DOE's $4.16B Rocky Flats Closure Contract with Kaiser-Hill Faced No Competition, Raising Cost Concerns
Contract Overview
Contract Amount: $4,156,910,383 ($4.2B)
Contractor: Kaiser-Hill Company, LLC
Awarding Agency: Department of Energy
Start Date: 2000-01-15
End Date: 2006-12-15
Contract Duration: 2,526 days
Daily Burn Rate: $1.6M/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Number of Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Other
Official Description: ROCKY FLATS CLOSURE CONTRACT
Place of Performance
Location: GREENWOOD VILLAGE, ARAPAHOE County, COLORADO, 80111
State: Colorado Government Spending
Plain-Language Summary
Department of Energy obligated $4.16 billion to KAISER-HILL COMPANY, LLC for work described as: ROCKY FLATS CLOSURE CONTRACT Key points: 1. The $4.16 billion contract for Rocky Flats closure was awarded without competition, potentially limiting price discovery. 2. Facilities Support Services (NAICS 561210) is a broad category, making direct sector benchmarks challenging without more detail. 3. The lack of competition is a significant risk factor, potentially leading to inflated costs for taxpayers. 4. The contract's duration of 2526 days (approx. 7 years) indicates a long-term commitment with ongoing oversight needs.
Value Assessment
Rating: questionable
Contract value is substantial at over $4.16 billion. Without competitive bidding, it's difficult to assess if this price reflects fair market value for facilities support services.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was not available for competition, indicating a sole-source or limited source award. This significantly reduces the opportunity for price negotiation and potentially leads to higher costs.
Taxpayer Impact: The absence of competition means taxpayers may have paid more than necessary for these services, as there was no market pressure to drive down costs.
Public Impact
Environmental cleanup and site closure are critical public services with long-term implications. Large federal contracts without competition can set precedents for future procurements. Transparency and accountability are paramount when significant taxpayer funds are involved in complex projects like nuclear site closure.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- High contract value
- Potential for cost overruns due to limited price discovery
Positive Signals
- Contract aimed at critical environmental remediation
- Long-term commitment suggests a defined scope of work
Sector Analysis
Facilities Support Services (NAICS 561210) encompass a wide range of activities. Benchmarking this specific closure contract is difficult without granular details on the services provided, but large-scale environmental remediation contracts can be very costly.
Small Business Impact
The data indicates this contract was not awarded to small businesses (ss: false, sb: false). The scale and nature of the Rocky Flats closure likely required large, specialized contractors.
Oversight & Accountability
The Department of Energy (DOE) is the contracting agency. Oversight would typically involve monitoring contract performance, cost, and adherence to environmental regulations. The lack of competition necessitates heightened scrutiny.
Related Government Programs
- Facilities Support Services
- Department of Energy Contracting
- Department of Energy Programs
Risk Flags
- Sole-source award limits price competition.
- High contract value increases financial risk.
- Potential for cost overruns due to lack of competitive pressure.
- Complexity of environmental remediation projects can lead to unforeseen costs.
- Long contract duration increases exposure to changing regulations and economic conditions.
Tags
facilities-support-services, department-of-energy, co, definitive-contract, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $4.16 billion to KAISER-HILL COMPANY, LLC. ROCKY FLATS CLOSURE CONTRACT
Who is the contractor on this award?
The obligated recipient is KAISER-HILL 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 $4.16 billion.
What is the period of performance?
Start: 2000-01-15. End: 2006-12-15.
What specific factors justified the 'not available for competition' determination for this large contract?
The justification for a sole-source or limited-competition award typically requires a detailed explanation from the agency, citing unique capabilities, urgent needs, or lack of qualified sources. Without this documentation, it's impossible to assess the validity of the non-competitive decision and whether alternatives were truly unavailable.
Were there any mechanisms in place to ensure cost control despite the lack of competition?
Cost-plus incentive fee contracts aim to control costs by linking contractor profit to performance metrics, including cost targets. However, the effectiveness of these mechanisms is diminished without a competitive baseline. Robust government oversight and auditing would be crucial to manage costs effectively in such a scenario.
What was the final cost compared to the initial estimates, and how did performance metrics influence the final payment?
Detailed final cost data and performance outcomes are not provided. Analyzing the final expenditure against initial projections and the impact of incentive fee structures on the contractor's profit would reveal the true cost-effectiveness and value delivered by Kaiser-Hill Company, LLC.
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 RESTORATION ACTIVITIES
Competition & Pricing
Extent Competed: NOT AVAILABLE FOR COMPETITION
Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE (V)
Contractor Details
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $4,156,910,383
Exercised Options: $4,156,910,383
Current Obligation: $4,156,910,383
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Timeline
Start Date: 2000-01-15
Current End Date: 2006-12-15
Potential End Date: 2006-12-15 00:00:00
Last Modified: 2016-09-29
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