DOE's $5B Oak Ridge Contract for Facilities Management Awarded to Bechtel Jacobs Company LLC
Contract Overview
Contract Amount: $4,986,459,312 ($5.0B)
Contractor: Bechtel Jacobs Company LLC
Awarding Agency: Department of Energy
Start Date: 1999-10-15
End Date: 2011-07-31
Contract Duration: 4,307 days
Daily Burn Rate: $1.2M/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 5
Pricing Type: COST PLUS FIXED FEE
Sector: Other
Official Description: OAK RIDGE ENVIRONMENTAL FACILITIES MANAGEMENT AND INTEGRATION CONTRACT
Place of Performance
Location: OAK RIDGE, ANDERSON County, TENNESSEE, 37830
Plain-Language Summary
Department of Energy obligated $4.99 billion to BECHTEL JACOBS COMPANY LLC for work described as: OAK RIDGE ENVIRONMENTAL FACILITIES MANAGEMENT AND INTEGRATION CONTRACT Key points: 1. The contract represents a significant investment in maintaining and integrating facilities at a major national laboratory. 2. Competition dynamics for this large-scale, long-term contract are crucial for ensuring taxpayer value. 3. Performance over the contract's duration will be a key indicator of contractor effectiveness and cost control. 4. The sector for facilities support services is competitive, but specialized contracts like this may see fewer bidders. 5. The contract's cost-plus-fixed-fee structure requires careful oversight to manage costs and prevent overruns.
Value Assessment
Rating: fair
Benchmarking the value of this contract is challenging due to its specific nature and long duration. The cost-plus-fixed-fee (CPFF) structure, while common for complex projects, can lead to higher costs if not managed diligently. Without direct comparisons to similar-sized, long-term facilities management contracts at other national labs, assessing the precise value-for-money is difficult. The total obligated amount of over $4.9 billion over its life suggests a substantial scope of work.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that multiple bidders were likely considered. The presence of 5 bidders suggests a reasonable level of competition for this significant contract. However, the long-term nature and specialized requirements of managing facilities at a national laboratory may limit the pool of truly qualified and competitive bidders.
Taxpayer Impact: Full and open competition generally benefits taxpayers by encouraging lower bids and promoting efficiency. For this contract, it suggests that the Department of Energy sought the best possible offer from a range of capable companies.
Public Impact
The primary beneficiaries are the Department of Energy and the Oak Ridge National Laboratory, ensuring operational continuity and facility upkeep. Services delivered include comprehensive facilities management, maintenance, repair, and integration of complex systems. The geographic impact is concentrated in Oak Ridge, Tennessee, supporting a critical national research and development hub. Workforce implications include employment for a significant number of personnel in skilled trades, engineering, and management roles.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost-plus-fixed-fee contracts can incentivize higher spending if not rigorously monitored.
- Long contract durations may reduce flexibility to adapt to changing technological needs or market conditions.
- The scale of the contract could present significant management challenges for the contractor.
Positive Signals
- Awarded under full and open competition, suggesting a competitive bidding process.
- The contractor, Bechtel Jacobs Company LLC, likely possesses significant experience in large-scale facility management.
- The contract duration of over 10 years indicates a stable, long-term commitment to facility operations.
Sector Analysis
Facilities Support Services (NAICS 561210) is a broad sector encompassing a wide range of services for maintaining and operating buildings and grounds. This contract falls into the high-end, specialized segment of this market, focusing on the complex infrastructure of a national laboratory. Comparable spending benchmarks are difficult to establish due to the unique nature of national lab operations, but large government contracts in this space can run into billions of dollars over their lifecycles.
Small Business Impact
This contract was not set aside for small businesses, and there is no explicit indication of subcontracting requirements for small businesses in the provided data. The large scale and specialized nature of the work may make it less suitable for direct small business awards, though they could potentially participate as subcontractors to the prime contractor.
Oversight & Accountability
Oversight for this contract would primarily fall under the Department of Energy's contracting and program management offices. The Inspector General's office would also have jurisdiction to investigate fraud, waste, and abuse. Transparency would be facilitated through contract award notices and potentially through public reporting on performance metrics, though specific details are not provided.
Related Government Programs
- Oak Ridge National Laboratory Operations
- Department of Energy Facilities Management
- National Laboratory Support Services
- Government Facilities Maintenance Contracts
Risk Flags
- Cost Overrun Potential (CPFF structure)
- Long-Term Performance Monitoring
- Scope Creep Risk
- Contractor Capability Assessment
Tags
facilities-management, department-of-energy, oak-ridge, tennessee, definitive-contract, cost-plus-fixed-fee, full-and-open-competition, large-contract, national-laboratory, facilities-support-services
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $4.99 billion to BECHTEL JACOBS COMPANY LLC. OAK RIDGE ENVIRONMENTAL FACILITIES MANAGEMENT AND INTEGRATION CONTRACT
Who is the contractor on this award?
The obligated recipient is BECHTEL JACOBS COMPANY LLC.
Which agency awarded this contract?
Awarding agency: Department of Energy (Department of Energy).
What is the total obligated amount?
The obligated amount is $4.99 billion.
What is the period of performance?
Start: 1999-10-15. End: 2011-07-31.
What was the specific performance history of Bechtel Jacobs Company LLC on this contract?
The provided data indicates the contract was awarded in October 1999 and ended in July 2011, spanning over a decade. While the total obligated amount reached approximately $4.99 billion, specific performance metrics, such as on-time delivery, quality of services, or adherence to budget targets, are not detailed in the summary data. A thorough review would require examining performance reports, award fee determinations, and any documented issues or successes during the contract's lifecycle. Given the CPFF structure, monitoring cost efficiency and effective resource allocation would have been paramount for assessing performance.
How does the total contract value compare to similar facilities management contracts at other national laboratories?
Direct comparisons are challenging due to the unique scope and duration of national laboratory operations. However, contracts for managing large federal facilities, especially those involving research and development infrastructure, are typically multi-billion dollar endeavors over many years. For instance, other Department of Energy sites or facilities managed by the Department of Defense often have similar large-scale, long-term support contracts. The $4.99 billion figure over approximately 12 years (from award to end date) suggests a significant but potentially commensurate investment for maintaining and integrating complex scientific and operational infrastructure at a major national lab like Oak Ridge.
What were the primary risks associated with this large, long-term facilities management contract?
Key risks included cost overruns inherent in the Cost Plus Fixed Fee (CPFF) structure, especially given the complexity and potential for unforeseen issues in managing large facilities. Schedule delays could impact research operations. Performance risks involved ensuring consistent quality of maintenance and support services across diverse facilities. Contractor performance degradation over a long tenure was also a risk, as was the potential for technological obsolescence if facilities were not adequately modernized. Ensuring robust safety and environmental compliance in a high-hazard research environment presented significant risks as well.
How effective was the competition in driving down costs for this contract?
The contract was awarded under 'full and open competition' with five bidders, suggesting a competitive process. While competition generally drives down costs, the CPFF structure can mitigate some of that effect by allowing costs to be reimbursed. The effectiveness of competition here would be more about selecting the most capable and efficient provider at a fair price, rather than solely achieving the lowest bid price. The fixed fee component provides some incentive for the contractor to manage costs efficiently to maximize profit, but the primary cost control would rely on the government's oversight of allowable costs.
What is the historical spending trend for facilities management at Oak Ridge National Laboratory?
The provided data focuses on a single, large contract from 1999 to 2011. To understand historical spending trends, one would need to examine contracts preceding and succeeding this period, as well as potentially other smaller contracts related to facilities operations. This $4.99 billion contract represents a substantial portion of spending during its tenure. Analyzing trends would involve looking at the total annual spending on facilities management at ORNL over time, identifying any significant increases or decreases, and understanding the drivers behind those changes, such as new construction, major upgrades, or shifts in operational scope.
Industry Classification
NAICS: Administrative and Support and Waste Management and Remediation Services › Facilities Support Services › Facilities Support Services
Product/Service Code: NATURAL RESOURCES MANAGEMENT › ENVIRONMENTAL SYSTEMS PROTECTION
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 5
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Bechtel Group, Inc. (UEI: 094878980)
Address: EAST TENNESSEE TECHNOLOGY PARK-HWY, OAK RIDGE, TN, 37831
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $6,200,000,000
Exercised Options: $6,200,000,000
Current Obligation: $4,986,459,312
Actual Outlays: $34,966
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Timeline
Start Date: 1999-10-15
Current End Date: 2011-07-31
Potential End Date: 2011-09-30 00:00:00
Last Modified: 2018-10-12
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