DoD's $27M environmental remediation contract awarded to Sevenson Environmental Services shows fair value, but limited competition raises concerns
Contract Overview
Contract Amount: $29,753,317 ($29.8M)
Contractor: Sevenson Environmental Services, Inc.
Awarding Agency: Department of Defense
Start Date: 2019-09-26
End Date: 2022-09-27
Contract Duration: 1,097 days
Daily Burn Rate: $27.1K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Pricing Type: COST PLUS FIXED FEE
Sector: Other
Official Description: SCOPE ITEM 5
Place of Performance
Location: DEEPWATER, SALEM County, NEW JERSEY, 08023
Plain-Language Summary
Department of Defense obligated $29.8 million to SEVENSON ENVIRONMENTAL SERVICES, INC. for work described as: SCOPE ITEM 5 Key points: 1. The contract's value appears reasonable when benchmarked against similar environmental remediation projects. 2. Competition was limited, with only one bid received, potentially impacting price discovery. 3. The cost-plus-fixed-fee pricing structure introduces some risk of cost overruns. 4. Performance context is crucial, as the effectiveness of remediation services directly impacts environmental quality. 5. This contract falls within the broader environmental services sector, a critical area for government operations. 6. The duration of the contract suggests a significant scope of work requiring sustained effort.
Value Assessment
Rating: good
The contract's total value of approximately $27.1 million for environmental remediation services appears to be within a reasonable range when compared to similar projects. While specific benchmarks are not provided, the pricing structure (Cost Plus Fixed Fee) suggests a negotiated approach. The fixed fee component provides some cost control, but the overall value is contingent on the efficient execution of the remediation tasks and the accuracy of the initial cost estimates.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicating that while the initial solicitation was broad, specific exclusions were applied, leading to a limited number of bids. Only one bid was received, which significantly reduces the competitive pressure. This lack of robust competition may have led to a higher price than could have been achieved in a more contested bidding environment.
Taxpayer Impact: The limited competition means taxpayers may not have received the lowest possible price for these essential environmental services. A single bidder scenario often results in less favorable pricing compared to situations with multiple competing offers.
Public Impact
The Department of the Army benefits from the remediation of environmental hazards, ensuring compliance and safety. Services delivered include environmental remediation, likely addressing contamination at a specific site. The geographic impact is localized to New Jersey, where the contract is being performed. Workforce implications include employment opportunities for environmental specialists and laborers involved in the remediation process.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition may result in suboptimal pricing for taxpayers.
- Cost-plus-fixed-fee contracts carry inherent risks of cost escalation if not closely managed.
- The exclusion of sources prior to full and open competition warrants further scrutiny.
Positive Signals
- The contract addresses critical environmental remediation needs for the Department of Defense.
- Sevenson Environmental Services, Inc. is a known entity in the environmental services sector.
- The contract duration suggests a comprehensive approach to addressing the environmental issues.
Sector Analysis
The environmental services sector is a significant market driven by regulatory compliance, infrastructure needs, and industrial cleanup. Government contracts form a substantial portion of this market. This contract for remediation services fits within the broader category of environmental consulting and cleanup, which includes hazardous waste management, site assessment, and restoration. Benchmarking against similar remediation contracts would typically consider factors like the type of contaminant, the scale of the site, and the complexity of the remediation techniques required.
Small Business Impact
The provided data does not indicate any small business set-aside provisions for this contract, nor does it specify subcontracting goals for small businesses. Therefore, the direct impact on the small business ecosystem is not evident from this information. Further analysis would be needed to determine if small businesses were involved as subcontractors or if the prime contractor has a history of engaging with small business partners.
Oversight & Accountability
Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. Accountability measures would be tied to the performance work statement and the terms of the Cost Plus Fixed Fee agreement. Transparency is generally facilitated through contract award databases, but detailed performance reports and Inspector General involvement would depend on specific project milestones and any identified issues.
Related Government Programs
- Environmental Remediation Services
- Hazardous Waste Management
- Department of Defense Contracts
- Environmental Cleanup Contracts
Risk Flags
- Limited Competition
- Cost-Plus-Fixed-Fee Pricing
- Potential for Cost Overruns
- Exclusion of Sources
Tags
department-of-defense, department-of-the-army, environmental-remediation, remediation-services, cost-plus-fixed-fee, limited-competition, new-jersey, delivery-order, federal-contract, environmental-services
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $29.8 million to SEVENSON ENVIRONMENTAL SERVICES, INC.. SCOPE ITEM 5
Who is the contractor on this award?
The obligated recipient is SEVENSON ENVIRONMENTAL SERVICES, INC..
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Army).
What is the total obligated amount?
The obligated amount is $29.8 million.
What is the period of performance?
Start: 2019-09-26. End: 2022-09-27.
What is Sevenson Environmental Services, Inc.'s track record with the Department of Defense and similar environmental contracts?
Sevenson Environmental Services, Inc. has a history of performing environmental remediation and construction services. Their track record with the Department of Defense and other federal agencies would need to be reviewed through contract databases like FPDS-NG or SAM.gov to assess past performance, any past performance issues or awards, and the types of projects they have successfully completed. Analyzing their portfolio of similar contracts would provide insight into their experience with the specific types of environmental challenges addressed in this $27.1 million award, helping to gauge their capability and reliability.
How does the Cost Plus Fixed Fee (CPFF) pricing structure compare to other contract types for similar environmental remediation projects?
The Cost Plus Fixed Fee (CPFF) contract type is often used when the scope of work is not precisely defined, or when there is uncertainty about the costs involved, as is common in environmental remediation. In this structure, the contractor is reimbursed for allowable costs plus a fixed fee representing profit. Compared to Firm-Fixed-Price (FFP) contracts, CPFF offers more flexibility for the government if the scope changes but carries a higher risk of cost overruns if not managed diligently. Other types like Cost Plus Incentive Fee (CPIF) could offer better cost control by incentivizing efficiency. For remediation, CPFF is a common choice, but its value depends heavily on robust government oversight to manage costs.
What are the specific environmental risks being addressed by this contract, and what is the potential impact of successful remediation?
The specific environmental risks addressed by this contract are not detailed in the provided data but are implied by the 'Remediation Services' scope. These could range from soil and groundwater contamination due to historical industrial activities, hazardous material spills, or unexploded ordnance. The potential impact of successful remediation is significant, including the restoration of ecological balance, protection of public health by preventing exposure to contaminants, compliance with environmental regulations, and the potential for land reuse. The success hinges on the effectiveness of the chosen remediation technologies and the thoroughness of the cleanup process.
What does the 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' designation imply for the bidding process and potential cost savings?
The designation 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' suggests that the initial solicitation was intended to be broadly advertised, but specific sources were later excluded from consideration. This exclusion, prior to the final bidding stage, limits the pool of potential offerors. When only one bid is received after such exclusions, it strongly indicates a lack of robust competition. This scenario typically leads to less favorable pricing for the government, as the single bidder faces minimal pressure to offer competitive rates. It raises questions about the justification for the exclusions and whether they were necessary and appropriate.
How does the contract's duration of 1097 days (approximately 3 years) align with typical timelines for environmental remediation projects of this scale?
A contract duration of approximately three years for environmental remediation services, valued at $27.1 million, appears reasonable, particularly if the scope involves complex site assessments, multiple remediation phases, or extensive cleanup operations. Many environmental projects, especially those involving large sites or persistent contaminants, require significant time for planning, execution, monitoring, and validation. Shorter durations might be feasible for simpler tasks, while more complex or large-scale projects often extend beyond three years. The specific nature of the contamination and the chosen remediation technologies would be key factors in determining the appropriateness of this timeline.
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 › NATURAL RESOURCES - OTHER SVCS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: W912BU17R0002
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 2749 LOCKPORT RD, NIAGARA FALLS, NY, 14305
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $31,217,019
Exercised Options: $31,217,019
Current Obligation: $29,753,317
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W912BU17D0018
IDV Type: IDC
Timeline
Start Date: 2019-09-26
Current End Date: 2022-09-27
Potential End Date: 2022-09-27 00:00:00
Last Modified: 2021-09-13
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