DOE's $12.9B SRS Management Contract Awarded to Washington Savannah River Company LLC
Contract Overview
Contract Amount: $12,893,899,447 ($12.9B)
Contractor: Washington Savannah River Company LLC
Awarding Agency: Department of Energy
Start Date: 1999-10-15
End Date: 2017-12-07
Contract Duration: 6,628 days
Daily Burn Rate: $1.9M/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: COST PLUS AWARD FEE
Sector: Other
Official Description: INTEGRATED TEAM MANAGEMENT AND OPERATION OF SRS
Place of Performance
Location: AIKEN, AIKEN County, SOUTH CAROLINA, 29808
Plain-Language Summary
Department of Energy obligated $12.89 billion to WASHINGTON SAVANNAH RIVER COMPANY LLC for work described as: INTEGRATED TEAM MANAGEMENT AND OPERATION OF SRS Key points: 1. Contract represents significant long-term investment in facilities support services. 2. Awarded via full and open competition, suggesting broad market engagement. 3. Cost-plus award fee structure incentivizes performance but requires careful oversight. 4. Long contract duration (over 18 years) implies stable, ongoing operational needs. 5. High dollar value indicates critical national importance of the Savannah River Site. 6. Focus on integrated team management suggests complex operational requirements.
Value Assessment
Rating: fair
The contract's value of over $12.9 billion over its 18-year duration indicates a substantial investment. Benchmarking this specific contract is challenging due to its unique scope and long history. However, cost-plus award fee contracts, while allowing for flexibility and performance incentives, can lead to higher overall costs if not managed rigorously. The significant duration suggests a stable, albeit potentially escalating, cost base for managing the Savannah River Site.
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. This approach is generally favorable for price discovery and ensuring the government receives competitive offers. The fact that it was competed suggests a robust market for these types of large-scale facilities management services.
Taxpayer Impact: Full and open competition typically benefits taxpayers by driving down prices through market forces and encouraging a wider pool of potential contractors to bid, leading to potentially better value.
Public Impact
The Department of Energy benefits from the integrated management and operation of the Savannah River Site. Services delivered include essential support for national security and environmental management missions. The geographic impact is concentrated in South Carolina, where the site is located. Workforce implications include employment for a large number of personnel at the site.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost-plus award fee contracts can lead to cost overruns if not closely monitored.
- The long duration of the contract may limit opportunities for newer, potentially more innovative contractors.
- Assessing true value-for-money over such an extended period requires continuous performance evaluation.
Positive Signals
- Awarded through full and open competition, indicating a competitive process.
- The integrated team management approach suggests a comprehensive and potentially efficient operational model.
- The contract's longevity points to a successful, ongoing relationship meeting critical national needs.
Sector Analysis
This contract falls within the Facilities Support Services sector, a critical component of government operations. The market for such services is substantial, encompassing a wide range of activities from maintenance and security to specialized site management. The Department of Energy's significant investment reflects the unique and vital nature of the Savannah River Site, which hosts complex national security and environmental programs. Comparable spending benchmarks are difficult to establish due to the site's specific mission and scale.
Small Business Impact
The provided data indicates that small business participation (sb: false) was not a specific set-aside criterion for this contract. While the prime contractor is Washington Savannah River Company LLC, the extent of small business subcontracting is not detailed here. Large prime contracts of this nature often involve significant subcontracting opportunities, but without specific set-aside goals or reporting, the direct impact on the small business ecosystem is unclear.
Oversight & Accountability
Oversight for this contract would primarily reside with the Department of Energy, likely through contracting officers and program managers responsible for the Savannah River Site. The cost-plus award fee structure necessitates robust performance monitoring and financial auditing to ensure accountability and prevent cost overruns. Transparency would depend on DOE's reporting practices regarding contract performance and expenditures.
Related Government Programs
- Department of Energy Site Management Contracts
- Federal Facilities Support Services
- National Nuclear Security Administration Operations
- Environmental Management Contracts
Risk Flags
- Long contract duration may reduce flexibility and opportunities for innovation.
- Cost-plus award fee structure requires rigorous oversight to control costs.
- Potential for performance degradation over extended contract period.
- Transition risks associated with contract end and potential re-competition.
Tags
department-of-energy, facilities-support-services, south-carolina, definitive-contract, large-contract, full-and-open-competition, cost-plus-award-fee, integrated-team-management, national-security, environmental-management
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $12.89 billion to WASHINGTON SAVANNAH RIVER COMPANY LLC. INTEGRATED TEAM MANAGEMENT AND OPERATION OF SRS
Who is the contractor on this award?
The obligated recipient is WASHINGTON SAVANNAH RIVER 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 $12.89 billion.
What is the period of performance?
Start: 1999-10-15. End: 2017-12-07.
What is the historical spending trend for this contract and how does it compare to initial projections?
The provided data reflects the total award value of $12,893,899,446.60 for the contract period from October 15, 1999, to December 7, 2017, spanning approximately 6,628 days. Without historical quarterly or annual spending reports, a detailed trend analysis is not possible. However, the total value suggests consistent and significant annual expenditures. Comparing this to initial projections would require access to the original contract solicitation and award documents, which are not provided. Generally, cost-plus award fee contracts can see spending fluctuate based on performance and incurred costs, making direct comparison to fixed-price projections challenging.
How does the contractor's performance track record on this contract influence the award fees?
The contract type is 'COST PLUS AWARD FEE' (pt: 'COST PLUS AWARD FEE'), which explicitly links contractor performance to financial incentives. The 'award fee' component means that Washington Savannah River Company LLC could earn additional profit above their base cost reimbursement based on meeting or exceeding specific performance criteria established by the Department of Energy. These criteria typically cover areas such as safety, environmental compliance, operational efficiency, and project management. The government would periodically evaluate the contractor's performance against these metrics and determine the amount of award fee earned. A strong track record in these areas would maximize the award fee, while subpar performance could result in reduced or zero award fees.
What are the key risks associated with managing a large, long-term facilities support contract like this?
Key risks include potential cost overruns due to the cost-plus nature of the contract, especially if unforeseen technical challenges or scope creep occur. Contractor performance degradation over the long duration is another risk, potentially impacting critical site operations. National security or environmental incidents at the site could lead to significant financial and reputational damage. Furthermore, changes in government policy, budget priorities, or technological advancements could necessitate contract modifications or create inefficiencies. Ensuring consistent adherence to stringent safety and security protocols over nearly two decades is also a paramount concern.
Can the value of this contract be benchmarked against similar facilities management contracts at other federal sites?
Benchmarking this contract is challenging due to the unique scale and mission of the Savannah River Site. Facilities support contracts vary widely based on the type of facility (e.g., laboratory, manufacturing, administrative), the specific services required (e.g., security, maintenance, waste management, IT), geographic location, and contract type. While other large federal sites have extensive support contracts, the specific combination of national security, nuclear materials management, and environmental remediation at SRS makes direct comparisons difficult. The 'full and open competition' aspect suggests the government sought competitive pricing, but the specialized nature of the work likely limited the pool of truly comparable bidders.
What are the implications of the contract's end date (2017) for ongoing operations at the Savannah River Site?
The contract's end date of December 7, 2017, signifies that this specific award has concluded. Operations at the Savannah River Site are critical and ongoing, meaning that subsequent contracts or contract modifications would have been necessary to ensure continuity of service. The transition from one contract to another, especially for such a large and complex operation, carries inherent risks related to knowledge transfer, potential disruptions in service, and the need for the new contractor to ramp up effectively. Understanding what followed this contract is crucial for assessing the long-term operational stability and cost-effectiveness of managing the site.
Industry Classification
NAICS: Administrative and Support and Waste Management and Remediation Services › Facilities Support Services › Facilities Support Services
Product/Service Code: OPERATION OF GOVT OWNED FACILITY › OPERATE GOVT OWNED BUILDINGS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Offers Received: 1
Pricing Type: COST PLUS AWARD FEE (R)
Contractor Details
Parent Company: AECOM (UEI: 153561212)
Address: SAVANNAH RIVER SITE RD 1, AIKEN, SC, 29808
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $3,180,779,786
Exercised Options: $10,964,239,540
Current Obligation: $12,893,899,447
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Timeline
Start Date: 1999-10-15
Current End Date: 2017-12-07
Potential End Date: 2017-12-07 00:00:00
Last Modified: 2017-11-07
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