removal, hazardous material abatement, reconstruction) against industry averages or other government contracts for similar work, which are not detailed in the provided data.

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. With 3 bidders, this suggests a moderate level of competition for a large-scale disaster recovery contract. While three bidders is better than a sole-source award, it may not represent the most robust competition possible for such a significant contract, potentially impacting price discovery and the ultimate value achieved for taxpayers.

Taxpayer Impact: A full and open competition with multiple bidders is generally favorable for taxpayers, as it encourages competitive pricing. However, the specific number of bidders (3) warrants further investigation to ensure the government received the best possible value and that the pricing reflects true market competition for disaster recovery services.

Public Impact

Residents and businesses in North and South Carolina affected by Hurricane Florence are the primary beneficiaries, receiving support for rebuilding and environmental restoration. Services delivered include environmental cleanup, debris removal, and reconstruction of damaged commercial and institutional buildings. The geographic impact is concentrated in North and South Carolina, specifically areas designated as MCI East, which likely encompasses military installations or related facilities. Workforce implications include job creation for construction, environmental remediation, and support personnel in the affected regions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen environmental hazards or reconstruction complexities arise, despite the firm-fixed-price structure.
Risk of delays in recovery efforts if contractor performance is suboptimal or if supply chain issues impact material availability.
Ensuring adequate oversight to confirm that all environmental remediation meets regulatory standards and public health requirements.
The long contract duration could lead to scope creep if not managed tightly, increasing the overall cost beyond initial projections.

Positive Signals

The firm-fixed-price contract type provides cost certainty for the government, assuming the scope is well-defined and managed.
Awarding to a single contractor for a large recovery effort can streamline coordination and execution of complex tasks.
The full and open competition, even with three bidders, suggests an effort to leverage market capabilities for a critical national need.
The contract's focus on recovery directly addresses the urgent needs of communities impacted by a major natural disaster.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, specifically addressing post-disaster recovery. The market for disaster recovery services is specialized, involving environmental remediation, engineering, and construction expertise. The scale of this contract, nearly $100 million, places it among significant government procurements for large-scale infrastructure repair and environmental cleanup. Comparable spending benchmarks would typically be found in contracts awarded after major hurricanes or other natural disasters impacting federal facilities or critical infrastructure.

Small Business Impact

The provided data indicates that small business participation (sb: false) was not a specific set-aside requirement for this contract. There is no explicit information on subcontracting plans for small businesses. Given the large scale and specialized nature of environmental remediation and construction, it is possible that the prime contractor may engage small businesses for specific tasks, but this is not guaranteed by the contract's structure as presented.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. Accountability measures are inherent in the firm-fixed-price contract type, which obligates the contractor to deliver specified services within the agreed price. Transparency would be enhanced through regular performance reviews, progress reports, and potentially public-facing updates on recovery milestones. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Hurricane Recovery Contracts
Environmental Remediation Services
Disaster Relief and Reconstruction
Department of Defense Construction Projects
North Carolina Federal Contracts
South Carolina Federal Contracts

Risk Flags

Potential for cost overruns due to unforeseen disaster-related complexities.
Risk of performance delays impacting recovery timelines.
Need for robust oversight to ensure environmental compliance.
Scope creep management is critical for fixed-price contracts.
Adequacy of competition requires further scrutiny.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $99.4 million to ENVIRONMENTAL CHEMICAL CORPORATION. IGF::OT::IGF X013 HURRICANE FLORENCE RECOVERY AT MCI EAST IN NORTH AND SOUTH CAROLINA

Who is the contractor on this award?

The obligated recipient is ENVIRONMENTAL CHEMICAL CORPORATION.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $99.4 million.

What is the period of performance?

Start: 2018-09-11. End: 2022-06-27.

What is the track record of Environmental Chemical Corporation with the Department of Defense and in disaster recovery contracts?

A comprehensive review of Environmental Chemical Corporation's track record would involve examining their past performance on similar contracts, particularly those with the Department of Defense (DoD) and other federal agencies involved in disaster response. This includes assessing their history of meeting deadlines, staying within budget, quality of work, and any past disputes or contract terminations. Information on their experience with environmental remediation, hazardous material handling, and large-scale construction projects, especially in post-disaster scenarios, is crucial. Databases like the Federal Procurement Data System (FPDS) and contract award histories can provide insights into their past performance metrics, client feedback, and the types of projects they have successfully completed. Understanding their specific capabilities and past successes or failures in similar high-stakes recovery operations is key to evaluating their suitability for this significant contract.

How does the $99.4 million contract value compare to typical spending for Hurricane Florence recovery efforts?

Comparing the $99.4 million contract value to typical spending for Hurricane Florence recovery requires context on the scope of work and the specific entities involved. This contract is with the Department of the Navy, suggesting it may focus on military installations or related infrastructure in North and South Carolina. Hurricane Florence caused widespread damage across both states, impacting numerous federal, state, local, and private entities. Government-wide recovery spending could encompass billions of dollars across various agencies (FEMA, Army Corps of Engineers, HUD, etc.) for different types of relief and reconstruction. Therefore, this specific contract represents a portion of the overall federal response. To benchmark effectively, one would need to analyze other large contracts awarded for similar environmental remediation and construction services to federal entities or critical infrastructure in the affected regions during the same period.

What are the primary risks associated with this firm-fixed-price contract for disaster recovery?

While firm-fixed-price (FFP) contracts are designed to provide cost certainty, disaster recovery operations present unique risks. A primary risk is the potential for unforeseen conditions, such as discovering additional hazardous materials or encountering unexpected structural damage, which could lead to significant scope changes or claims for equitable adjustments, potentially increasing costs beyond the initial fixed price. Contractor performance risk is also present; if the contractor fails to execute efficiently or effectively, recovery timelines could be extended, impacting the overall mission. Furthermore, the urgency inherent in disaster response might lead to less rigorous initial assessments, increasing the likelihood of scope ambiguities that can be exploited or lead to disputes. Ensuring robust government oversight to manage scope and monitor performance is critical to mitigating these risks.

How effective is the 'full and open competition' with three bidders in ensuring value for this large-scale recovery contract?

A 'full and open competition' with three bidders represents a moderate level of competition for a contract valued at nearly $100 million, especially for specialized disaster recovery services. While it is preferable to sole-source or limited competition, the optimal number of bidders for maximizing price competition can vary. Three bidders suggest that the market has some capacity and interest, but it might not be sufficient to drive the most aggressive pricing. The government's ability to secure the best value depends heavily on the quality of the proposals received, the clarity of the solicitation requirements, and the evaluation criteria used. Further analysis would involve understanding if the solicitation was structured to attract a wider range of qualified bidders and whether the evaluation process rigorously assessed technical capabilities alongside price to ensure overall best value.

What are the potential long-term implications of this contract on the affected regions' infrastructure and environment?

This contract's long-term implications hinge on the quality and thoroughness of the environmental remediation and reconstruction performed. Effective cleanup of hazardous materials and proper rebuilding of damaged structures can accelerate the region's recovery, restore functionality to critical facilities (potentially military bases or institutional buildings), and mitigate ongoing environmental risks. Conversely, substandard work could lead to lingering environmental contamination or require future repairs, hindering long-term recovery. The contract's duration (1385 days) suggests a significant undertaking, and its successful completion should contribute positively to the resilience and environmental health of the affected areas in North and South Carolina, supporting the return to normalcy for communities and operations.

How does the PSC code (236220) and NAICS code (236220) inform our understanding of the contract's scope?

The PSC (Product and Service Code) and NAICS (North American Industry Classification System) code 236220, 'Commercial and Institutional Building Construction,' indicates that the primary focus of this contract is on the construction and repair of non-residential buildings. This includes structures like offices, schools, hospitals, government facilities, and other institutional or commercial properties. For a hurricane recovery contract, this code suggests the work involves rebuilding, repairing, or renovating damaged facilities of this nature. It implies activities such as structural repair, roofing, interior finishing, and potentially associated site work, but it does not specifically cover specialized environmental remediation unless it is directly tied to the building's reconstruction. The code helps define the boundaries of the contract's scope within the broader construction industry.

Industry Classification

NAICS: Construction › Nonresidential Building Construction › Commercial and Institutional Building Construction

Product/Service Code: MAINT, REPAIR, ALTER REAL PROPERTY › MAINT, ALTER, REPAIR BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N6247012R5010

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1240 BAYSHORE HGHWY, BURLINGAME, CA, 94010

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $99,439,397

Exercised Options: $99,439,397

Current Obligation: $99,439,397

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N6247013D6020

IDV Type: IDC

Timeline