DOE's $1.93B facilities support contract to Bechtel SAIC awarded under full and open competition
Contract Overview
Contract Amount: $1,931,096,265 ($1.9B)
Contractor: Bechtel SAIC Company, LLC
Awarding Agency: Department of Energy
Start Date: 2000-11-14
End Date: 2009-03-31
Contract Duration: 3,059 days
Daily Burn Rate: $631.3K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: COST PLUS AWARD FEE
Sector: Other
Place of Performance
Location: LAS VEGAS, CLARK County, NEVADA, 89134
State: Nevada Government Spending
Plain-Language Summary
Department of Energy obligated $1.93 billion to BECHTEL SAIC COMPANY, LLC for work described as: Key points: 1. Contract awarded for facilities support services, indicating a need for comprehensive site management. 2. The contract's duration of over 3000 days suggests a long-term strategic partnership. 3. Awarded as a Cost Plus Award Fee (CPAF) type, incentivizing performance but requiring careful oversight. 4. The significant dollar value points to a critical function within the Department of Energy. 5. The 'NV' and 'NEVADA' codes suggest a specific geographic focus, likely related to national laboratories or facilities in that state. 6. The absence of small business set-aside indicates the scale and nature of the services required may not have been suitable for smaller entities.
Value Assessment
Rating: fair
The contract's value of over $1.93 billion over its life is substantial. Benchmarking this against similar large-scale facilities support contracts for government agencies is challenging without more specific service details. The Cost Plus Award Fee (CPAF) structure means the final cost can vary based on performance, making a direct price comparison difficult. However, the sheer scale suggests a significant investment in maintaining critical infrastructure. The award to a single large entity, BECHTEL SAIC COMPANY, LLC, implies a high degree of specialization and capacity was sought.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under 'FULL AND OPEN COMPETITION,' indicating that all responsible sources were permitted to submit bids. The presence of two bids ('no': 2) suggests a competitive process, though the number of bidders is on the lower side for a contract of this magnitude. This level of competition, while present, might not have driven prices down as aggressively as a larger pool of bidders could have. The agency likely sought highly specialized capabilities, which may have limited the number of qualified offerors.
Taxpayer Impact: Taxpayers benefit from the potential for competitive pricing, even with a limited number of bidders. The full and open competition process ensures that the government explored the market for the best value. However, with only two bids, the potential for cost savings might have been constrained compared to a more robust competition.
Public Impact
The primary beneficiaries are likely the Department of Energy and its various facilities, ensuring operational continuity and maintenance. Services delivered encompass a broad range of facilities support, potentially including maintenance, operations, security, and environmental services. The geographic impact is concentrated in Nevada, suggesting support for key national laboratories or energy research facilities. Workforce implications include the creation or sustainment of numerous jobs in the Nevada region, spanning various skill sets from technical to administrative.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition (2 bidders) may have reduced price pressure.
- Cost Plus Award Fee (CPAF) structure requires diligent oversight to manage costs and ensure value.
- Long contract duration (over 8 years) could lead to cost overruns if not managed effectively.
- The scale of the contract suggests a high degree of reliance on a single contractor, posing potential risk if performance falters.
Positive Signals
- Awarded under full and open competition, maximizing the pool of potential offerors.
- The contractor, BECHTEL SAIC COMPANY, LLC, is a large, established entity with significant experience in government contracting.
- The CPAF structure incentivizes contractor performance, potentially leading to higher quality service delivery.
- The contract's focus on facilities support is critical for the operational integrity of DOE's assets.
Sector Analysis
This contract falls within the Facilities Support Services sector, a broad category encompassing the management and operation of physical infrastructure. The market for such services is substantial, driven by government agencies and large private corporations requiring comprehensive site management. This specific contract, valued at nearly $2 billion, represents a significant portion of spending within this niche for the Department of Energy, likely supporting critical national assets in Nevada. Comparable spending benchmarks would involve looking at other large-scale federal contracts for base operations and facilities management at major government installations.
Small Business Impact
The contract was not set aside for small businesses ('sb': false), and there is no indication of specific subcontracting requirements for small businesses in the provided data. This suggests that the scope and complexity of the facilities support services required were likely beyond the capacity of most small businesses, or that the prime contractor was expected to handle the majority of the work internally. The absence of set-asides means that opportunities for small businesses to participate in this contract are likely limited to direct subcontracting by the prime, if any is pursued.
Oversight & Accountability
The contract's Cost Plus Award Fee (CPAF) structure necessitates robust oversight to ensure that award fees are justified by performance and that costs are reasonable. The Department of Energy, as the awarding agency, would be responsible for monitoring contractor performance against defined metrics and for auditing costs. Transparency would be facilitated through contract reporting mechanisms and potentially through public contract databases. Inspector General jurisdiction would apply to any allegations of fraud, waste, or abuse related to the contract.
Related Government Programs
- Department of Energy Facilities Operations
- National Nuclear Security Administration Contracts
- Government Base Operations Support
- Large-Scale Infrastructure Management Contracts
- Cost-Plus-Award-Fee Contracts
Risk Flags
- Cost Overruns Risk
- Performance Monitoring Challenges
- Limited Competition Impact
- Contractor Dependency
Tags
facilities-support, department-of-energy, nevada, definitive-contract, large-contract, cost-plus-award-fee, full-and-open-competition, infrastructure-management, energy-sector, government-contracting
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $1.93 billion to BECHTEL SAIC COMPANY, LLC. See the official description on USAspending.
Who is the contractor on this award?
The obligated recipient is BECHTEL SAIC COMPANY, LLC.
Which agency awarded this contract?
Awarding agency: Department of Energy (Department of Energy).
What is the total obligated amount?
The obligated amount is $1.93 billion.
What is the period of performance?
Start: 2000-11-14. End: 2009-03-31.
What specific types of facilities support services are included under this contract?
While the provided data categorizes this contract under 'Facilities Support Services' (NAICS 561210), the specific deliverables are not detailed. Typically, such contracts encompass a wide array of services essential for the operation and maintenance of government facilities. This can include, but is not limited to, infrastructure maintenance (e.g., HVAC, plumbing, electrical), groundskeeping, custodial services, waste management, pest control, security services, transportation support, mail services, and potentially specialized support for research or operational facilities. Given the Department of Energy's mission and the Nevada location, services might also involve support for unique scientific or energy-related infrastructure, including environmental compliance and safety protocols.
How does the $1.93 billion contract value compare to similar facilities support contracts awarded by the federal government?
The $1.93 billion total award amount for this contract is substantial, placing it among the larger federal contracts for facilities support services. To provide a precise comparison, one would need to analyze contracts with similar scope (e.g., comprehensive base operations, management of large scientific or industrial complexes) and duration across various agencies like the Department of Defense, NASA, or the General Services Administration. However, contracts of this magnitude are generally awarded for managing extensive government installations, such as major military bases, large research laboratories, or significant federal agency headquarters. The value reflects the complexity and scale of maintaining critical government infrastructure over an extended period.
What are the primary risks associated with a Cost Plus Award Fee (CPAF) contract of this size and duration?
The primary risks with a CPAF contract of this magnitude ($1.93 billion) and long duration (over 8 years) revolve around cost control and performance oversight. For the government, there's a risk that costs could escalate beyond initial projections, especially if the 'cost plus' component is not rigorously managed and audited. The 'award fee' aspect, while intended to incentivize performance, can also lead to disputes if performance metrics are unclear or if the contractor's achievements are subjectively evaluated. For the contractor, the risk lies in not meeting the performance targets required to earn the maximum award fee, potentially impacting profitability. Effective management requires clear performance standards, robust auditing, and continuous monitoring by the contracting officer's representative (COR).
What is the track record of BECHTEL SAIC COMPANY, LLC in managing large federal facilities support contracts?
BECHTEL SAIC COMPANY, LLC (a joint venture, though the data lists it as a single entity) has a significant track record in managing large, complex federal contracts, particularly within the Department of Energy and defense sectors. Bechtel, in particular, is known for its extensive experience in large-scale engineering, construction, and project management, including managing major government facilities and infrastructure projects. Science Applications International Corporation (SAIC) also has a strong history in government IT and technical services. Their combined capabilities suggest a strong foundation for undertaking a large facilities support contract. Specific performance details on past contracts would require further investigation into contract performance reports and award histories.
How does the limited competition (2 bidders) impact the value proposition for taxpayers?
Limited competition, such as the two bids received for this contract, can potentially reduce the downward pressure on pricing that a larger number of bidders might exert. While the contract was awarded under 'full and open competition,' meaning all qualified firms could bid, the market may have had only two entities capable of meeting the stringent requirements. This could mean that the final negotiated price might be higher than if, for example, five or six firms had competed. However, the 'award fee' component in the CPAF structure allows the government to reward exceptional performance, potentially offsetting higher base costs with quality service delivery. Taxpayers benefit from the process ensuring a qualified contractor was selected, but the potential for cost savings through intense competition may have been constrained.
What are the historical spending patterns for facilities support services at the Department of Energy, and how does this contract fit?
The Department of Energy (DOE) historically spends significant amounts on facilities support services due to its vast portfolio of research laboratories, production sites, and administrative facilities. Spending in this category is often driven by the need to maintain aging infrastructure, ensure operational safety and security, and support complex scientific missions. This $1.93 billion contract represents a major component of DOE's facilities support spending, likely consolidating services for a significant portion of its Nevada-based operations. Analyzing historical DOE spending data would reveal trends in contract values, types of services procured, and the contractors most frequently awarded these types of agreements, providing context for the scale and importance of this particular award.
Industry Classification
NAICS: Administrative and Support and Waste Management and Remediation Services › Facilities Support Services › Facilities Support Services
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 AWARD FEE (R)
Contractor Details
Parent Company: Bechtel Group, Inc. (UEI: 094878980)
Address: 1080 TOWN CENTER DR, LAS VEGAS, NV, 89144
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $2,558,209,366
Exercised Options: $2,558,209,366
Current Obligation: $1,931,096,265
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Timeline
Start Date: 2000-11-14
Current End Date: 2009-03-31
Potential End Date: 2009-03-31 00:00:00
Last Modified: 2019-06-17
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