DoD awards $63M environmental cleanup contract to Sevonson Environmental Services for 5-year New Jersey remediation project

Contract Overview

Contract Amount: $63,043,117 ($63.0M)

Contractor: Sevenson Environmental Services, Inc.

Awarding Agency: Department of Defense

Start Date: 2024-03-25

End Date: 2029-03-24

Contract Duration: 1,825 days

Daily Burn Rate: $34.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: MATTEO OU1 REMEDIAL ACTION

Place of Performance

Location: NATIONAL PARK, GLOUCESTER County, NEW JERSEY, 08063

State: New Jersey Government Spending

Plain-Language Summary

Department of Defense obligated $63.0 million to SEVENSON ENVIRONMENTAL SERVICES, INC. for work described as: MATTEO OU1 REMEDIAL ACTION Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract type is Cost Plus Fixed Fee, which can incentivize cost control but also carries inherent risk. 3. The duration of 1825 days (5 years) indicates a long-term commitment to the remediation effort. 4. The North American Industry Classification System (NAICS) code 562910 points to a specialized environmental remediation service. 5. The contract is a definitive contract, implying a firm commitment from the government. 6. The award was made by the Department of the Army, a component of the Department of Defense.

Value Assessment

Rating: fair

Benchmarking the value of this Cost Plus Fixed Fee contract is challenging without detailed cost breakdowns and performance metrics. The fixed fee component provides some predictability, but the cost-reimbursement nature means actual spending could fluctuate. Comparing this to similar large-scale environmental remediation contracts would be necessary for a more precise value assessment. The price is likely influenced by the specialized nature of the work and the long-term commitment required.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit a bid. The presence of 3 bidders suggests a moderate level of competition for this specialized service. While multiple bidders are positive, the specific nature of environmental remediation can sometimes limit the pool of qualified contractors.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to more favorable pricing and better service quality.

Public Impact

The primary beneficiaries are the Department of Defense and potentially the environment in New Jersey, through the cleanup of hazardous sites. The services delivered involve complex environmental remediation, likely addressing contamination and hazardous waste. The geographic impact is focused on New Jersey, where the remediation activities will take place. The contract implies the need for a skilled workforce in environmental science, engineering, and hazardous material handling.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can lead to cost overruns if not managed diligently.
The long duration of the contract may present challenges in adapting to evolving environmental regulations or technologies.
Specialized environmental remediation can be complex, increasing the risk of unforeseen issues during the project lifecycle.

Positive Signals

Awarded through full and open competition, indicating a robust bidding process.
The definitive contract structure provides a clear commitment from the government.
The specialized nature of the work suggests the contractor possesses necessary expertise.

Sector Analysis

Environmental remediation services represent a critical sector within the broader environmental services industry. This contract falls under the NAICS code 562910, which covers Remediation Services. The market for environmental remediation is driven by regulatory compliance, historical contamination cleanup, and infrastructure development. Spending in this sector can be substantial, particularly for government contracts involving large-scale cleanup operations at military bases or Superfund sites. Comparable spending benchmarks would typically involve analyzing other large federal contracts for similar environmental cleanup projects.

Small Business Impact

The provided data indicates that small business participation (sb) is false, and there is no explicit mention of a small business set-aside (ss). This suggests that the contract was not specifically targeted towards small businesses. Therefore, the direct impact on the small business ecosystem through this specific award is likely minimal, though subcontracting opportunities could potentially exist if the prime contractor engages smaller firms.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. Accountability measures would be embedded within the Cost Plus Fixed Fee structure, requiring detailed reporting and justification of costs. Transparency would be facilitated through contract award databases and potentially through public reporting on environmental cleanup progress, depending on agency policies and the nature of the sites being remediated. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

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

Risk Flags

Cost Plus Fixed Fee contract type requires careful oversight to manage costs.
Long contract duration (5 years) increases risk of unforeseen issues and regulatory changes.
Specialized nature of environmental remediation can limit competition and increase complexity.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $63.0 million to SEVENSON ENVIRONMENTAL SERVICES, INC.. MATTEO OU1 REMEDIAL ACTION

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 $63.0 million.

What is the period of performance?

Start: 2024-03-25. End: 2029-03-24.

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

The Department of the Army, as a major component of the Department of Defense, consistently allocates significant funds towards environmental remediation. Historical data indicates a sustained investment in cleaning up contaminated sites on military installations and surrounding areas, driven by environmental regulations and the legacy of past industrial activities. Annual spending can fluctuate based on specific project needs, the discovery of new contamination, and the availability of appropriations. Analyzing trends over the past decade would reveal patterns in the types of services procured (e.g., site assessment, soil and groundwater remediation, demolition) and the average contract values. This specific $63 million award for a 5-year project is in line with the scale of major environmental cleanup efforts undertaken by the Army, which often involve multi-year, high-value contracts to address complex environmental challenges.

How does the Cost Plus Fixed Fee (CPFF) contract type compare to other pricing arrangements for environmental remediation?

The Cost Plus Fixed Fee (CPFF) contract type is often used for complex projects where the scope of work is not precisely defined at the outset, or where unforeseen challenges are anticipated, such as in environmental remediation. In a CPFF contract, the contractor is reimbursed for allowable costs plus a fixed fee representing profit. This differs from Firm-Fixed-Price (FFP) contracts, where the price is set regardless of the actual costs incurred, offering greater cost certainty to the government but potentially higher risk for the contractor if costs escalate. Another alternative is Cost Plus Incentive Fee (CPIF), which adjusts the fee based on performance against pre-determined targets. For environmental remediation, CPFF can be advantageous when the extent of contamination or the required cleanup methods are uncertain, allowing for flexibility. However, it requires robust government oversight to manage costs effectively and prevent contractor inefficiencies, as the incentive for cost control is primarily driven by the fixed fee rather than direct cost savings.

What are the potential risks associated with a 5-year environmental remediation contract?

A 5-year duration for an environmental remediation contract presents several potential risks. Firstly, the long timeframe increases the likelihood of encountering unforeseen site conditions or technical challenges that were not apparent during the initial assessment, potentially leading to scope changes and cost increases. Secondly, environmental regulations can evolve over the contract period, requiring adaptive strategies and potentially additional work to ensure ongoing compliance. Thirdly, contractor performance can degrade over extended periods due to personnel turnover or shifts in company priorities, necessitating vigilant oversight. Fourthly, the fixed fee component, while providing profit certainty, might not adequately account for significant inflation or unexpected material cost increases over five years. Finally, maintaining consistent government oversight and project management continuity over such a long duration can be challenging, potentially impacting the effectiveness of quality control and risk mitigation efforts.

How does the number of bidders (3) impact price discovery for this contract?

Having three bidders for this environmental remediation contract suggests a moderate level of competition. While more bidders generally lead to better price discovery and potentially lower prices for the government, three offers can still provide a reasonable basis for comparison. The government can evaluate the proposals not only on price but also on technical approach, past performance, and management capabilities. If the three bidders are highly qualified and represent diverse approaches or cost structures, the competition can still drive the selected contractor to offer a competitive price. However, if the pool of qualified contractors for this specialized work is inherently small, three bidders might represent a significant portion of the available market, and the government would need to ensure the evaluation process rigorously assesses value for money beyond just the lowest price.

What is the typical track record of contractors performing large-scale environmental remediation for the DoD?

Contractors performing large-scale environmental remediation for the Department of Defense (DoD) typically possess extensive experience and a proven track record in handling complex environmental challenges. These firms often specialize in areas such as hazardous waste management, site characterization, soil and groundwater remediation, demolition, and long-term monitoring. Key indicators of a strong track record include successful completion of similar projects for government agencies, adherence to stringent safety and environmental regulations, and positive performance evaluations. Many large environmental firms have dedicated government contracting divisions and possess the necessary security clearances and certifications. The DoD often relies on a mix of large, established environmental engineering and construction firms, as well as specialized subcontractors, to execute these extensive cleanup operations, prioritizing those with demonstrated capabilities in managing large budgets, complex logistics, and long-term project lifecycles.

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

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W912DQ23R3016

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: $63,043,117

Exercised Options: $63,043,117

Current Obligation: $63,043,117

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline