DoD's $500M Hurricane Florence Recovery Contract Awarded to Environmental Chemical Corp

Contract Overview

Contract Amount: $500,074,965 ($500.1M)

Contractor: Environmental Chemical Corporation

Awarding Agency: Department of Defense

Start Date: 2018-12-31

End Date: 2023-09-15

Contract Duration: 1,719 days

Daily Burn Rate: $290.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: IGF::OT::IGF X014 HURRICANE FLORENCE RECOVERY AT MCB CAMP LEJEUNE

Place of Performance

Location: CAMP LEJEUNE, ONSLOW County, NORTH CAROLINA, 28547

State: North Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $500.1 million to ENVIRONMENTAL CHEMICAL CORPORATION for work described as: IGF::OT::IGF X014 HURRICANE FLORENCE RECOVERY AT MCB CAMP LEJEUNE Key points: 1. Contract awarded for post-hurricane recovery efforts, indicating a significant need for environmental remediation and construction services. 2. The large contract value suggests a complex and extensive scope of work, likely involving multiple phases and specialized expertise. 3. The award to a single contractor for such a substantial amount warrants scrutiny regarding potential risks and the effectiveness of competition. 4. Performance context is critical, as the success of this contract directly impacts military base recovery and operational readiness. 5. Positioned within the Defense sector, this contract highlights the government's reliance on private entities for critical infrastructure repair and environmental management.

Value Assessment

Rating: fair

Benchmarking the value of this $500M contract is challenging without specific deliverables and comparable projects. However, the scale suggests a significant investment in recovery. The firm fixed-price contract type offers cost certainty to the government, but the ultimate value depends on the contractor's efficiency and the actual scope of work completed. Further analysis would require detailed breakdowns of services rendered and comparison to industry standards for similar large-scale environmental and construction recovery efforts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting that multiple bidders were likely considered. With 3 bids received, the level of competition appears moderate for a contract of this magnitude. While full and open competition is generally preferred, a low number of bids can sometimes indicate market limitations or high barriers to entry for potential contractors. The government's ability to secure competitive pricing is influenced by the number and capability of the bidders.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it generally drives down prices through market forces. A moderate number of bids suggests a reasonable effort to obtain competitive pricing, though a higher number of bidders could potentially yield even better value.

Public Impact

The primary beneficiaries are the Department of Defense and the personnel stationed at MCB Camp Lejeune, who will see improved infrastructure and environmental conditions. Services delivered include environmental remediation, debris removal, and construction/repair of damaged facilities following Hurricane Florence. The geographic impact is concentrated at MCB Camp Lejeune in North Carolina, a critical military installation. Workforce implications include potential job creation for construction workers, environmental specialists, and support staff, both directly and indirectly through subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if the scope of work expands beyond initial estimates.
Risk of delays in recovery efforts if the contractor faces performance issues or unforeseen site conditions.
Dependence on a single contractor for a critical recovery mission could pose a risk if their capacity or resources are strained.
Ensuring environmental compliance and safety standards are met throughout the extensive remediation and construction process.

Positive Signals

Awarded under full and open competition, indicating a structured procurement process.
Firm fixed-price contract type provides cost certainty for the government.
The contract duration of over 1700 days suggests a comprehensive and phased approach to recovery.
The contractor, Environmental Chemical Corporation, likely possesses specialized expertise in environmental services.

Sector Analysis

This contract falls within the broader construction and environmental services sector, which is crucial for government infrastructure projects, particularly those involving disaster recovery. The market for large-scale environmental remediation and construction is competitive, with specialized firms capable of handling complex projects. The size of this contract, exceeding $500 million, places it among significant government procurements in this sector, reflecting the substantial costs associated with major disaster response and rebuilding efforts.

Small Business Impact

The data indicates that small business participation was not a primary focus, as the contract was not set aside for small businesses and the prime contractor is not a small business. However, the large scale of the contract presents opportunities for subcontracting. It is crucial to assess whether the prime contractor has robust subcontracting plans that include small businesses to ensure they benefit from this significant federal spending and contribute to the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. The Inspector General for the Department of Defense would likely have jurisdiction for audits and investigations into potential fraud, waste, or abuse. Transparency would be enhanced through regular reporting on progress, expenditures, and any challenges encountered during the recovery and reconstruction phases.

Related Government Programs

Hurricane Recovery Contracts
Environmental Remediation Services
Military Base Construction and Repair
Department of Defense Infrastructure Projects
Disaster Relief and Resilience Funding

Risk Flags

Potential for cost overruns due to the large scale and complexity of recovery efforts.
Risk of performance delays impacting base restoration timelines.
Need for stringent oversight to ensure quality and compliance in environmental remediation.
Moderate competition level (3 bids) warrants monitoring for price reasonableness.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $500.1 million to ENVIRONMENTAL CHEMICAL CORPORATION. IGF::OT::IGF X014 HURRICANE FLORENCE RECOVERY AT MCB CAMP LEJEUNE

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 $500.1 million.

What is the period of performance?

Start: 2018-12-31. End: 2023-09-15.

What is the track record of Environmental Chemical Corporation in handling large-scale disaster recovery contracts for the Department of Defense?

Assessing the track record of Environmental Chemical Corporation (ECC) is crucial for understanding their capability to manage a contract of this magnitude. While specific details on ECC's past performance on similar large-scale DoD disaster recovery projects are not provided in the summary data, a thorough review would involve examining their contract history, past performance evaluations (e.g., CPARS reports), and any documented successes or failures on comparable projects. This includes evaluating their experience with environmental remediation, construction, and project management under challenging conditions. Understanding their financial stability and capacity to mobilize resources for a project valued at $500 million is also a key component of assessing their track record.

How does the awarded amount of $500 million compare to the estimated costs for similar hurricane recovery efforts at other military installations?

Directly comparing the $500 million award to similar hurricane recovery efforts requires detailed cost breakdowns and scope definitions, which are not available in the provided data. However, the scale of this contract suggests a significant level of damage and a comprehensive recovery plan at MCB Camp Lejeune. Generally, large-scale disaster recovery for military installations can range from tens of millions to billions of dollars, depending on the severity of the event, the size and complexity of the installation, and the scope of repairs and environmental remediation required. Factors such as the age of infrastructure, specific environmental hazards present, and the urgency of restoring operational capabilities all influence the final cost. This $500 million figure appears substantial, indicating a major recovery operation.

What are the primary risk indicators associated with a single contractor managing such a large environmental recovery contract?

A primary risk indicator for a single contractor managing a $500 million environmental recovery contract is the potential for a lack of robust competition driving up costs or reducing innovation. If the contractor underperforms, the government has limited immediate alternatives, potentially leading to significant delays in critical recovery efforts. There's also a risk of 'vendor lock-in,' where the government becomes overly dependent on the incumbent's expertise and processes. Furthermore, the sheer scale increases the complexity of oversight, making it harder to monitor all aspects of performance, cost, and compliance effectively. Ensuring adequate bonding and insurance from the contractor is also paramount to mitigate financial risks.

What measures are in place to ensure the effectiveness and efficiency of the services delivered under this contract?

Effectiveness and efficiency are typically ensured through a robust contract management framework. For this contract, measures would likely include detailed performance work statements (PWS), key performance indicators (KPIs), and regular progress reviews. The firm fixed-price nature of the contract incentivizes the contractor to be efficient to maximize profit. The Department of the Navy would assign a Contracting Officer's Representative (COR) responsible for day-to-day oversight, monitoring progress, ensuring quality control, and verifying that deliverables meet requirements. Periodic inspections, milestone payments tied to completion of specific tasks, and potential penalties for non-performance would also contribute to ensuring effectiveness and efficiency.

How has historical spending on hurricane recovery and environmental services at MCB Camp Lejeune trended over the past decade?

Analyzing historical spending trends on hurricane recovery and environmental services at MCB Camp Lejeune over the past decade would provide valuable context for this $500 million award. Without specific historical data, it's difficult to establish a trend. However, given its coastal location in North Carolina, the base is susceptible to hurricanes. Spending would likely be episodic, spiking significantly after major storm events like Florence. Pre-Florence spending might have focused on routine environmental maintenance and smaller infrastructure repairs. A decade-long view could reveal patterns of recurring damage, the effectiveness of previous mitigation efforts, and the increasing costs associated with climate change impacts and aging infrastructure, potentially justifying the scale of the current award.

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: $500,074,965

Exercised Options: $500,074,965

Current Obligation: $500,074,965

Actual Outlays: $193,729,563

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