DOE's $3.3B Argonne Lab contract with UChicago awarded without competition, spanning 7 years
Contract Overview
Contract Amount: $3,303,434,240 ($3.3B)
Contractor: University of Chicago
Awarding Agency: Department of Energy
Start Date: 1999-10-08
End Date: 2006-09-30
Contract Duration: 2,549 days
Daily Burn Rate: $1.3M/day
Competition Type: NOT COMPETED
Pricing Type: COST NO FEE
Sector: R&D
Official Description: OPERATION OF ARGONNE NATIONAL LABORATORY
Place of Performance
Location: CHICAGO, COOK County, ILLINOIS, 60637
State: Illinois Government Spending
Plain-Language Summary
Department of Energy obligated $3.30 billion to UNIVERSITY OF CHICAGO for work described as: OPERATION OF ARGONNE NATIONAL LABORATORY Key points: 1. The contract value is substantial at $3.3 billion over seven years. 2. Lack of competition raises questions about price discovery and potential value. 3. The primary risk lies in the absence of competitive pressure to optimize costs. 4. This falls under the Research and Development sector, specifically physical, engineering, and life sciences.
Value Assessment
Rating: questionable
The contract type is 'COST NO FEE', which typically means the government reimburses costs but does not pay a fee. Without a competitive bidding process, it's difficult to assess if the costs are optimized or if the fee structure, if any, is reasonable compared to similar R&D contracts.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded as 'NOT COMPETED', indicating a sole-source or limited competition approach. This significantly limits price discovery as there is no benchmark from competing offers. The government relies heavily on the contractor's cost proposals and oversight.
Taxpayer Impact: The lack of competition may lead to higher costs for taxpayers if efficiencies are not rigorously pursued and monitored by the agency.
Public Impact
Significant taxpayer funds are allocated to a single entity for a long duration. The public may have limited insight into the cost-effectiveness of the research conducted. The absence of competition could stifle innovation in how the laboratory is managed and operated.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Long contract duration
- Cost-reimbursement contract type
Positive Signals
- Established institution (University of Chicago)
- Long operational history (implied by duration)
Sector Analysis
This contract is within the Research and Development sector, specifically for physical, engineering, and life sciences. Federal spending in this area is crucial for innovation but requires careful oversight due to the often intangible nature of outcomes and the potential for cost overruns.
Small Business Impact
There is no indication that small businesses were involved in this contract award. The nature of operating a national laboratory typically involves large-scale infrastructure and expertise, often excluding smaller entities.
Oversight & Accountability
The Department of Energy is the awarding and overseeing agency. Given the sole-source nature and cost-reimbursement structure, robust oversight is critical to ensure funds are used efficiently and effectively towards the stated research objectives.
Related Government Programs
- Research and Development in the Physical, Engineering, and Life Sciences
- Department of Energy Contracting
- Department of Energy Programs
Risk Flags
- Lack of competition may lead to inflated costs.
- Long contract duration limits flexibility and potential for cost savings through re-competition.
- Cost-reimbursement contract type offers less incentive for contractor efficiency.
- Potential for agency oversight to be less stringent without competitive benchmarks.
Tags
research-and-development-in-the-physical, department-of-energy, il, dca, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $3.30 billion to UNIVERSITY OF CHICAGO. OPERATION OF ARGONNE NATIONAL LABORATORY
Who is the contractor on this award?
The obligated recipient is UNIVERSITY OF CHICAGO.
Which agency awarded this contract?
Awarding agency: Department of Energy (Department of Energy).
What is the total obligated amount?
The obligated amount is $3.30 billion.
What is the period of performance?
Start: 1999-10-08. End: 2006-09-30.
How does the Department of Energy ensure cost efficiency and value for money in a sole-source, cost-reimbursement contract for operating a national laboratory?
The Department of Energy likely employs rigorous indirect cost rate audits, performance metrics tied to research milestones, and regular reviews of operational expenditures. They would also benchmark against industry standards and potentially conduct market research to ensure the contractor's proposed costs are reasonable, even without direct competition.
What are the potential risks associated with awarding a 7-year, $3.3 billion contract without competition for managing a national laboratory?
The primary risks include a lack of incentive for cost savings, potential for scope creep without competitive pressure, and reduced innovation in management practices. There's also a risk that alternative, potentially more cost-effective, management approaches are not explored. The long duration exacerbates these risks.
How effective is this contract structure in achieving the intended research and development goals for Argonne National Laboratory?
The effectiveness hinges on the clarity of the statement of work, the strength of the performance metrics, and the rigor of the DOE's oversight. While a sole-source award can ensure continuity and leverage specialized expertise, its effectiveness in driving innovation and efficiency is less guaranteed than a competitive process.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences
Product/Service Code: OPERATION OF GOVT OWNED FACILITY › OPERATE GOVT OWNED BUILDINGS
Competition & Pricing
Extent Competed: NOT COMPETED
Pricing Type: COST NO FEE (S)
Contractor Details
Address: 5801 SOUTH ELLIS AVENUE, CHICAGO, IL, 90
Business Categories: Category Business, Educational Institution, Higher Education, Nonprofit Organization, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $105,863,476,199
Exercised Options: $119,780,338,397
Current Obligation: $3,303,434,240
Timeline
Start Date: 1999-10-08
Current End Date: 2006-09-30
Potential End Date: 2006-09-30 00:00:00
Last Modified: 2010-05-03
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