DOE awards $1.65B for Naval Nuclear Reactor Cores to BWXT Nuclear Operations Group
Contract Overview
Contract Amount: $165,334,314 ($165.3M)
Contractor: Bwxt Nuclear Operations Group, Inc.
Awarding Agency: Department of Energy
Start Date: 2004-10-19
End Date: 2012-02-28
Contract Duration: 2,688 days
Daily Burn Rate: $61.5K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE
Sector: Defense
Official Description: NAVAL NUCLEAR REACTOR CORE
Place of Performance
Location: LYNCHBURG, LYNCHBURG (CITY) County, VIRGINIA, 24505
State: Virginia Government Spending
Plain-Language Summary
Department of Energy obligated $165.3 million to BWXT NUCLEAR OPERATIONS GROUP, INC. for work described as: NAVAL NUCLEAR REACTOR CORE Key points: 1. Significant investment in a critical defense component. 2. BWXT Nuclear Operations Group holds a dominant position in this specialized market. 3. High risk associated with nuclear technology and long-term contracts. 4. Manufacturing sector with specialized capabilities.
Value Assessment
Rating: questionable
The contract value of $1.65 billion over 8 years is substantial. Without comparable contracts or detailed cost breakdowns, assessing its value relative to market benchmarks is difficult. The fixed-price incentive structure suggests an attempt to control costs, but the lack of competition raises concerns.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers. The justification for sole-source likely stems from the highly specialized nature of nuclear reactor cores and BWXT's unique capabilities.
Taxpayer Impact: The lack of competition in awarding a $1.65 billion contract raises concerns about potential overspending and reduced value for taxpayer funds.
Public Impact
Ensures continued operation and maintenance of critical naval nuclear propulsion systems. Supports national security by providing essential components for the U.S. Navy's fleet. Potential for long-term economic impact on the specialized manufacturing workforce.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition and price discovery.
- High-risk technology (nuclear) requires stringent oversight.
- Long contract duration increases exposure to cost overruns.
- Lack of transparency in pricing due to non-competitive award.
Positive Signals
- Critical national security component.
- Long-standing relationship with a specialized provider.
- Fixed-price incentive contract aims for cost control.
Sector Analysis
This contract falls within the specialized manufacturing sector, specifically related to defense and energy infrastructure. Spending benchmarks for nuclear reactor components are difficult to establish due to the niche market and high barriers to entry.
Small Business Impact
There is no indication of small business participation in this contract. The nature of manufacturing nuclear reactor cores requires highly specialized facilities and expertise typically found in large, established corporations.
Oversight & Accountability
The Department of Energy is responsible for oversight. Given the critical nature and sole-source award, robust oversight mechanisms are essential to ensure performance, safety, and cost control. Transparency in reporting and regular audits would be crucial.
Related Government Programs
- Plate Work Manufacturing
- Department of Energy Contracting
- Department of Energy Programs
Risk Flags
- Sole-source award
- High-risk technology (nuclear)
- Long contract duration
- Lack of transparency in pricing
- Potential for cost overruns
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 $165.3 million to BWXT NUCLEAR OPERATIONS GROUP, INC.. NAVAL 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 $165.3 million.
What is the period of performance?
Start: 2004-10-19. End: 2012-02-28.
What specific technical capabilities does BWXT possess that justify a sole-source award for naval nuclear reactor cores, and have these been independently verified?
The justification for a sole-source award typically rests on unique technical expertise, proprietary technology, or specialized facilities that no other entity possesses. For naval nuclear reactor cores, this likely involves extensive experience with nuclear materials, stringent safety protocols, and specific design knowledge critical to naval applications. Independent verification would involve a thorough review by government technical experts to confirm the exclusivity and necessity of these capabilities.
How does the Department of Energy ensure cost-effectiveness and prevent potential overruns in a sole-source, fixed-price incentive contract for such a high-risk technology?
In sole-source contracts, cost-effectiveness is primarily managed through robust negotiation, detailed cost analysis of the contractor's proposed budget, and strong oversight. The fixed-price incentive (FPI) structure aims to incentivize the contractor to meet or beat cost targets by sharing savings, while also capping the government's liability. Regular performance reviews, audits, and milestone tracking are critical to identifying potential issues early and managing risks associated with nuclear technology.
What are the long-term implications for national security and technological advancement if competition is consistently avoided in this critical sector?
Consistently avoiding competition in critical sectors like naval nuclear reactor cores can stifle innovation and lead to complacency among incumbent contractors. It may also result in higher long-term costs for taxpayers and potentially limit the government's options if the sole provider faces issues. While ensuring continuity is important, periodic market research and exploring pathways for future competition, even if limited, are vital for maintaining technological edge and cost efficiency.
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
Solicitation ID: DE-RP11-04PN38004
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: $165,334,314
Exercised Options: $165,334,314
Current Obligation: $165,334,314
Contract Characteristics
Cost or Pricing Data: YES
Timeline
Start Date: 2004-10-19
Current End Date: 2012-02-28
Potential End Date: 2012-02-28 00:00:00
Last Modified: 2014-06-23
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