DoD's $23M Hangar 1 Demolition Contract Awarded to ECC Environmental LLC for Post-Fire Cleanup

Contract Overview

Contract Amount: $23,028,129 ($23.0M)

Contractor: ECC Environmental LLC

Awarding Agency: Department of Defense

Start Date: 2023-12-19

End Date: 2026-06-19

Contract Duration: 913 days

Daily Burn Rate: $25.2K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: COST PLUS AWARD FEE

Sector: Construction

Official Description: X001 HANGAR 1 POST-FIRE DEMOLITION AND DEBRIS REMOVAL/DISPOSAL

Place of Performance

Location: TUSTIN, ORANGE County, CALIFORNIA, 92780

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $23.0 million to ECC ENVIRONMENTAL LLC for work described as: X001 HANGAR 1 POST-FIRE DEMOLITION AND DEBRIS REMOVAL/DISPOSAL Key points: 1. Contract awarded for demolition and debris removal following a hangar fire. 2. The contract is a Delivery Order under a larger IDIQ, indicating a specific task order. 3. The contract type is Cost Plus Award Fee, which can incentivize performance but requires careful oversight. 4. The duration of the contract is substantial, spanning over 900 days, suggesting a complex scope of work. 5. The geographic location is California, a region with potentially higher labor and disposal costs. 6. The North American Industry Classification System (NAICS) code 562910 points to Remediation Services, a specialized field.

Value Assessment

Rating: fair

Benchmarking the value of this specific demolition and debris removal contract is challenging without detailed cost breakdowns and comparisons to similar post-fire remediation projects. The Cost Plus Award Fee (CPAF) structure means the final cost is dependent on performance, making direct price comparisons difficult. However, the duration and scope suggest a significant undertaking. Further analysis would require access to the contractor's proposed costs and the government's cost estimates to assess if the pricing is reasonable for the services rendered.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES.' This suggests that while the initial solicitation may have been open, specific sources were later excluded, or the competition was limited to a pre-qualified pool. With only two bidders, the level of competition is relatively low, which could potentially impact price discovery and lead to higher costs for the government compared to a broader competition with more participants.

Taxpayer Impact: A limited competition with only two bidders may result in taxpayers paying a premium for the services, as the contractor faces less pressure to offer the most competitive pricing.

Public Impact

The primary beneficiaries are the Department of Defense and the Navy, who will have the Hangar 1 site remediated. The services delivered include the safe demolition, removal, and disposal of debris from a fire-damaged hangar. The geographic impact is localized to the specific military installation in California where Hangar 1 is located. Workforce implications may include the employment of specialized demolition and environmental remediation personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may lead to higher costs for taxpayers.
Cost Plus Award Fee contracts require robust oversight to ensure cost control and prevent overruns.
The exclusion of sources in the competition process warrants further investigation into the rationale.

Positive Signals

Contract awarded to a single entity for specialized remediation services.
The contract addresses a critical post-incident need for facility repair.
The duration indicates a comprehensive approach to the remediation task.

Sector Analysis

The remediation services sector is a critical component of the construction and environmental services industry. This contract falls within the specialized niche of post-disaster cleanup and demolition. The market for such services can be influenced by regulatory requirements, environmental concerns, and the frequency of industrial accidents or natural disasters. Comparable spending benchmarks would typically be found within government contracts for hazardous material removal, demolition, and site cleanup.

Small Business Impact

There is no indication that this contract included a small business set-aside. Given the specialized nature of demolition and post-fire remediation, it is possible that larger, more experienced firms are better positioned to compete. Subcontracting opportunities for small businesses may exist, particularly in areas like debris hauling or specialized disposal, but this would depend on the prime contractor's strategy.

Oversight & Accountability

Oversight for this Cost Plus Award Fee contract would likely involve regular reviews of the contractor's costs, performance metrics, and adherence to safety and environmental regulations. The Department of the Navy's contracting officers and potentially an Inspector General's office would be responsible for ensuring accountability and transparency. The CPAF structure necessitates detailed performance evaluations to justify any award fees.

Related Government Programs

Department of Defense Facilities Maintenance
Environmental Remediation Services
Post-Disaster Recovery Contracts
Naval Facilities Engineering Command Contracts

Risk Flags

Limited competition may result in higher costs.
Cost Plus Award Fee structure requires diligent oversight.
Rationale for exclusion of sources needs clarification.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $23.0 million to ECC ENVIRONMENTAL LLC. X001 HANGAR 1 POST-FIRE DEMOLITION AND DEBRIS REMOVAL/DISPOSAL

Who is the contractor on this award?

The obligated recipient is ECC ENVIRONMENTAL LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $23.0 million.

What is the period of performance?

Start: 2023-12-19. End: 2026-06-19.

What is the historical track record of ECC Environmental LLC with the Department of Defense, particularly on similar remediation projects?

A review of ECC Environmental LLC's contract history with the Department of Defense would be necessary to assess their track record. This would involve examining past performance evaluations, any instances of contract disputes or penalties, and their experience with projects of similar scope and complexity, such as post-fire demolition and hazardous material disposal. Understanding their past performance on cost-plus contracts would also be crucial in evaluating their suitability for this award. Data on their success in meeting deadlines, staying within budget (where applicable), and adhering to safety and environmental standards would provide valuable context for this current contract.

How does the estimated cost of this contract compare to similar post-fire demolition and debris removal contracts awarded by the government?

To benchmark the value, one would need to compare the estimated cost of this $23 million contract against similar post-fire demolition and debris removal contracts awarded by federal agencies. Key comparison points would include the size and type of facility demolished, the extent of fire damage, the volume and nature of debris (including any hazardous materials), the geographic location (as labor and disposal costs vary significantly), and the contract duration. Access to historical contract data, such as that provided by the Federal Procurement Data System (FPDS) or other government spending databases, would be essential for identifying comparable projects and analyzing their cost per square foot or per ton of debris removed.

What are the specific risk indicators associated with a Cost Plus Award Fee (CPAF) contract for demolition services?

The primary risk indicator for a CPAF contract in demolition services is the potential for cost overruns if the award fee criteria are not tightly defined or if the contractor's cost management is weak. Unlike fixed-price contracts, CPAF allows costs to fluctuate based on performance, necessitating robust government oversight to ensure that costs are reasonable and allocable. There's also a risk that the contractor might prioritize achieving award fee targets over cost efficiency. For demolition, specific risks include unforeseen site conditions, hazardous material discovery, and environmental compliance issues, all of which can impact costs and schedule, and thus the award fee.

What is the expected effectiveness of ECC Environmental LLC in completing the Hangar 1 remediation within the specified timeframe and budget?

The effectiveness of ECC Environmental LLC in completing the Hangar 1 remediation hinges on several factors, including their demonstrated project management capabilities, the adequacy of their technical approach, and the clarity of the performance standards tied to the award fee. The contract's duration of 913 days suggests a complex scope, and the government's oversight will be critical in monitoring progress against milestones. Past performance data from the contractor, along with the government's established metrics for success (which would be detailed in the contract's Performance Work Statement), will be key indicators of expected effectiveness. The limited competition also raises questions about the pressure on the contractor to perform efficiently.

How has federal spending on environmental remediation and demolition services trended in recent years, and how does this contract fit into that pattern?

Federal spending on environmental remediation and demolition services has generally remained consistent, often driven by infrastructure needs, base realignments, and responses to natural disasters or accidents at federal facilities. Spending in this sector can fluctuate based on specific agency priorities and available appropriations. This $23 million contract for Hangar 1 demolition fits within the typical pattern of spending by the Department of Defense for facility repair and maintenance, particularly after incidents that render infrastructure unusable. It represents a significant, albeit specific, investment in restoring critical assets, aligning with the government's ongoing commitment to maintaining its operational infrastructure.

What are the implications of the 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' clause for taxpayer value?

The 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' clause suggests that while the initial solicitation aimed for broad competition, certain potential bidders were subsequently excluded. This exclusion, if not based on objective and justifiable criteria (e.g., lack of capability, past performance issues), could limit the pool of qualified offerors. A smaller competitive pool, especially if it reduces the number of bidders to just two as indicated, generally leads to less robust price competition. Consequently, taxpayers may face higher costs than they would in a truly open and unrestricted competition where multiple firms vie for the contract, potentially resulting in a less favorable price for the services rendered.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Remediation and Other Waste Management Services › Remediation Services

Product/Service Code: NATURAL RESOURCES MANAGEMENT › ENVIRONMENTAL SYSTEMS PROTECTION

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N6247318R2418

Offers Received: 2

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Address: 1240 BAYSHORE HWY STE 317, BURLINGAME, CA, 94010

Business Categories: Category Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $23,028,129

Exercised Options: $23,028,129

Current Obligation: $23,028,129

Actual Outlays: $287,079

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N6247322D2211

IDV Type: IDC

Timeline