DOE's $2.56B contract for Knolls Atomic Power Lab management shows long-term R&D investment
Contract Overview
Contract Amount: $2,563,275,783 ($2.6B)
Contractor: Kapl Inc
Awarding Agency: Department of Energy
Start Date: 2000-10-01
End Date: 2010-09-30
Contract Duration: 3,651 days
Daily Burn Rate: $702.1K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: COST PLUS FIXED FEE
Sector: R&D
Official Description: MANAGEMENT AND OPERATION OF KNOLLS ATOMIC POWER LABORATORY
Place of Performance
Location: SCHENECTADY, SCHENECTADY County, NEW YORK, 12309
State: New York Government Spending
Plain-Language Summary
Department of Energy obligated $2.56 billion to KAPL INC for work described as: MANAGEMENT AND OPERATION OF KNOLLS ATOMIC POWER LABORATORY Key points: 1. Contract awarded to KAPL INC for management and operation of the Knolls Atomic Power Laboratory. 2. Significant long-term commitment to research and development in physical, engineering, and life sciences. 3. Contract duration of over 10 years indicates a stable, ongoing need for these specialized services. 4. The 'Cost Plus Fixed Fee' contract type suggests a focus on managing project costs while incentivizing efficient completion. 5. Awarded under full and open competition, implying a robust bidding process. 6. The contract's value underscores the importance of nuclear research and development to national interests.
Value Assessment
Rating: good
The contract value of $2.56 billion over 10 years represents a substantial investment in nuclear research and development. Benchmarking this against similar large-scale laboratory management contracts is challenging due to the specialized nature of nuclear facilities. However, the duration and scale suggest a fair valuation for the critical services provided. The 'Cost Plus Fixed Fee' structure aims to control costs while ensuring the contractor is incentivized to perform efficiently.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, indicating that multiple qualified bidders had the opportunity to submit proposals. The presence of two bids suggests a competitive environment, which typically leads to better pricing and service offerings for the government. The competitive nature of the award process is a positive indicator for price discovery and value for taxpayer dollars.
Taxpayer Impact: Full and open competition ensures that taxpayers benefit from a rigorous evaluation of multiple proposals, driving down costs and improving the quality of services received for this critical national asset.
Public Impact
The primary beneficiaries are the Department of Energy and the nation, through continued advancements in nuclear science and technology. Services delivered include the management and operation of a key nuclear research facility, ensuring its continued functionality and safety. The geographic impact is concentrated in New York, where the Knolls Atomic Power Laboratory is located, supporting the local economy and workforce. Workforce implications include the employment of highly skilled scientists, engineers, technicians, and support staff essential for nuclear operations and research.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns inherent in 'Cost Plus' contracts if not rigorously managed.
- Long-term nature of the contract could lead to contractor complacency if performance metrics are not strictly enforced.
- Dependence on a single contractor for critical nuclear facility operations poses a risk if unforeseen issues arise with the contractor's capabilities.
Positive Signals
- Awarded through full and open competition, indicating a competitive process that should yield good value.
- The fixed fee component in the contract type provides a degree of cost certainty for the government.
- The long duration suggests a stable and reliable provider for essential, long-term research and development activities.
Sector Analysis
This contract falls within the Research and Development sector, specifically focusing on nuclear science and engineering. The market for managing and operating specialized nuclear facilities like Knolls Atomic Power Laboratory is highly concentrated, with a limited number of entities possessing the requisite expertise, security clearances, and infrastructure. Comparable spending benchmarks are difficult to establish due to the unique nature of nuclear laboratories, but the scale of this contract reflects the significant national investment in maintaining and advancing nuclear capabilities.
Small Business Impact
This contract does not appear to have a specific small business set-aside. Given the highly specialized nature of managing a nuclear laboratory, it is unlikely that small businesses would be primary bidders or subcontractors for the core operational services. However, opportunities may exist for small businesses in supporting roles or for specific components of the laboratory's needs, though this is not explicitly detailed in the award data.
Oversight & Accountability
Oversight for this contract would primarily fall under the Department of Energy's contracting and program management offices. Accountability measures are typically embedded within the contract's performance work statement, requiring adherence to strict operational, safety, and security protocols. Transparency is generally maintained through contract reporting requirements and public disclosures related to federal spending, though specific operational details of nuclear facilities may be sensitive.
Related Government Programs
- Department of Energy Research Programs
- Nuclear Energy Research
- National Laboratories Management
- Defense Nuclear Facilities Safety Board Oversight
Risk Flags
- Long-term contract duration
- Cost-plus contract type
- Specialized nature of facility
Tags
research-and-development, department-of-energy, new-york, cost-plus-fixed-fee, large-contract, full-and-open-competition, nuclear-energy, laboratory-operations, federal-contract, long-term-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $2.56 billion to KAPL INC. MANAGEMENT AND OPERATION OF KNOLLS ATOMIC POWER LABORATORY
Who is the contractor on this award?
The obligated recipient is KAPL INC.
Which agency awarded this contract?
Awarding agency: Department of Energy (Department of Energy).
What is the total obligated amount?
The obligated amount is $2.56 billion.
What is the period of performance?
Start: 2000-10-01. End: 2010-09-30.
What is the historical spending trend for the management and operation of the Knolls Atomic Power Laboratory?
The provided data reflects a single contract awarded from October 1, 2000, to September 30, 2010, with a total value of $2.56 billion. This indicates a significant, long-term investment during that period. To understand the broader historical spending trend, one would need to examine contracts preceding and succeeding this period awarded to KAPL INC or other entities for the same facility. Analyzing these historical data points would reveal whether spending has been consistent, increasing, or decreasing over time, and how it aligns with shifts in national priorities for nuclear research and development.
How does the 'Cost Plus Fixed Fee' contract structure compare to other contract types for managing large R&D facilities?
The 'Cost Plus Fixed Fee' (CPFF) contract type is common for complex R&D projects where the scope of work can be difficult to define precisely upfront, or where innovation is a key objective. In a CPFF contract, the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. This differs from fixed-price contracts, where the price is set regardless of actual costs, and cost-reimbursement contracts without a fixed fee, which may offer less incentive for cost control. For R&D facilities, CPFF aims to balance the need for flexibility and innovation with government oversight to prevent excessive spending, making it suitable for long-term, evolving research missions like those at Knolls Atomic Power Laboratory.
What are the key performance indicators (KPIs) typically used to evaluate the performance of a contractor managing a nuclear laboratory?
Evaluating a contractor managing a nuclear laboratory like Knolls involves a multi-faceted approach focusing on safety, security, operational efficiency, research output, and compliance. Key performance indicators (KPIs) often include metrics related to nuclear safety incidents (or lack thereof), security breaches, environmental compliance, operational uptime of critical systems, adherence to project schedules and budgets for research initiatives, the quality and impact of research publications and patents, and successful completion of regulatory inspections. Performance is also assessed against the specific requirements outlined in the Performance Work Statement (PWS), with regular reviews and audits conducted by the contracting agency (in this case, the Department of Energy).
What is the significance of the Knolls Atomic Power Laboratory to the US nuclear research and development landscape?
The Knolls Atomic Power Laboratory (KAPL) plays a crucial role in the United States' nuclear research and development landscape, particularly in areas related to naval nuclear propulsion and advanced nuclear technologies. Historically, KAPL has been instrumental in the design, construction, and operation of nuclear reactors for submarines and aircraft carriers. Beyond naval applications, it contributes to broader nuclear science research, materials science, and the development of new reactor concepts. Its continued operation and management are vital for maintaining national security, advancing energy technologies, and preserving specialized expertise within the nuclear field.
What are the potential risks associated with a sole-source or limited competition award for a facility of this nature?
While this contract was awarded under full and open competition, it's important to consider the risks of sole-source or limited competition for such critical facilities. A sole-source award, where only one contractor is solicited, eliminates price competition entirely, potentially leading to significantly higher costs for taxpayers. It also reduces the incentive for the contractor to innovate or improve efficiency. Limited competition, involving a small number of pre-selected bidders, can also result in less aggressive pricing than full and open competition. Furthermore, relying on a limited pool of contractors might stifle the development of new capabilities in the market and could pose a risk if the selected contractor faces performance issues or financial instability.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences
Product/Service Code: OPERATION OF GOVT OWNED FACILITY › OPERATE GOVT OWNED BUILDINGS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Offers Received: 2
Pricing Type: COST PLUS FIXED FEE (U)
Contractor Details
Parent Company: Bechtel Group, Inc. (UEI: 094878980)
Address: 2401 RIVER ROAD, NISKAYUNA, NY, 20
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $2,563,275,783
Exercised Options: $2,563,275,783
Current Obligation: $2,563,275,783
Timeline
Start Date: 2000-10-01
Current End Date: 2010-09-30
Potential End Date: 2010-09-30 00:00:00
Last Modified: 2009-05-05
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