DOE awards $140M for Nuclear Reactor Core to BWXT Nuclear Operations Group, Inc
Contract Overview
Contract Amount: $140,354,909 ($140.4M)
Contractor: Bwxt Nuclear Operations Group, Inc.
Awarding Agency: Department of Energy
Start Date: 2004-10-20
End Date: 2010-09-15
Contract Duration: 2,156 days
Daily Burn Rate: $65.1K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE
Sector: Other
Official Description: NUCLEAR REACTOR CORE
Place of Performance
Location: LYNCHBURG, LYNCHBURG (CITY) County, VIRGINIA, 24505
State: Virginia Government Spending
Plain-Language Summary
Department of Energy obligated $140.4 million to BWXT NUCLEAR OPERATIONS GROUP, INC. for work described as: NUCLEAR REACTOR CORE Key points: 1. The contract value is substantial at $140.35 million. 2. BWXT Nuclear Operations Group, Inc. is the sole awardee. 3. The contract was not competed, raising potential value concerns. 4. The sector is related to nuclear energy and manufacturing.
Value Assessment
Rating: questionable
The contract was not competed, making it difficult to assess pricing against market benchmarks. The fixed-price incentive structure aims to control costs, but without competition, the baseline price is unverified.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was awarded sole-source, indicating a lack of competition. This method may limit price discovery and potentially lead to higher costs for taxpayers.
Taxpayer Impact: The absence of competition for a large contract like this raises concerns about whether the government achieved the best possible price.
Public Impact
Taxpayers may have paid a premium due to the lack of competitive bidding. The long duration (2004-2010) suggests a critical, long-term need for the nuclear reactor core. The specific nature of nuclear reactor components implies a highly specialized manufacturing requirement.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Long contract duration
Positive Signals
- Fixed-price incentive contract type
Sector Analysis
This contract falls within the defense industrial base, specifically related to nuclear energy and specialized manufacturing. Spending in this sector can be high due to the complexity and criticality of the products.
Small Business Impact
There is no indication of small business participation in this award, which is common for highly specialized sole-source contracts.
Oversight & Accountability
The sole-source nature of this award warrants scrutiny to ensure the Department of Energy adequately justified the lack of competition and negotiated a fair price.
Related Government Programs
- Plate Work Manufacturing
- Department of Energy Contracting
- Department of Energy Programs
Risk Flags
- Sole-source award
- Lack of competition
- Potential for overpayment
- Long contract duration
- No indication of small business participation
Tags
plate-work-manufacturing, department-of-energy, va, dca, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $140.4 million to BWXT NUCLEAR OPERATIONS GROUP, INC.. NUCLEAR REACTOR CORE
Who is the contractor on this award?
The obligated recipient is BWXT NUCLEAR OPERATIONS GROUP, INC..
Which agency awarded this contract?
Awarding agency: Department of Energy (Department of Energy).
What is the total obligated amount?
The obligated amount is $140.4 million.
What is the period of performance?
Start: 2004-10-20. End: 2010-09-15.
What was the justification for awarding this contract sole-source?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or a critical need that only one contractor can fulfill. For nuclear reactor components, specialized knowledge, existing infrastructure, and security clearances are often cited reasons. A thorough review would examine if these conditions truly precluded competition or if alternative approaches could have been explored.
What is the potential risk associated with a sole-source contract of this magnitude?
The primary risk of a sole-source contract, especially for a large value like $140 million, is the potential for overpayment due to the absence of competitive pressure. Without competing bids, the government may not achieve the lowest possible price. Additionally, it can stifle innovation from other potential suppliers and create vendor lock-in.
How effective was the fixed-price incentive structure in managing costs for this contract?
The effectiveness of the fixed-price incentive (FPI) structure depends on the clarity of the target cost, the incentive sharing ratio, and the government's ability to monitor performance. While FPI aims to align contractor and government interests in cost control, its success is amplified by a competitive baseline. Without competition, the initial target cost might have been less aggressive, potentially limiting the cost-saving benefits.
Industry Classification
NAICS: Manufacturing › Architectural and Structural Metals Manufacturing › Plate Work Manufacturing
Product/Service Code: FURNACE/STEAM/DRYING; NUCL REACTOR
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE (L)
Evaluated Preference: NONE
Contractor Details
Parent Company: BWX Technologies, Inc. (UEI: 968037221)
Address: 2016 MOUNT ATHOS RD, LYNCHBURG, VA, 05
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $140,354,909
Exercised Options: $140,354,909
Current Obligation: $140,354,909
Contract Characteristics
Cost or Pricing Data: YES
Timeline
Start Date: 2004-10-20
Current End Date: 2010-09-15
Potential End Date: 2010-09-15 00:00:00
Last Modified: 2014-06-23
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