Department of the Army awards $57.2M Remedial Action contract to Sevson Environmental Services for 18 Mile Creek cleanup

Contract Overview

Contract Amount: $57,187,382 ($57.2M)

Contractor: Sevenson Environmental Services, Inc.

Awarding Agency: Department of Defense

Start Date: 2023-07-19

End Date: 2028-07-18

Contract Duration: 1,826 days

Daily Burn Rate: $31.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: REMEDIAL ACTION AT 18 MILE CREEK

Place of Performance

Location: GASPORT, NIAGARA County, NEW YORK, 14067

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $57.2 million to SEVENSON ENVIRONMENTAL SERVICES, INC. for work described as: REMEDIAL ACTION AT 18 MILE CREEK Key points: 1. Contract value appears reasonable given the scope of environmental remediation. 2. Full and open competition suggests a competitive bidding process. 3. Contract duration of 5 years indicates a long-term commitment to the project. 4. The contract type (Cost Plus Fixed Fee) allows for flexibility but requires careful oversight. 5. Geographic focus on New York highlights a specific regional environmental need. 6. The North American Industry Classification System (NAICS) code 562910 points to specialized environmental services.

Value Assessment

Rating: good

The contract value of $57.2 million for a 5-year environmental remediation project is within a typical range for such complex undertakings. Benchmarking against similar large-scale Superfund site cleanups or hazardous waste management contracts would provide a more precise value-for-money assessment. The Cost Plus Fixed Fee (CPFF) structure means the government pays for allowable costs plus a fixed fee, which can be advantageous for projects with uncertain scope but necessitates robust cost tracking and auditing to ensure efficiency and prevent overruns.

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 bids. With 3 bidders identified, this suggests a healthy level of competition for this significant environmental services contract. A competitive process generally leads to better pricing and service offerings for the government, as contractors vie to win the award.

Taxpayer Impact: Taxpayers benefit from the competitive nature of this award, as it likely drove down the overall cost compared to a sole-source or limited competition scenario. The presence of multiple bidders increases the likelihood that the selected contractor offers the best value at a fair price.

Public Impact

The primary beneficiaries are the residents and environment surrounding 18 Mile Creek, who will see a reduction in environmental hazards. The services delivered involve the cleanup and remediation of contaminated soil and water. The geographic impact is localized to the 18 Mile Creek area in New York. The contract supports specialized jobs in the environmental remediation sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can sometimes lead to higher costs if not managed diligently.
Long contract durations (5 years) may present risks if project requirements change significantly over time.
Environmental remediation projects inherently carry risks related to unforeseen site conditions and regulatory changes.

Positive Signals

Awarded under full and open competition, suggesting a competitive pricing environment.
The contractor, Sevson Environmental Services, Inc., is likely experienced in handling complex remediation projects.
The contract addresses a critical environmental cleanup need, demonstrating responsible stewardship.

Sector Analysis

The environmental remediation services sector is a critical component of the broader environmental services industry, which is driven by regulatory compliance, infrastructure needs, and a growing focus on sustainability. This contract falls under the remediation services sub-sector, which includes activities like hazardous waste site cleanup, soil and groundwater remediation, and demolition. The market for environmental remediation is substantial, with government contracts forming a significant portion due to Superfund sites and military base cleanups. This specific contract aligns with the government's ongoing efforts to address legacy environmental contamination.

Small Business Impact

There is no indication that this contract was specifically set aside for small businesses, nor is there information suggesting significant subcontracting opportunities for small businesses. Given the scale and specialized nature of the work, it is possible that larger firms with specialized capabilities were the primary focus of the competition. Further analysis would be needed to determine if small business subcontracting plans are a requirement of this contract.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Army contracting and technical officers. The Cost Plus Fixed Fee structure necessitates rigorous financial oversight to ensure that costs are allowable, reasonable, and allocable, and that the fixed fee is earned appropriately. Transparency will depend on the agency's reporting practices regarding contract performance and expenditures. Inspector General involvement would typically occur if specific allegations of fraud, waste, or abuse arise.

Related Government Programs

Superfund Site Remediation
Hazardous Waste Management
Environmental Cleanup Contracts
Department of Defense Environmental Programs

Risk Flags

Potential for cost overruns due to CPFF structure.
Risk of unforeseen site conditions impacting schedule and budget.
Long contract duration may require adjustments to evolving environmental regulations.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $57.2 million to SEVENSON ENVIRONMENTAL SERVICES, INC.. REMEDIAL ACTION AT 18 MILE CREEK

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 $57.2 million.

What is the period of performance?

Start: 2023-07-19. End: 2028-07-18.

What is the track record of Sevson Environmental Services, Inc. on similar government contracts?

Sevson Environmental Services, Inc. has a history of performing environmental remediation and construction services for government agencies. While specific details on past performance for similar large-scale remediation projects would require a deeper dive into contract databases and performance reports, their engagement on this significant 18 Mile Creek project suggests they possess the necessary qualifications and experience. Reviewing past contract awards, completion records, and any past performance evaluations would provide a clearer picture of their reliability and effectiveness in executing complex environmental cleanup operations. Understanding their experience with Cost Plus Fixed Fee contracts would also be beneficial.

How does the awarded amount compare to the estimated cost or budget for this remediation project?

Without access to the government's internal cost estimates or budget allocations for the 18 Mile Creek remedial action, it is difficult to definitively assess if the $57.2 million award represents optimal value. However, the fact that the contract was awarded under full and open competition with three bidders suggests that the awarded price is likely competitive and reflects market rates for such specialized services. A thorough value assessment would involve comparing this award to similar-sized environmental remediation projects undertaken by the government or private sector, considering factors like the complexity of contamination, site accessibility, and regulatory requirements.

What are the primary risks associated with this Cost Plus Fixed Fee contract structure for this project?

The primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for environmental remediation involve potential cost overruns and contractor inefficiency if not managed properly. While the fixed fee provides the contractor with a defined profit margin, the government bears the risk of allowable cost increases. This necessitates robust oversight from the contracting officer and technical team to scrutinize all incurred costs, ensure they are reasonable and allocable to the contract, and verify that the contractor is employing efficient methods. Unforeseen site conditions, common in remediation projects, can significantly increase costs, and the CPFF structure needs careful management to ensure these increases are justified and controlled.

What is the historical spending pattern for environmental remediation services by the Department of the Army?

The Department of the Army has a substantial and consistent history of spending on environmental remediation services, driven by the need to address contamination at current and former military installations, as well as participation in federal cleanup programs like Superfund. Annual spending can fluctuate based on the number and scale of active cleanup projects, regulatory requirements, and available appropriations. Historically, these expenditures often run into hundreds of millions, and sometimes billions, of dollars annually across the entire Department of Defense. This $57.2 million award for 18 Mile Creek is a significant but not unprecedented allocation within the broader context of the Army's environmental stewardship responsibilities.

How does the duration of this contract (5 years) impact the overall risk and value proposition?

A 5-year duration for an environmental remediation project like the 18 Mile Creek cleanup is relatively standard, reflecting the complex and time-consuming nature of such work. This extended period allows for phased remediation efforts, monitoring, and adaptive management as conditions evolve. From a risk perspective, a longer duration increases the potential for scope creep, changes in regulatory requirements, and economic fluctuations that could impact costs. However, it also provides continuity of effort and allows the contractor to develop specialized knowledge of the site, potentially leading to greater efficiency over time. The value proposition is enhanced by the ability to address a long-term environmental issue comprehensively, rather than through short-term, potentially less effective, interventions.

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

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: W912DQ19R3006

Offers Received: 3

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: $57,187,382

Exercised Options: $57,187,382

Current Obligation: $57,187,382

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W912DQ20D3010

IDV Type: IDC

Timeline