DOE's $716M Facilities Support Contract with U.S. Enrichment Corp. Lacked Competition, Awarded in 2001
Contract Overview
Contract Amount: $715,967,311 ($716.0M)
Contractor: United States Enrichment Corporation
Awarding Agency: Department of Energy
Start Date: 2001-08-15
End Date: 2011-03-29
Contract Duration: 3,513 days
Daily Burn Rate: $203.8K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Other
Place of Performance
Location: PIKETON, PIKE County, OHIO, 45661
State: Ohio Government Spending
Plain-Language Summary
Department of Energy obligated $716.0 million to UNITED STATES ENRICHMENT CORPORATION for work described as: Key points: 1. Significant spending of $716 million over a decade for facilities support. 2. Lack of competition raises concerns about price discovery and value. 3. Contract awarded in 2001, ending in 2011, suggests long-term reliance. 4. Services fall under Facilities Support, a broad category with varying cost drivers.
Value Assessment
Rating: questionable
The contract's cost-plus-fixed-fee structure, combined with a lack of competition, makes a direct pricing assessment difficult. Without comparable contracts or competitive bids, it's hard to determine if the $716 million represents fair market value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was not competed, indicating a sole-source award. This significantly limits price discovery and potentially leads to higher costs for taxpayers as there was no market pressure to offer competitive pricing.
Taxpayer Impact: The absence of competition likely resulted in higher costs than a competed contract, impacting taxpayer funds negatively over the contract's duration.
Public Impact
Taxpayers funded a substantial $716 million for facilities support services. The long duration and lack of competition may have inflated costs. Oversight of a sole-source contract is critical to ensure value for money.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of Competition
- Sole-Source Award
- Cost-Plus-Fixed-Fee Structure
- Long Contract Duration
Positive Signals
- Essential Facilities Support Provided
Sector Analysis
Facilities Support Services (NAICS 561210) encompass a wide range of services for maintaining and operating buildings and infrastructure. Spending in this sector can vary greatly depending on the scale and complexity of the facilities managed.
Small Business Impact
There is no indication in the provided data whether small businesses were involved in this contract, either as prime contractors or subcontractors. Sole-source awards often limit opportunities for small business participation.
Oversight & Accountability
The sole-source nature of this contract necessitates robust oversight from the Department of Energy to ensure that costs are reasonable and that the services provided meet all requirements effectively and efficiently.
Related Government Programs
- Facilities Support Services
- Department of Energy Contracting
- Department of Energy Programs
Risk Flags
- Lack of Competition
- Sole-Source Award
- Cost-Plus-Fixed-Fee Structure
- Long Contract Duration (2001-2011)
- Potential for Inflated Costs
Tags
facilities-support-services, department-of-energy, oh, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $716.0 million to UNITED STATES ENRICHMENT CORPORATION. See the official description on USAspending.
Who is the contractor on this award?
The obligated recipient is UNITED STATES ENRICHMENT CORPORATION.
Which agency awarded this contract?
Awarding agency: Department of Energy (Department of Energy).
What is the total obligated amount?
The obligated amount is $716.0 million.
What is the period of performance?
Start: 2001-08-15. End: 2011-03-29.
What specific facilities were supported under this contract, and what was the justification for a sole-source award?
The provided data does not specify the exact facilities managed by the UNITED STATES ENRICHMENT CORPORATION. However, the justification for a sole-source award typically involves unique capabilities, urgent needs, or situations where only one source can fulfill the requirement. Without further documentation, the specific rationale remains unclear, but it's crucial for ensuring accountability and understanding the necessity of foregoing competition.
How did the cost-plus-fixed-fee structure impact the contractor's incentive to control costs given the lack of competition?
A cost-plus-fixed-fee (CPFF) contract reimburses the contractor for allowable costs plus a fixed fee representing profit. When combined with a sole-source award, this structure can reduce the contractor's incentive to control costs, as the fee is fixed regardless of cost savings. The government bears the risk of cost overruns, making oversight paramount to prevent inefficiencies and ensure value.
What was the total value of the fixed fee, and how was it determined for this contract?
The data indicates the contract type as 'COST PLUS FIXED FEE' but does not explicitly state the total value of the fixed fee or the methodology used for its determination. Typically, the fixed fee is negotiated at the outset and represents a percentage of the estimated cost or a fixed dollar amount. Understanding this fee is crucial for assessing the contractor's profit and the overall value proposition of the contract.
Industry Classification
NAICS: Administrative and Support and Waste Management and Remediation Services › Facilities Support Services › Facilities Support Services
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES
Competition & Pricing
Extent Competed: NOT COMPETED
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Contractor Details
Parent Company: Centrus Energy Corp. (UEI: 041411484)
Address: 6903 ROCKLEDGE DR, BETHESDA, MD, 20817
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $894,686,835
Exercised Options: $894,686,835
Current Obligation: $715,967,311
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Timeline
Start Date: 2001-08-15
Current End Date: 2011-03-29
Potential End Date: 2011-03-29 00:00:00
Last Modified: 2021-12-02
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