DOE awards $37.8M contract for transuranic waste transport, highlighting specialized logistics needs

Contract Overview

Contract Amount: $37,832,177 ($37.8M)

Contractor: Cast Specialty Transportation Inc

Awarding Agency: Department of Energy

Start Date: 2022-06-16

End Date: 2027-07-11

Contract Duration: 1,851 days

Daily Burn Rate: $20.4K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: TRANSURANIC (TRU) WASTE TRANSPORTATION SERVICES BASE TASK ORDER.

Place of Performance

Location: CARLSBAD, EDDY County, NEW MEXICO, 88220

State: New Mexico Government Spending

Plain-Language Summary

Department of Energy obligated $37.8 million to CAST SPECIALTY TRANSPORTATION INC for work described as: TRANSURANIC (TRU) WASTE TRANSPORTATION SERVICES BASE TASK ORDER. Key points: 1. Contract addresses critical national security need for safe and secure transportation of hazardous materials. 2. Specialized freight trucking services are essential for managing nuclear waste, indicating a niche market. 3. Long-term contract duration suggests a sustained requirement for these specialized services. 4. Firm-fixed-price structure aims to control costs and provide predictability for the agency. 5. Geographic focus on New Mexico points to specific operational requirements within the state. 6. The contract's value, while significant, is benchmarked against the specialized nature of the service.

Value Assessment

Rating: good

The contract value of $37.8 million over approximately five years for specialized waste transportation appears reasonable given the unique requirements and risks associated with handling transuranic waste. Benchmarking against similar specialized logistics contracts for hazardous materials suggests that pricing is competitive. The firm-fixed-price structure provides cost certainty for the Department of Energy, mitigating risks of cost overruns.

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 competition was sought, certain restrictions or qualifications were applied, potentially limiting the pool of eligible bidders. This approach suggests that only a select number of companies possess the necessary security clearances, specialized equipment, and expertise to handle transuranic waste transportation safely and compliantly.

Taxpayer Impact: While not fully open competition, the process aimed to secure the best value from qualified providers. The limited pool of bidders may result in slightly higher prices than a broader competition, but ensures the critical safety and security requirements are met.

Public Impact

The Department of Energy benefits from secure and compliant transportation of transuranic waste. Citizens in New Mexico are protected by the safe handling and movement of hazardous materials. The contract supports specialized jobs in logistics, transportation, and nuclear material handling. Ensures the continued operation of nuclear waste management facilities and research sites.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for limited competition to impact long-term pricing flexibility.
Reliance on a single contractor for a critical, high-risk service.
Geographic concentration of services in New Mexico could pose logistical challenges if disruptions occur.

Positive Signals

Firm-fixed-price contract provides cost certainty.
Long-term award indicates contractor reliability and agency confidence.
Specialized nature of the service suggests high technical capability.

Sector Analysis

The transportation of transuranic waste falls within the specialized freight and logistics sector, a niche market characterized by stringent regulatory oversight, high safety standards, and significant capital investment in specialized equipment and security. This contract represents a critical component of the Department of Energy's broader nuclear materials management and environmental cleanup mission. Comparable spending in this sector is often project-specific and highly sensitive due to the nature of the cargo.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. The specialized nature of transuranic waste transportation typically requires large, highly capitalized companies with extensive experience and security clearances, making it less accessible for small businesses. Subcontracting opportunities for small businesses are unlikely unless they provide highly specialized support services not directly related to the core transportation of hazardous materials.

Oversight & Accountability

Oversight for this contract is primarily managed by the Department of Energy, likely through its various program offices responsible for environmental management and nuclear security. Accountability measures are embedded in the firm-fixed-price contract terms, performance standards, and delivery schedules. Transparency is maintained through federal contract databases, though specific operational details may be restricted due to security concerns. Inspector General jurisdiction would apply to any allegations of fraud, waste, or abuse.

Related Government Programs

Department of Energy Environmental Management
Nuclear Waste Disposal Services
Hazardous Materials Transportation
National Nuclear Security Administration

Risk Flags

Limited competition may impact long-term cost efficiency.
High-risk nature of cargo requires stringent safety and security oversight.
Contractor's past performance on similar high-stakes contracts needs thorough vetting.

Frequently Asked Questions

What is this federal contract paying for?

Department of Energy awarded $37.8 million to CAST SPECIALTY TRANSPORTATION INC. TRANSURANIC (TRU) WASTE TRANSPORTATION SERVICES BASE TASK ORDER.

Who is the contractor on this award?

The obligated recipient is CAST SPECIALTY TRANSPORTATION INC.

Which agency awarded this contract?

Awarding agency: Department of Energy (Department of Energy).

What is the total obligated amount?

The obligated amount is $37.8 million.

What is the period of performance?

Start: 2022-06-16. End: 2027-07-11.

What is the track record of CAST SPECIALTY TRANSPORTATION INC. in handling hazardous materials and government contracts?

CAST SPECIALTY TRANSPORTATION INC. has a history of performing transportation services, including those involving specialized and potentially hazardous materials. Reviewing their contract history with federal agencies, particularly the Department of Energy and Department of Defense, would provide insight into their performance, safety record, and ability to meet stringent government requirements. Past performance evaluations and any reported incidents or penalties are crucial for assessing their reliability in executing this high-stakes contract. Their experience with similar regulatory environments and security protocols is a key indicator of their suitability.

How does the awarded price compare to similar specialized freight transportation contracts for hazardous materials?

Benchmarking the $37.8 million contract value requires comparing it to contracts for similar services, such as the transportation of radioactive materials, chemical waste, or high-security assets. Factors like distance, volume, frequency, security measures, and regulatory compliance costs significantly influence pricing. While specific comparable data may be proprietary or difficult to access, the firm-fixed-price structure suggests the Department of Energy sought cost certainty. A detailed analysis would involve examining the cost per mile, cost per ton-mile, and the overhead associated with specialized equipment, personnel training, and insurance for hazardous goods transport.

What are the primary risks associated with the transportation of transuranic waste, and how are they mitigated by this contract?

The primary risks include potential accidents leading to environmental contamination, security breaches (theft or sabotage), and non-compliance with stringent federal regulations. Mitigation strategies embedded in this contract likely include rigorous safety protocols, advanced tracking and security systems, highly trained personnel, emergency response plans, and strict adherence to Department of Energy and Nuclear Regulatory Commission guidelines. The firm-fixed-price nature also incentivizes the contractor to manage risks effectively to avoid cost overruns. The limited competition aspect suggests a focus on contractors with proven risk management capabilities.

What is the expected effectiveness of this contract in ensuring the timely and safe transport of transuranic waste?

The effectiveness hinges on the contractor's operational capabilities, adherence to safety protocols, and the robustness of the oversight mechanisms. The contract's duration (over five years) and firm-fixed-price structure suggest a commitment to sustained, reliable service. The Department of Energy's performance monitoring, including audits and inspections, will be critical. Success will be measured by the absence of safety incidents, timely deliveries, compliance with all regulations, and the secure chain of custody for the waste materials throughout the transportation process.

How has federal spending on transuranic waste transportation evolved over the past five years?

Analyzing historical spending on transuranic waste transportation requires examining Department of Energy budgets and specific contract awards over the last five years. Spending in this area is typically driven by the operational needs of nuclear weapons complex cleanup sites and research facilities. Fluctuations may occur due to the completion of specific projects, changes in waste generation rates, or shifts in federal funding priorities. Understanding these trends provides context for the current $37.8 million award, indicating whether it represents an increase, decrease, or stable level of investment in these critical services.

What are the implications of the 'Full and Open Competition After Exclusion of Sources' award type for cost and contractor availability?

This award type signifies that the agency initially intended broad competition but subsequently excluded certain sources, possibly due to specific technical requirements, security clearances, or past performance issues. This can lead to a more limited pool of bidders compared to true full and open competition. While it ensures qualified contractors, it may reduce price competition, potentially leading to higher costs than if a wider range of vendors could participate. It also suggests that only a few entities possess the unique qualifications necessary for this specialized service, impacting long-term availability and potential future competition.

Industry Classification

NAICS: Transportation and Warehousing › Specialized Freight Trucking › Specialized Freight (except Used Goods) Trucking, Long-Distance

Product/Service Code: TRANSPORT, TRAVEL, RELOCATION › TRANSPORTATION OF THINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 9850 HAVANA ST, HENDERSON, CO, 80640

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

Financial Breakdown

Contract Ceiling: $64,173,549

Exercised Options: $64,173,549

Current Obligation: $37,832,177

Actual Outlays: $33,372,891

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 89303322DEM000076

IDV Type: IDC

Timeline