DOE Awards $79.8M Contract to BWXT for 3.6 MT of High-Assay Low-Enriched Uranium (HALEU) Processing
Contract Overview
Contract Amount: $79,811,931 ($79.8M)
Contractor: Bwxt Nuclear Operations Group, Inc.
Awarding Agency: Department of Energy
Start Date: 2023-08-24
End Date: 2028-08-23
Contract Duration: 1,826 days
Daily Burn Rate: $43.7K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: THE CONTRACTOR SHALL PROCESS 3.6 MT OF HALEU
Place of Performance
Location: LYNCHBURG, LYNCHBURG CITY County, VIRGINIA, 24505
State: Virginia Government Spending
Plain-Language Summary
Department of Energy obligated $79.8 million to BWXT NUCLEAR OPERATIONS GROUP, INC. for work described as: THE CONTRACTOR SHALL PROCESS 3.6 MT OF HALEU Key points: 1. Significant investment in nuclear fuel processing capacity. 2. BWXT is a key player in the nuclear industry, suggesting specialized capabilities. 3. Long-term contract (5 years) indicates sustained demand. 4. Potential risks associated with nuclear material handling and processing.
Value Assessment
Rating: fair
The contract value of $79.8 million for 3.6 MT of HALEU processing over five years appears reasonable given the specialized nature of the work. Benchmarking is difficult due to the unique requirements of HALEU processing.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This limits price discovery and may result in a higher cost than if competition were present. The justification for sole-source is likely based on BWXT's unique capabilities in handling and processing HALEU.
Taxpayer Impact: Taxpayers may be paying a premium due to the lack of competition. However, the strategic importance of HALEU processing for national energy goals could justify the expenditure.
Public Impact
Ensures a critical supply of nuclear fuel for potential future energy applications. Supports the domestic nuclear industry and associated technological development. Highlights the government's commitment to advanced nuclear fuel cycles.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Potential for cost overruns in specialized processing
- Security and safety risks associated with nuclear materials
Positive Signals
- Strategic national importance of HALEU
- BWXT's established expertise in nuclear operations
- Long-term contract provides stability
Sector Analysis
This contract falls under 'Other Basic Inorganic Chemical Manufacturing' but is highly specialized within the nuclear energy sector. Spending benchmarks are difficult to establish due to the unique nature of HALEU processing and the limited number of qualified providers.
Small Business Impact
This contract was awarded to BWXT Nuclear Operations Group, Inc., a large corporation. There is no indication of subcontracting opportunities for small businesses in the provided data.
Oversight & Accountability
The Department of Energy is the awarding and contracting agency. Oversight will be crucial to ensure safety, security, and adherence to the contract terms, especially given the sensitive nature of the materials being processed.
Related Government Programs
- Other Basic Inorganic Chemical Manufacturing
- Department of Energy Contracting
- Department of Energy Programs
Risk Flags
- Sole-source award limits competitive pricing.
- High-risk nature of nuclear material processing.
- Long-term commitment may not align with evolving technological needs.
- Potential for cost overruns due to specialized requirements.
Tags
other-basic-inorganic-chemical-manufactu, department-of-energy, va, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $79.8 million to BWXT NUCLEAR OPERATIONS GROUP, INC.. THE CONTRACTOR SHALL PROCESS 3.6 MT OF HALEU
Who is the contractor on this award?
The obligated recipient is BWXT NUCLEAR OPERATIONS GROUP, INC..
Which agency awarded this contract?
Awarding agency: Department of Energy (Department of Energy).
What is the total obligated amount?
The obligated amount is $79.8 million.
What is the period of performance?
Start: 2023-08-24. End: 2028-08-23.
What is the specific justification for the sole-source award, and what steps were taken to ensure fair pricing without competition?
The justification for a sole-source award typically rests on the unique capabilities or proprietary technology of the contractor. For HALEU processing, BWXT likely possesses specialized facilities and expertise essential for handling and enriching this material safely and effectively. The agency should have conducted a thorough market analysis to confirm no other sources could meet the requirements and negotiated the price rigorously to achieve the best possible value under the circumstances.
What are the primary risks associated with processing HALEU, and what mitigation strategies are in place?
Key risks include nuclear safety and security, environmental impact, and potential supply chain disruptions. Mitigation strategies involve stringent regulatory compliance, robust physical security measures, advanced monitoring systems, emergency preparedness plans, and redundant supply chain management. The contract likely includes specific clauses addressing these risks and requiring the contractor to maintain high standards of operational safety and security.
How does this contract contribute to the broader goals of advancing nuclear energy and reducing carbon emissions?
This contract is crucial for enabling the development and deployment of advanced nuclear reactors that utilize HALEU as fuel. HALEU is essential for the next generation of small modular reactors (SMRs) and other innovative designs, which promise more efficient, safer, and potentially lower-cost nuclear power. By securing the processing of this fuel, the government is directly supporting the transition to cleaner energy sources and reducing reliance on fossil fuels.
Industry Classification
NAICS: Manufacturing › Basic Chemical Manufacturing › Other Basic Inorganic Chemical Manufacturing
Product/Service Code: NATURAL RESOURCES MANAGEMENT › NATURAL RESOURCES - OTHER SVCS
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: BWX Technologies, Inc.
Address: 2016 MOUNT ATHOS RD, LYNCHBURG, VA, 24504
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $116,689,571
Exercised Options: $116,689,571
Current Obligation: $79,811,931
Actual Outlays: $55,556,163
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: 89233120DNA000025
IDV Type: IDC
Timeline
Start Date: 2023-08-24
Current End Date: 2028-08-23
Potential End Date: 2028-08-23 00:00:00
Last Modified: 2025-12-11
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