DOE's $322M Reactor Core Contract with BWXT Nuclear Operations Group Faces Scrutiny for Lack of Competition
Contract Overview
Contract Amount: $322,130,294 ($322.1M)
Contractor: Bwxt Nuclear Operations Group, Inc.
Awarding Agency: Department of Energy
Start Date: 2000-01-15
End Date: 2012-12-31
Contract Duration: 4,734 days
Daily Burn Rate: $68.0K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE
Sector: Other
Official Description: REACTOR CORES
Place of Performance
Location: LYNCHBURG, LYNCHBURG (CITY) County, VIRGINIA, 24505
State: Virginia Government Spending
Plain-Language Summary
Department of Energy obligated $322.1 million to BWXT NUCLEAR OPERATIONS GROUP, INC. for work described as: REACTOR CORES Key points: 1. Significant contract value of $322 million awarded to a single vendor. 2. BWXT Nuclear Operations Group, Inc. holds a dominant position in this specialized sector. 3. The 'NOT COMPETED' status raises concerns about potential overpricing and limited innovation. 4. The sector involves highly specialized plate work manufacturing for nuclear applications.
Value Assessment
Rating: questionable
The contract's fixed-price incentive structure aims to control costs, but without competition, it's difficult to benchmark pricing against market alternatives. The total award of $322 million over its duration suggests a substantial investment where competitive pricing is crucial.
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 allows the contractor to set terms that may not be the most cost-effective for taxpayers.
Taxpayer Impact: The lack of competition likely results in higher costs for taxpayers compared to a scenario where multiple vendors could bid on the contract.
Public Impact
Taxpayers may be paying a premium due to the absence of competitive bidding. Potential for reduced innovation and technological advancement without market pressure. Ensuring the long-term safety and reliability of nuclear reactor components is paramount.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Potential for cost overruns
- Limited vendor options
- Long contract duration
Positive Signals
- Specialized expertise
- Established vendor relationship
Sector Analysis
This contract falls within the specialized plate work manufacturing sector, crucial for the Department of Energy's nuclear operations. Benchmarking is difficult due to the niche nature and lack of competitive data.
Small Business Impact
The data does not indicate any involvement of small businesses in this contract, suggesting a focus on large, specialized industrial contractors.
Oversight & Accountability
The 'NOT COMPETED' status warrants close oversight to ensure the government is receiving fair value and that the contractor is meeting all performance requirements. Transparency in pricing and performance metrics is essential.
Related Government Programs
- Plate Work Manufacturing
- Department of Energy Contracting
- Department of Energy Programs
Risk Flags
- Sole-source award
- Lack of competitive bidding
- Potential for inflated costs
- Long contract duration without re-evaluation
- Limited transparency in pricing mechanisms
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 $322.1 million to BWXT NUCLEAR OPERATIONS GROUP, INC.. REACTOR CORES
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 $322.1 million.
What is the period of performance?
Start: 2000-01-15. End: 2012-12-31.
What is the justification for awarding this contract on a sole-source basis, and what steps were taken to ensure fair pricing without competition?
The justification for a sole-source award typically involves unique capabilities or critical national security needs. For this contract, the Department of Energy would need to demonstrate that BWXT Nuclear Operations Group, Inc. possesses the sole capability to produce these specific reactor cores. Steps to ensure fair pricing might include detailed cost analysis, negotiation based on historical data, or independent cost estimations, though these are less effective than competitive bidding.
What are the potential risks associated with a long-term, sole-source contract for critical nuclear components, particularly regarding technological obsolescence or vendor lock-in?
A long-term, sole-source contract for critical nuclear components carries risks of technological obsolescence if the vendor does not invest in modernization or if alternative technologies emerge. Vendor lock-in is also a significant concern, making it difficult and costly to switch providers even if performance or pricing becomes unfavorable. This can also stifle innovation as the vendor may face less pressure to adopt new methods or materials.
How does the Department of Energy ensure the effectiveness and safety of these reactor cores when procured through a non-competitive process?
Effectiveness and safety are ensured through rigorous government oversight, stringent quality control measures, and detailed performance specifications outlined in the contract. The Department of Energy likely employs its own technical experts to monitor production, conduct inspections, and perform testing to verify that the reactor cores meet all safety and performance standards. Compliance with regulatory requirements is also a critical component of ensuring effectiveness.
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
Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE (L)
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: $388,751,294
Exercised Options: $388,751,294
Current Obligation: $322,130,294
Timeline
Start Date: 2000-01-15
Current End Date: 2012-12-31
Potential End Date: 2012-12-31 00:00:00
Last Modified: 2014-06-23
More Contracts from Bwxt Nuclear Operations Group, Inc.
- Manufacture of Naval Reactor Cores — $1.4B (Department of Energy)
- Manufacture Reactor Cores and Steam Generators for the Navy Nuclear Propulsion Program — $1.1B (Department of Energy)
- Naval Reactor Cores — $596.0M (Department of Energy)
- Manufacture of Reactor Cores — $482.0M (Department of Energy)
- Naval Reactor Cores — $403.7M (Department of Energy)
View all Bwxt Nuclear Operations Group, Inc. federal contracts →
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)