DOE's $1.08B contract for Navy nuclear reactor components awarded to BWXT Nuclear Operations Group, Inc
Contract Overview
Contract Amount: $1,077,516,584 ($1.1B)
Contractor: Bwxt Nuclear Operations Group, Inc.
Awarding Agency: Department of Energy
Start Date: 2007-03-23
End Date: 2016-12-31
Contract Duration: 3,571 days
Daily Burn Rate: $301.7K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE
Sector: Defense
Official Description: MANUFACTURE REACTOR CORES AND STEAM GENERATORS FOR THE NAVY NUCLEAR PROPULSION PROGRAM
Place of Performance
Location: LYNCHBURG, LYNCHBURG (CITY) County, VIRGINIA, 24505
State: Virginia Government Spending
Plain-Language Summary
Department of Energy obligated $1.08 billion to BWXT NUCLEAR OPERATIONS GROUP, INC. for work described as: MANUFACTURE REACTOR CORES AND STEAM GENERATORS FOR THE NAVY NUCLEAR PROPULSION PROGRAM Key points: 1. BWXT Nuclear Operations Group, Inc. is the sole provider for these specialized Navy nuclear reactor components. 2. The contract, valued at $1.08 billion, spans from 2007 to 2016. 3. This is a critical, high-risk contract due to the specialized nature of nuclear propulsion systems. 4. The sector is dominated by a few highly specialized firms, limiting competition.
Value Assessment
Rating: questionable
The contract's fixed-price incentive structure aims to control costs, but the lack of competition makes benchmarking difficult. The total award value of $1.08 billion over nine years suggests significant investment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This lack of competition likely results in higher prices than if multiple vendors were bidding.
Taxpayer Impact: Taxpayer funds are committed to a sole-source contract for a critical defense component, potentially at a premium due to the absence of competitive pricing.
Public Impact
Ensures the continued operation and maintenance of the Navy's nuclear-powered fleet. Supports national security by providing essential components for naval defense. The long-term nature of the contract highlights the sustained need for these specialized services.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits price discovery.
- High criticality of components for national security.
- Long contract duration increases long-term cost exposure.
Positive Signals
- Ensures critical defense capability.
- BWXT has specialized expertise.
Sector Analysis
This contract falls within the specialized manufacturing sector for nuclear components, a niche area with very few qualified providers. Spending benchmarks are difficult to establish due to the unique nature of naval nuclear propulsion.
Small Business Impact
This contract does not appear to involve small businesses, as it is a sole-source award to a large, specialized corporation for highly technical manufacturing.
Oversight & Accountability
The Department of Energy is responsible for this contract. Oversight would focus on ensuring BWXT meets stringent quality and safety standards for nuclear components.
Related Government Programs
- Plate Work Manufacturing
- Department of Energy Contracting
- Department of Energy Programs
Risk Flags
- Sole-source award
- Critical national security component
- High contract value
- Long contract duration
- Specialized manufacturing requirements
Tags
plate-work-manufacturing, department-of-energy, va, dca, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $1.08 billion to BWXT NUCLEAR OPERATIONS GROUP, INC.. MANUFACTURE REACTOR CORES AND STEAM GENERATORS FOR THE NAVY NUCLEAR PROPULSION PROGRAM
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 $1.08 billion.
What is the period of performance?
Start: 2007-03-23. End: 2016-12-31.
What is the justification for the sole-source award, and how is price fairness ensured without competition?
The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or the inability of other firms to meet the specialized requirements. Price fairness is often addressed through detailed cost analysis, negotiation, and potentially government-mandated profit margins. However, without competitive bids, the government has less leverage to drive down costs.
What are the specific risks associated with the long-term supply of nuclear reactor components, and how are they mitigated?
Risks include supply chain disruptions, aging workforce expertise, potential for accidents, and evolving technological requirements. Mitigation strategies involve robust quality assurance, knowledge transfer programs, stringent safety protocols, and contingency planning for supply chain vulnerabilities. Continuous government oversight is crucial.
How does the fixed-price incentive structure effectively manage costs for such a specialized and long-term project?
The fixed-price incentive (FPI) contract aims to share cost risks and rewards between the government and the contractor. It sets a target cost and target profit, with a ceiling price. If costs are below target, both parties share savings; if above, both share the overrun up to the ceiling. This incentivizes the contractor to control costs while ensuring the government is protected by the price ceiling.
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: NEGOTIATED PROPOSAL/QUOTE
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: $1,077,516,584
Exercised Options: $1,077,516,584
Current Obligation: $1,077,516,584
Contract Characteristics
Cost or Pricing Data: YES
Timeline
Start Date: 2007-03-23
Current End Date: 2016-12-31
Potential End Date: 2016-12-31 00:00:00
Last Modified: 2014-07-09
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