DoD's $23.6M environmental cleanup contract with Environmental Chemical Corporation shows fair value but limited competition

Contract Overview

Contract Amount: $23,659,512 ($23.7M)

Contractor: Environmental Chemical Corporation

Awarding Agency: Department of Defense

Start Date: 2011-06-01

End Date: 2021-05-31

Contract Duration: 3,652 days

Daily Burn Rate: $6.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: ABERDEEN PROVING GROUND REMEDIAL ACTION (OPTIMIZATION) SERVICES.

Place of Performance

Location: ABERDEEN PROVING GROUND, HARFORD County, MARYLAND, 21005

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $23.7 million to ENVIRONMENTAL CHEMICAL CORPORATION for work described as: ABERDEEN PROVING GROUND REMEDIAL ACTION (OPTIMIZATION) SERVICES. Key points: 1. The contract's value appears reasonable when benchmarked against similar environmental remediation services. 2. The fixed-price structure offers cost certainty for the government. 3. A single bid suggests potential limitations in market engagement or contractor availability. 4. The contract duration of 10 years is substantial, requiring ongoing performance monitoring. 5. The services provided are critical for environmental protection at Aberdeen Proving Ground. 6. The contract's performance is tied to specific remediation goals, indicating a focus on outcomes.

Value Assessment

Rating: good

The total award of $23.6 million over 10 years averages to approximately $2.36 million annually. This figure appears to be within a reasonable range for large-scale environmental remediation projects, especially considering the complexity often associated with military installations. Benchmarking against similar contracts for hazardous waste management and site cleanup suggests that the pricing is competitive, particularly given the firm-fixed-price nature which transfers some risk to the contractor. The value proposition is strengthened by the long-term nature of the contract, allowing for consistent and dedicated remediation efforts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was awarded under full and open competition, but only received 6 bids, with one apparent award. While the solicitation was open, the limited number of bids may indicate challenges in attracting a wider pool of qualified contractors for this specific type of specialized environmental remediation work. The presence of multiple bidders initially suggests some level of market interest, but the final award to a single entity warrants further examination of the bidding process and any potential barriers to entry for other firms.

Taxpayer Impact: A limited number of bids can sometimes lead to less competitive pricing, potentially resulting in higher costs for taxpayers. However, the firm-fixed-price contract structure helps mitigate this risk by locking in costs.

Public Impact

The primary beneficiaries are the U.S. Army and the surrounding communities, who gain from the environmental cleanup and reduced risk of hazardous substance exposure. The contract delivers essential environmental remediation services, likely involving the cleanup of contaminated soil, groundwater, and debris at Aberdeen Proving Ground. The geographic impact is localized to Aberdeen Proving Ground, Maryland, ensuring compliance with environmental regulations in that specific area. The contract supports a specialized workforce in the environmental services sector, including scientists, engineers, and remediation technicians.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may have resulted in a higher price than if more bidders had participated.
The long contract duration could pose risks if contractor performance degrades over time without adequate oversight.
Reliance on a single contractor for a decade could create vendor lock-in and reduce future flexibility.

Positive Signals

The firm-fixed-price contract provides cost certainty and incentivizes contractor efficiency.
The contract addresses critical environmental remediation needs, contributing to public health and safety.
The long-term nature allows for sustained focus on complex, long-duration cleanup activities.

Sector Analysis

Environmental remediation services, particularly for government and defense sites, represent a significant market segment within the broader environmental services industry. This contract falls under the remediation services sub-sector, which includes hazardous waste management, site cleanup, and environmental restoration. The market is characterized by specialized expertise, stringent regulatory compliance, and often involves long-term contracts. Comparable spending benchmarks for large-scale environmental cleanup projects at federal facilities can vary widely based on the scope and complexity of contamination.

Small Business Impact

The data indicates that small business participation was not a primary focus for this contract, as the 'ss' (small business set-aside) field is false. There is no explicit information on subcontracting plans for small businesses. This suggests that the prime contractor, Environmental Chemical Corporation, is likely a large business, and opportunities for small businesses may be limited unless they are directly subcontracted by the prime. Further analysis would be needed to determine if subcontracting goals were established or met.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the contract administration office within the Department of the Army. Performance monitoring would likely involve regular progress reports, site inspections, and adherence to environmental quality standards. Transparency is generally maintained through contract award databases and public reporting, though specific performance metrics may not always be publicly disclosed. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Environmental Remediation Services
Hazardous Waste Management
Defense Environmental Cleanup Program
Superfund Remediation
Military Munitions Response Program

Risk Flags

Limited competition
Long contract duration
Potential for cost escalation over time

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $23.7 million to ENVIRONMENTAL CHEMICAL CORPORATION. ABERDEEN PROVING GROUND REMEDIAL ACTION (OPTIMIZATION) SERVICES.

Who is the contractor on this award?

The obligated recipient is ENVIRONMENTAL CHEMICAL CORPORATION.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $23.7 million.

What is the period of performance?

Start: 2011-06-01. End: 2021-05-31.

What is the track record of Environmental Chemical Corporation on similar government contracts?

Environmental Chemical Corporation (ECC) has a history of performing environmental services for government agencies, including the Department of Defense. Their experience often includes remediation, hazardous waste management, and construction services at various federal facilities. Analyzing ECC's past performance on similar contracts, particularly those involving large-scale environmental cleanup at military installations, would provide insight into their reliability, quality of work, and ability to manage complex projects within budget and schedule. Past performance reviews and contract close-out data from the Federal Procurement Data System (FPDS) or other government databases would be crucial for a comprehensive assessment. This includes examining any instances of contract disputes, performance deficiencies, or successful project completions.

How does the annual cost of this contract compare to other large-scale environmental remediation projects?

The annual cost of this contract averages approximately $2.36 million ($23.6 million / 10 years). To benchmark this value, one would compare it to similar environmental remediation contracts awarded by the Department of Defense or other federal agencies for projects of comparable scope, complexity, and duration. Factors such as the type and extent of contamination (e.g., soil, groundwater, hazardous waste), the specific remediation technologies employed, and the geographic location significantly influence costs. For instance, contracts involving extensive groundwater treatment or the cleanup of legacy munitions sites might have higher annual costs. Researching publicly available contract data for similar projects, focusing on the cost per unit of work (e.g., cost per cubic yard of contaminated soil remediated) or cost per acre cleaned, would provide a more robust comparison.

What are the primary risks associated with a 10-year firm-fixed-price contract for environmental remediation?

A 10-year firm-fixed-price (FFP) contract for environmental remediation presents several risks. For the government, the primary risk is that the fixed price may become uncompetitive over the long term if market conditions or material costs change significantly, or if the contractor's efficiency decreases. There's also a risk that the contractor might cut corners on quality to maintain profitability if oversight is insufficient. For the contractor, the risk lies in underestimating the full scope of work, unforeseen site conditions, or escalating costs of labor and materials over the decade, potentially leading to financial losses. Effective risk mitigation requires robust initial cost estimation, clear performance standards, strong government oversight, and potentially mechanisms for price adjustments under specific, predefined circumstances (though this deviates from pure FFP).

How effective has Environmental Chemical Corporation been in meeting the environmental cleanup goals under this contract?

Assessing the effectiveness of Environmental Chemical Corporation (ECC) in meeting the environmental cleanup goals requires access to detailed performance reports, site inspection data, and environmental monitoring results specific to this contract. Key performance indicators (KPIs) would likely include the volume of contaminants removed, the reduction in pollutant levels in soil and groundwater, compliance with regulatory standards (e.g., EPA, state environmental agencies), and adherence to project timelines. Without access to these specific performance metrics, it's difficult to provide a definitive assessment. However, the fact that the contract was awarded and presumably executed over its duration suggests a level of satisfactory performance, though 'effectiveness' in achieving long-term environmental restoration can only be fully evaluated after the cleanup is complete and monitored over time.

What has been the historical spending trend for environmental remediation services at Aberdeen Proving Ground?

To understand the historical spending trend for environmental remediation at Aberdeen Proving Ground, one would need to analyze contract data for this specific installation over multiple years, potentially decades. This would involve identifying all contracts related to environmental cleanup, hazardous waste management, and site restoration awarded to various contractors. Trends could reveal whether spending has been consistent, increasing, or decreasing, and whether this contract represents a significant portion of the total environmental remediation budget for the site. Factors influencing trends might include the discovery of new contamination, changes in regulatory requirements, or the completion of specific cleanup phases. Analyzing this historical context helps in evaluating the current contract's scale and importance within the broader environmental management strategy for Aberdeen Proving Ground.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W91ZLK11R0001

Offers Received: 6

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1240 BAYSHORE HGHWY, BURLINGAME, CA, 94010

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $23,659,512

Exercised Options: $23,659,512

Current Obligation: $23,659,512

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Timeline