DOE's $25M contract for strategic metal alloys awarded to General Nuclear Corp. over 13 years
Contract Overview
Contract Amount: $24,964,011 ($25.0M)
Contractor: General Nuclear Corp
Awarding Agency: Department of Energy
Start Date: 2007-03-06
End Date: 2020-05-29
Contract Duration: 4,833 days
Daily Burn Rate: $5.2K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: PROCUREMENT AND STORAGE OF STRATEGIC QUANTITIES OF ZIRCALOY, NICKEL ALLOY, AND TITANIUM INGOTS, PLATES, AND BILLETS
Place of Performance
Location: NEW STANTON, WESTMORELAND County, PENNSYLVANIA, 15672
Plain-Language Summary
Department of Energy obligated $25.0 million to GENERAL NUCLEAR CORP for work described as: PROCUREMENT AND STORAGE OF STRATEGIC QUANTITIES OF ZIRCALOY, NICKEL ALLOY, AND TITANIUM INGOTS, PLATES, AND BILLETS Key points: 1. Contract value represents a significant investment in strategic materials for national security. 2. Long duration suggests a sustained need for these specialized alloys. 3. The procurement method indicates a deliberate decision to limit initial competition. 4. Fixed-price contract type aims to control costs, but market volatility for raw materials could pose risks. 5. Performance period spans over a decade, requiring robust oversight. 6. The specific alloys procured are critical for nuclear applications, highlighting a specialized market.
Value Assessment
Rating: fair
Benchmarking the value of this contract is challenging due to the specialized nature of the materials and the long duration. The raw dollar amount of $24.96 million over 13 years averages to approximately $1.92 million annually. Without specific details on the quantities and grades of Zircaloy, nickel alloy, and titanium, a direct comparison to similar contracts or market rates for these specific forms (ingots, plates, billets) is difficult. The firm fixed-price structure suggests an attempt to lock in costs, but the long lead time could expose the government to price fluctuations if not managed carefully.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' which implies that while competition was sought, certain sources were initially excluded. This suggests a potential limitation on the number of bidders compared to a truly full and open competition. The rationale for excluding sources would be critical to understanding the competitive landscape and its potential impact on pricing and innovation. Without further details on the exclusion criteria, it's difficult to definitively assess the breadth of competition.
Taxpayer Impact: The limited competition may have resulted in less aggressive pricing than a broader solicitation could have achieved. Taxpayers may have paid a premium if the excluded sources could have offered more competitive terms.
Public Impact
The primary beneficiaries are likely entities within the Department of Energy and potentially other government agencies requiring specialized alloys for nuclear programs or strategic reserves. The services delivered include the procurement and storage of critical raw materials essential for national defense and energy security. The geographic impact is primarily national, focusing on the strategic storage and utilization of these materials. Workforce implications are likely concentrated within the contractor's specialized manufacturing and logistics operations, as well as within the government agencies managing these strategic assets.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Long contract duration increases risk of material obsolescence or price volatility.
- Limited competition raises concerns about optimal price discovery and potential for inflated costs.
- Specialized nature of materials may limit the pool of qualified suppliers, impacting future competition.
- Reliance on a single awardee for critical strategic materials could pose supply chain risks.
Positive Signals
- Firm fixed-price contract provides cost certainty for the government.
- Long-term award suggests a stable and predictable supply chain for critical materials.
- The contractor's ability to fulfill this long-term, specialized requirement indicates a strong capability.
Sector Analysis
This contract falls within the broader industrial sector of metal manufacturing and strategic materials procurement. The market for specialized alloys like Zircaloy, nickel alloys, and titanium is relatively niche, driven by demand from aerospace, defense, and energy sectors, particularly nuclear power. The size of this specific market segment is difficult to quantify without more granular data, but it represents a critical component of national industrial security. Comparable spending benchmarks would likely be found in other government procurements for strategic defense materials or specialized industrial components.
Small Business Impact
The data indicates that small business participation was not a primary focus for this contract, as the 'small business' flag is false. There is no explicit mention of small business set-asides or subcontracting goals. This suggests that the procurement likely targeted large, specialized manufacturers capable of producing these specific alloys. Consequently, the direct impact on the small business ecosystem for this particular contract appears minimal, though the prime contractor may engage small businesses for ancillary services.
Oversight & Accountability
Oversight for this contract would primarily fall under the Department of Energy's contracting and program management offices. Accountability measures would be tied to the delivery of specified materials according to contract terms, quality standards, and delivery schedules. Transparency is facilitated through contract databases, but detailed operational oversight information is typically internal. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.
Related Government Programs
- Strategic Petroleum Reserve
- National Defense Stockpile
- Department of Energy - Nuclear Materials Management
- Advanced Materials Research Programs
Risk Flags
- Long contract duration may increase risk of price volatility and obsolescence.
- Limited competition raises concerns about optimal value for taxpayer dollars.
- Specialized materials may have limited supplier base, impacting future sourcing.
- Contract awarded after exclusion of sources requires justification for limited competition.
Tags
department-of-energy, strategic-materials, zircaloy, nickel-alloy, titanium, ingots, plates, billets, machine-shops, firm-fixed-price, limited-competition, long-term-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $25.0 million to GENERAL NUCLEAR CORP. PROCUREMENT AND STORAGE OF STRATEGIC QUANTITIES OF ZIRCALOY, NICKEL ALLOY, AND TITANIUM INGOTS, PLATES, AND BILLETS
Who is the contractor on this award?
The obligated recipient is GENERAL NUCLEAR CORP.
Which agency awarded this contract?
Awarding agency: Department of Energy (Department of Energy).
What is the total obligated amount?
The obligated amount is $25.0 million.
What is the period of performance?
Start: 2007-03-06. End: 2020-05-29.
What specific grades and quantities of Zircaloy, nickel alloy, and titanium were procured under this contract?
The provided data does not specify the exact grades or quantities of Zircaloy, nickel alloy, and titanium ingots, plates, and billets procured. This level of detail is typically found in the contract's statement of work or technical specifications, which are not included in the summary data. Understanding these specifics is crucial for accurately assessing the contract's value, comparing it to market rates, and evaluating its strategic importance. Different grades and forms of these metals can have vastly different properties, applications, and costs.
What was the rationale for excluding certain sources in the competition process?
The rationale for excluding certain sources under the 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' (FOUC-ES) award type is not detailed in the provided data. Typically, such exclusions are based on specific technical requirements, security clearances, or prior performance issues that limit the pool of eligible contractors. Without knowing the criteria used for exclusion, it is difficult to assess whether the competition was appropriately limited to qualified entities or if it unduly restricted market access, potentially impacting price and innovation. Further investigation into the justification for source exclusion would be necessary.
How does the $24.96 million contract value compare to historical spending on similar strategic materials by the DOE?
Comparing this $24.96 million contract to historical spending requires access to broader historical procurement data for similar strategic materials. The provided data only covers this single contract. However, given the 13-year duration (2007-2020), the average annual spend is approximately $1.92 million. This figure needs to be contextualized against the fluctuating market prices of these specialized alloys and the strategic needs of the Department of Energy over that period. Without comparative data on other contracts for Zircaloy, nickel alloys, and titanium, it's challenging to determine if this represents a high, low, or average level of investment.
What are the key performance indicators (KPIs) and quality assurance measures for this contract?
The provided data does not explicitly list the Key Performance Indicators (KPIs) or quality assurance measures for this contract. However, for a contract involving strategic materials like Zircaloy, nickel alloy, and titanium, KPIs would likely focus on material specifications adherence (e.g., chemical composition, mechanical properties), on-time delivery of ingots, plates, and billets, and potentially inventory management if storage is included. Quality assurance would involve rigorous testing and certification of materials to meet stringent industry and government standards, particularly given the potential nuclear applications.
What is the track record of General Nuclear Corp. in fulfilling large, long-term government contracts for specialized materials?
The provided data identifies 'GENERAL NUCLEAR CORP' as the contractor but does not offer details on their track record, past performance, or experience with similar large, long-term government contracts for specialized materials. To assess their reliability and capability for this $24.96 million, 13-year contract, one would need to consult contractor performance databases (like CPARS), review past awards, and examine their financial stability and technical expertise in producing Zircaloy, nickel alloy, and titanium. Without this information, the assessment of risk associated with the contractor is incomplete.
What are the potential risks associated with the long duration (13 years) of this contract?
The 13-year duration of this contract presents several potential risks. Firstly, market prices for raw materials like titanium and nickel alloys can be volatile over such a long period, potentially leading to cost overruns if the firm fixed-price structure does not adequately account for inflation or supply chain disruptions. Secondly, technological advancements could render the specified materials or their applications obsolete before the contract ends. Thirdly, maintaining consistent quality and performance from the contractor over more than a decade requires sustained oversight. Finally, the long commitment ties up significant government funds that could potentially be reallocated if strategic priorities shift.
Industry Classification
NAICS: Manufacturing › Machine Shops; Turned Product; and Screw, Nut, and Bolt Manufacturing › Machine Shops
Product/Service Code: METALWORKING MACHINERY
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Solicitation Procedures: SEALED BID
Solicitation ID: DE-IB11-07PN38001
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: SHADY CREEK RD, NEW STANTON, PA, 15672
Business Categories: Category Business, Small Business
Financial Breakdown
Contract Ceiling: $25,009,594
Exercised Options: $24,964,721
Current Obligation: $24,964,011
Actual Outlays: $6,040
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2007-03-06
Current End Date: 2020-05-29
Potential End Date: 2020-05-29 00:00:00
Last Modified: 2020-03-26
Other Department of Energy Contracts
- Federal Contract — $48.1B (Lockheed Martin Corp)
- ,Ct::igf Contract Award De-Na0003525 to the National Technology&engineering Solutions of Sandia, LLC (ntess) for the Management and Operation of the Department of Energy, National Nuclear Security Administration's Sandia National Laboratories (SNL) — $41.7B (National Technology & Engineering Solutions of Sandia, LLC)
- Management and Operation of the OAK Ridge National Laboratory — $40.8B (Ut-Battelle LLC)
- TAS::89 0240::TAS This Performance-Based Management Contract (pbmc) IS for the Management and Operation of the Lawrence Livermore National Laboratory (llnl). the Contractor Shall, in Accordance With the Provisions of This Contract, Accomplish the Missions and Programs Assigned by the U.S. Department of Energy (DOE) and Manage and Operate the Laboratory. the Laboratory IS ONE of Does Office of Defense Program Multi-Program Laboratories. the Laboratory IS a Federally Funded Research and Development Institution (established in Accordance With the Federal Acquisition Regulation (FAR) Part 35 and Operated Under This Management and Operating (M&O) Contract, AS Defined in FAR 17.6 and Dear 917.6 — $40.8B (Lawrence Livermore National Security, LLC)
- M&O of Lanl BR of U of CA — $35.3B (Regents of the University of California, the)