NASA's $24.8M engineering services contract to CH2M HILL INC shows a high per-unit cost
Contract Overview
Contract Amount: $24,817,018 ($24.8M)
Contractor: CH2M Hill Inc
Awarding Agency: National Aeronautics and Space Administration
Start Date: 2005-12-01
End Date: 2013-11-14
Contract Duration: 2,905 days
Daily Burn Rate: $8.5K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: ENGINEERING SERVICES FOR MSFC, OTHER NASA CENTERS OR INSTALLATIONS AND OTHER GOVRNMENT FACILITIES.
Place of Performance
Location: HUNTSVILLE, MADISON County, ALABAMA, 35812
State: Alabama Government Spending
Plain-Language Summary
National Aeronautics and Space Administration obligated $24.8 million to CH2M HILL INC for work described as: ENGINEERING SERVICES FOR MSFC, OTHER NASA CENTERS OR INSTALLATIONS AND OTHER GOVRNMENT FACILITIES. Key points: 1. The contract's value of $24.8 million over its duration suggests a significant investment in engineering support. 2. Competition was full and open, indicating a broad market search for this service. 3. The firm fixed-price contract type aims to control costs by setting a predetermined price. 4. Performance spanned nearly 8 years, suggesting a long-term need for these engineering services. 5. The contract was awarded by NASA, a key agency for complex engineering projects. 6. The primary location of performance was Alabama, indicating a regional focus for these services.
Value Assessment
Rating: fair
The total award of $24.8 million for engineering services over approximately 8 years appears substantial. Benchmarking against similar large-scale engineering support contracts for NASA or other federal agencies would be necessary for a precise value-for-money assessment. The firm fixed-price structure suggests an attempt to manage cost overruns, but the ultimate value depends on the quality and efficiency of the services delivered. Without specific deliverables or performance metrics, it's challenging to definitively assess if the price reflects optimal value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit offers. This approach typically fosters a competitive environment, encouraging multiple bidders to vie for the contract. The presence of multiple bidders generally leads to better price discovery and potentially more favorable terms for the government. The specific number of bidders is not provided, which limits a deeper analysis of the competitive intensity.
Taxpayer Impact: Full and open competition is generally beneficial for taxpayers as it increases the likelihood of securing services at competitive prices, preventing potential overcharges that could arise from less competitive procurement methods.
Public Impact
The primary beneficiaries are NASA and potentially other government facilities requiring specialized engineering support. Services delivered include engineering expertise crucial for the design, development, and maintenance of complex systems and infrastructure. The geographic impact is centered in Alabama, where the primary performance occurred, potentially supporting the local economy and workforce. Workforce implications include the employment of engineers and technical staff by CH2M HILL INC to fulfill the contract requirements.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of specific performance metrics makes it difficult to assess the true value for money.
- The long duration of the contract could lead to scope creep or evolving requirements not fully captured in the initial pricing.
- Dependence on a single large contractor for critical engineering services might pose a risk if performance falters.
Positive Signals
- Awarded under full and open competition, suggesting a robust market search.
- Firm fixed-price contract type provides cost certainty for the government.
- Long contract duration indicates a sustained need and potential for building specialized expertise within the contractor.
Sector Analysis
This contract falls within the Engineering Services sector, a critical component of the broader professional, scientific, and technical services industry. This sector supports government agencies in areas ranging from infrastructure development to advanced research and development. The market for such services is competitive, with numerous firms offering specialized expertise. NASA, as a major consumer of engineering services, often awards large, long-term contracts to support its complex missions, making this contract comparable to other significant federal engineering procurements.
Small Business Impact
The data indicates that this contract was not set aside for small businesses, nor does it explicitly mention subcontracting goals for small businesses. This suggests that the primary award went to a large business, CH2M HILL INC. The absence of small business set-aside provisions means that opportunities for small businesses to directly participate in this specific contract may be limited, although they could potentially be involved as subcontractors if CH2M HILL INC opts to engage them.
Oversight & Accountability
Oversight for this contract would typically be managed by the National Aeronautics and Space Administration (NASA) contracting officers and program managers. Accountability measures are inherent in the firm fixed-price structure, which obligates the contractor to deliver specified services at the agreed-upon price. Transparency is generally facilitated through contract award databases, though detailed performance reports may not always be publicly accessible. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.
Related Government Programs
- NASA Engineering Services Contracts
- Federal Engineering and Architectural Services
- Professional, Scientific, and Technical Services Contracts
- Large-Scale Government Infrastructure Support
Risk Flags
- Long contract duration may increase risk of cost escalation or scope creep if not managed tightly.
- Lack of detailed performance data makes value-for-money assessment difficult.
- Potential for contractor to underperform if initial pricing was too aggressive.
Tags
engineering-services, nasa, alabama, firm-fixed-price, large-contract, full-and-open-competition, professional-scientific-and-technical-services, aerospace, government-facilities, long-term-contract
Frequently Asked Questions
What is this federal contract paying for?
National Aeronautics and Space Administration awarded $24.8 million to CH2M HILL INC. ENGINEERING SERVICES FOR MSFC, OTHER NASA CENTERS OR INSTALLATIONS AND OTHER GOVRNMENT FACILITIES.
Who is the contractor on this award?
The obligated recipient is CH2M HILL INC.
Which agency awarded this contract?
Awarding agency: National Aeronautics and Space Administration (National Aeronautics and Space Administration).
What is the total obligated amount?
The obligated amount is $24.8 million.
What is the period of performance?
Start: 2005-12-01. End: 2013-11-14.
What was the specific nature of the engineering services provided under this contract?
The contract data indicates 'ENGINEERING SERVICES FOR MSFC, OTHER NASA CENTERS OR INSTALLATIONS AND OTHER GOVRNMENT FACILITIES.' While the broad category is engineering services, the specific tasks likely encompassed a range of activities such as design, analysis, testing, systems engineering, and technical support for NASA's facilities and potentially its space exploration programs. Without more granular data on task orders or statements of work, the precise technical scope remains generalized. These services are crucial for maintaining and advancing NASA's complex infrastructure and mission objectives.
How does the total contract value of $24.8 million compare to similar engineering services contracts awarded by NASA?
The $24.8 million total award for nearly 8 years of engineering services represents a significant investment. To benchmark this effectively, one would need to compare it against other large, indefinite-delivery/indefinite-quantity (IDIQ) or fixed-price contracts for similar engineering support services awarded by NASA or other agencies like the Department of Defense. Contracts for major aerospace engineering support can range from tens to hundreds of millions of dollars, depending on the scope, duration, and complexity. This contract appears to be a substantial, but not exceptionally outlier, award within the context of large federal engineering procurements.
What are the potential risks associated with a firm fixed-price contract of this magnitude and duration?
A firm fixed-price (FFP) contract aims to provide cost certainty. However, for a long-duration contract like this (nearly 8 years), risks can emerge. If the initial cost estimates were inaccurate or if unforeseen technical challenges arose, the contractor might face financial strain, potentially impacting performance or quality. Conversely, if the contractor is highly efficient and the initial estimates were generous, they could realize significant profit. The government bears the risk of inadequate performance if the contractor prioritizes profit over quality due to the fixed price. Robust oversight and clear performance standards are crucial to mitigate these risks.
What does the 'full and open competition' designation imply for the contractor selection process and potential outcomes?
The 'full and open competition' designation signifies that NASA solicited proposals from all responsible sources capable of meeting the contract requirements. This process is designed to maximize competition, theoretically leading to the best value for the government in terms of price, technical approach, and overall performance. It implies that multiple companies likely had the opportunity to bid, and the selection was based on a comparative evaluation of these proposals. This method is generally preferred for ensuring fairness and achieving competitive pricing, although the specific number of bidders and the evaluation criteria would provide further insight into the actual competitive landscape.
How has NASA's spending on engineering services evolved over time, and where does this contract fit?
NASA's spending on engineering services has historically been substantial, reflecting the agency's mission-critical needs for design, development, and operational support. Annual spending fluctuates based on program cycles, new initiatives, and budget allocations. This $24.8 million contract, awarded in late 2005 and ending in late 2013, represents a significant but specific investment during that period. Analyzing historical spending patterns would involve examining aggregate data for engineering services across NASA's various centers and programs to understand trends, identify major contract vehicles, and assess the proportion of the budget allocated to such support.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: ARCHITECT/ENGINEER SERVICES › ARCH-ENG SVCS - CONSTRUCTION
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: ARCHITECT-ENGINEER FAR 6.102
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: CH2M Hill Companies, Ltd. (UEI: 027620574)
Address: 2567 FAIRLANE DRIVE, MONTGOMERY, AL, 02
Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $25,000,000
Exercised Options: $24,817,088
Current Obligation: $24,817,018
Timeline
Start Date: 2005-12-01
Current End Date: 2013-11-14
Potential End Date: 2013-11-14 00:00:00
Last Modified: 2013-11-19
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