DOE's $371M Los Alamos cleanup contract awarded to Los Alamos National Security LLC, raising questions about competition and value
Contract Overview
Contract Amount: $370,888,545 ($370.9M)
Contractor: LOS Alamos National Security LLC
Awarding Agency: Department of Energy
Start Date: 2015-09-23
End Date: 2017-09-30
Contract Duration: 738 days
Daily Burn Rate: $502.6K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS AWARD FEE
Sector: Other
Official Description: OFFICE OF ENVIRONMENTAL MANAGEMENT-LOS ALAMOS (EMLA) LEGACY CLEANUP BRIDGE CONTRACT IGF::OT::IGF
Place of Performance
Location: LOS ALAMOS, LOS ALAMOS County, NEW MEXICO, 87545
Plain-Language Summary
Department of Energy obligated $370.9 million to LOS ALAMOS NATIONAL SECURITY LLC for work described as: OFFICE OF ENVIRONMENTAL MANAGEMENT-LOS ALAMOS (EMLA) LEGACY CLEANUP BRIDGE CONTRACT IGF::OT::IGF Key points: 1. The contract's value of over $370 million over two years suggests a significant investment in environmental remediation. 2. Awarded as 'NOT COMPETED', this raises concerns about the lack of competitive bidding and potential impact on pricing. 3. The 'COST PLUS AWARD FEE' contract type can incentivize performance but also carries risks of cost overruns if not managed tightly. 4. The contract's duration of 738 days indicates a substantial, ongoing need for remediation services at the Los Alamos site. 5. The absence of small business set-asides (ss: false, sb: false) suggests limited direct opportunities for smaller firms in this specific award. 6. The primary contractor, Los Alamos National Security LLC, likely possesses specialized expertise required for complex cleanup operations.
Value Assessment
Rating: questionable
Benchmarking the value of this contract is challenging without comparable remediation contracts for similar sites. The 'COST PLUS AWARD FEE' structure, while common for complex projects, can lead to higher costs compared to fixed-price contracts if performance incentives are not well-defined or if costs escalate unexpectedly. The lack of competition further complicates a direct value-for-money assessment, as there's no market benchmark to compare against.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was explicitly marked as 'NOT COMPETED', indicating a sole-source award. This means that only one contractor, Los Alamos National Security LLC, was solicited or considered for this work. The absence of a competitive bidding process limits the opportunity for price discovery and may result in higher costs than if multiple firms had vied for the contract.
Taxpayer Impact: Taxpayers may have paid a premium due to the lack of competition. Without competing bids, there is less pressure on the contractor to offer the most cost-effective solution.
Public Impact
The primary beneficiaries are the Department of Energy and the public, through the cleanup of environmental hazards at the Los Alamos National Laboratory. Services delivered include critical remediation activities to address legacy contamination. The geographic impact is concentrated in Los Alamos, New Mexico, addressing site-specific environmental concerns. The contract supports a workforce engaged in specialized environmental cleanup and management.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition may lead to inflated costs for taxpayers.
- Cost-plus contract type introduces risk of cost overruns without stringent oversight.
- Limited transparency on the specific performance metrics driving award fees.
- Potential for contractor lock-in due to specialized nature of work and sole-source award.
Positive Signals
- Contract addresses critical environmental cleanup needs at a significant national laboratory.
- Awardee likely possesses specialized expertise essential for complex remediation.
- Contract duration suggests a commitment to resolving long-term environmental issues.
Sector Analysis
Environmental remediation services represent a critical sector within government contracting, particularly for agencies managing legacy industrial or research sites. The market for such services is specialized, often requiring unique technical capabilities and regulatory compliance. Spending in this area is driven by environmental regulations and the need to mitigate historical contamination. Comparable spending benchmarks are difficult to establish without detailed project scope, but large-scale cleanup efforts at federal facilities can run into hundreds of millions or even billions of dollars.
Small Business Impact
The data indicates that this contract was not competed and did not include small business set-asides (ss: false, sb: false). This suggests that small businesses were not specifically targeted for this particular award. While the prime contractor may engage subcontractors, the absence of direct set-asides means that opportunities for small businesses are not guaranteed and would depend on the prime's subcontracting strategy. This contract does not appear to directly contribute to the small business ecosystem through set-aside goals.
Oversight & Accountability
Oversight for this contract would primarily fall under the Department of Energy's contracting and program management offices. The 'COST PLUS AWARD FEE' structure implies performance metrics that are monitored to determine award fees, suggesting a degree of accountability. However, the effectiveness of oversight is contingent on the rigor of performance evaluations and cost controls. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse related to the contract.
Related Government Programs
- Department of Energy Environmental Management
- Los Alamos National Laboratory Operations
- Federal Remediation Services
- Legacy Waste Cleanup Contracts
Risk Flags
- Lack of Competition
- Cost Plus Contract Type Risk
- Potential for Overpricing
Tags
department-of-energy, environmental-remediation, los-alamos, new-mexico, definitive-contract, cost-plus-award-fee, not-competed, large-contract, legacy-cleanup, national-laboratory
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $370.9 million to LOS ALAMOS NATIONAL SECURITY LLC. OFFICE OF ENVIRONMENTAL MANAGEMENT-LOS ALAMOS (EMLA) LEGACY CLEANUP BRIDGE CONTRACT IGF::OT::IGF
Who is the contractor on this award?
The obligated recipient is LOS ALAMOS NATIONAL SECURITY LLC.
Which agency awarded this contract?
Awarding agency: Department of Energy (Department of Energy).
What is the total obligated amount?
The obligated amount is $370.9 million.
What is the period of performance?
Start: 2015-09-23. End: 2017-09-30.
What is the track record of Los Alamos National Security LLC in managing large-scale environmental cleanup contracts for the Department of Energy?
Los Alamos National Security LLC (LANS) has a long-standing relationship with the Department of Energy (DOE) managing the Los Alamos National Laboratory (LANL). Their track record includes overseeing complex operations, research, and development, as well as environmental management. However, specific details on their performance in environmental cleanup contracts, particularly concerning cost control, schedule adherence, and environmental outcomes, would require a deeper dive into past performance reviews and audit reports. Given their role as the primary operator of LANL, they are inherently involved in managing the site's environmental legacy. The 'COST PLUS AWARD FEE' structure of this contract suggests that performance is evaluated, but the specifics of that evaluation and LANS's historical success in meeting such metrics are crucial for a full assessment.
How does the cost of this contract compare to similar environmental remediation projects at other federal facilities?
Direct cost comparison is difficult without detailed scope of work and site-specific conditions. However, the contract's total value of approximately $371 million over roughly two years for remediation services at a major federal facility like Los Alamos is substantial. The 'COST PLUS AWARD FEE' (CPAF) contract type generally tends to be more expensive than fixed-price contracts because it shifts some risk to the government and includes incentives. Without knowing the exact nature and scale of the remediation required, it's hard to benchmark. However, large-scale environmental cleanup projects at sites like Hanford or Rocky Flats have involved billions of dollars, indicating that the scale of work at Los Alamos is significant, but potentially not the largest in the federal portfolio. The lack of competition further complicates a value assessment against market rates.
What are the primary risks associated with a 'NOT COMPETED' sole-source contract for environmental remediation?
The primary risks associated with a 'NOT COMPETED' sole-source contract for environmental remediation are significant. Firstly, the lack of competition means the government likely does not achieve the lowest possible price, potentially leading to higher costs for taxpayers. There is less incentive for the contractor to be efficient or innovative when they are the only option. Secondly, it raises concerns about whether the selected contractor is truly the best qualified or simply the incumbent or easiest to award to. Without a competitive process, the government has less assurance that it is receiving optimal value and performance. This can also lead to a perception of unfairness and potentially limit the entry of new, innovative companies into the federal remediation market.
How effective are 'Cost Plus Award Fee' contracts in ensuring accountability and value for money in environmental cleanup?
'Cost Plus Award Fee' (CPAF) contracts aim to balance flexibility for complex, uncertain projects with incentives for contractor performance. In environmental cleanup, where scope can evolve, CPAF can be effective if the award fee criteria are clearly defined, measurable, and directly tied to critical performance outcomes such as safety, environmental protection, schedule adherence, and cost control. Accountability is built through the performance evaluation process that determines the award fee. However, CPAF contracts also carry risks. If the criteria are vague or if the government's oversight is weak, contractors may not be sufficiently motivated to control costs, potentially leading to overruns. The government must have robust systems to monitor performance and objectively assess the contractor's achievements to ensure value for money.
What is the historical spending pattern for environmental remediation at Los Alamos National Laboratory?
Historical spending on environmental remediation at Los Alamos National Laboratory (LANL) has been substantial, reflecting decades of complex cleanup activities. The Department of Energy's Office of Environmental Management (EM) is responsible for this cleanup. While specific annual figures fluctuate based on project needs and funding appropriations, LANL has consistently been a major focus area for EM. The total cumulative spending over the years runs into billions of dollars. Contracts for remediation services at LANL have been awarded to various entities, including Los Alamos National Security LLC, which manages the laboratory. This 'bridge contract' represents a portion of that ongoing, long-term investment in addressing the site's environmental legacy.
Industry Classification
NAICS: Administrative and Support and Waste Management and Remediation Services › Remediation and Other Waste Management Services › Remediation Services
Product/Service Code: NATURAL RESOURCES MANAGEMENT › NATURAL RESOURCES - OTHER SVCS
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: DE-SOL-0007781
Offers Received: 1
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Address: BIKINI ATOLL RD SM 30, LOS ALAMOS, NM, 87545
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $389,375,493
Exercised Options: $389,375,493
Current Obligation: $370,888,545
Actual Outlays: $-31,617
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2015-09-23
Current End Date: 2017-09-30
Potential End Date: 2022-05-19 00:00:00
Last Modified: 2022-05-19
More Contracts from LOS Alamos National Security LLC
View all LOS Alamos National Security LLC 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)