DOE's $9.66B contract for Bettis and Knolls Atomic Power Labs managed by Bechtel Marine Propulsion Corporation
Contract Overview
Contract Amount: $9,656,715,913 ($9.7B)
Contractor: Bechtel Marine Propulsion Corporation
Awarding Agency: Department of Energy
Start Date: 2008-09-18
End Date: 2018-09-30
Contract Duration: 3,664 days
Daily Burn Rate: $2.6M/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: COST PLUS FIXED FEE
Sector: Other
Official Description: MANAGEMENT AND OPERATION OF THE BETTIS ATOMIC POWER LABORATORY AND THE KNOLLS ATOMIC POWER LABORATORY
Place of Performance
Location: WEST MIFFLIN, ALLEGHENY County, PENNSYLVANIA, 15122
Plain-Language Summary
Department of Energy obligated $9.66 billion to BECHTEL MARINE PROPULSION CORPORATION for work described as: MANAGEMENT AND OPERATION OF THE BETTIS ATOMIC POWER LABORATORY AND THE KNOLLS ATOMIC POWER LABORATORY Key points: 1. Contract awarded through full and open competition, suggesting a robust market. 2. Long-term contract duration (over 10 years) indicates a stable, ongoing need for these specialized services. 3. Cost-plus-fixed-fee contract type may incentivize cost control while ensuring contractor profit. 4. Significant value suggests critical national security or energy infrastructure operations. 5. The contract's focus on atomic power laboratories points to a highly specialized and regulated sector. 6. Performance is likely subject to stringent government oversight due to the nature of the work.
Value Assessment
Rating: good
The contract value of over $9.6 billion over approximately 10 years represents a substantial investment in managing critical atomic power laboratories. Benchmarking this against similar large-scale, long-term government facility management contracts is challenging due to the unique nature of nuclear operations. However, the cost-plus-fixed-fee structure, while common for complex projects, requires careful monitoring to ensure value for money. The fixed fee component provides some predictability for contractor profit, but the cost reimbursement aspect necessitates rigorous oversight of expenditures.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, indicating that multiple capable contractors had the opportunity to bid. The presence of three bidders (as suggested by 'no': 3) is a positive sign for competition, likely driving more competitive pricing and innovative solutions. This level of competition is generally favorable for the government, as it allows for a wider selection of qualified offerors and can lead to better overall value.
Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to lower prices and higher quality services, ensuring the government receives the best possible value for its investment.
Public Impact
The primary beneficiaries are the Department of Energy and potentially the Department of Defense, relying on the operational integrity of these laboratories. Services delivered include the management and operation of two key atomic power laboratories, crucial for nuclear propulsion research and development. The geographic impact is concentrated around the locations of the Bettis and Knolls Atomic Power Laboratories, primarily in Pennsylvania and New York. Workforce implications include employment for highly skilled scientists, engineers, technicians, and support staff within the nuclear energy sector.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns in a cost-plus contract if not rigorously managed.
- Complexity of managing nuclear facilities requires continuous, high-level expertise and oversight.
- Long-term nature of the contract could lead to contractor complacency if performance metrics are not strictly enforced.
Positive Signals
- Awarded through full and open competition, indicating a competitive process.
- Long contract duration suggests a stable and reliable provider for critical national assets.
- The contractor, Bechtel Marine Propulsion Corporation, likely possesses specialized expertise in managing such complex facilities.
Sector Analysis
This contract falls within the 'Facilities Support Services' sector, specifically related to the operation of highly specialized atomic power laboratories. The market for managing such facilities is niche, dominated by a few large, experienced contractors with the necessary security clearances and technical expertise. The scale of this contract, nearly $10 billion, places it among the largest in this specialized sub-sector, reflecting the critical national importance of the Bettis and Knolls Atomic Power Laboratories for nuclear propulsion research and development.
Small Business Impact
The data indicates that small business participation was not a primary set-aside consideration for this contract ('sb': false). Given the highly specialized nature of managing atomic power laboratories, it is likely that the prime contractor, Bechtel Marine Propulsion Corporation, relies on a supply chain of specialized subcontractors. Further analysis would be needed to determine the extent of small business involvement in subcontracting opportunities within this large-scale federal contract.
Oversight & Accountability
Oversight for this contract is primarily the responsibility of the Department of Energy. Given the critical nature of atomic power laboratories, oversight mechanisms are expected to be stringent, involving regular performance reviews, audits of cost expenditures, and adherence to strict safety and security protocols. The contract's duration and value suggest a dedicated program office within the agency to manage and monitor contractor performance and ensure accountability.
Related Government Programs
- Naval Nuclear Propulsion Program
- Department of Energy - Office of Nuclear Energy
- National Nuclear Security Administration
- Federal Facilities Cleanup Program
Risk Flags
- High-risk operational environment (nuclear facilities)
- Cost-reimbursement contract type requires diligent oversight
- Long-term contract duration necessitates sustained performance monitoring
Tags
department-of-energy, atomic-power-laboratories, facilities-support-services, bechtel-marine-propulsion-corporation, definitive-contract, cost-plus-fixed-fee, full-and-open-competition, pennsylvania, new-york, large-contract, nuclear-energy, research-and-development
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $9.66 billion to BECHTEL MARINE PROPULSION CORPORATION. MANAGEMENT AND OPERATION OF THE BETTIS ATOMIC POWER LABORATORY AND THE KNOLLS ATOMIC POWER LABORATORY
Who is the contractor on this award?
The obligated recipient is BECHTEL MARINE PROPULSION CORPORATION.
Which agency awarded this contract?
Awarding agency: Department of Energy (Department of Energy).
What is the total obligated amount?
The obligated amount is $9.66 billion.
What is the period of performance?
Start: 2008-09-18. End: 2018-09-30.
What is the historical spending trend for the Bettis and Knolls Atomic Power Laboratories under Bechtel Marine Propulsion Corporation?
The provided data reflects a single definitive contract awarded from September 2008 to September 2018 with a total value of $9,656,715,912.92. This suggests a consistent, high level of annual spending averaging approximately $965 million per year over the contract's duration. Without prior contract data for these laboratories or for Bechtel Marine Propulsion Corporation's management of them, it's difficult to establish a multi-year trend. However, the sheer magnitude of this single award indicates a sustained and significant federal investment in the operations of these atomic power laboratories over that decade.
How does the cost-plus-fixed-fee (CPFF) structure impact value for money in this contract?
The Cost-Plus-Fixed-Fee (CPFF) contract structure aims to balance cost control with contractor incentive. The 'cost-plus' element means the government reimburses the contractor for allowable costs incurred, while the 'fixed-fee' represents a predetermined profit amount. This structure is often used for research and development or complex projects where the final costs are uncertain. For taxpayers, the value for money depends heavily on the government's ability to rigorously audit and control the 'cost' component. If costs are managed effectively, the fixed fee provides predictable contractor profit. However, if cost oversight is weak, the government risks paying inflated costs, diminishing the overall value despite the fixed profit.
What are the key performance indicators (KPIs) likely used to assess Bechtel Marine Propulsion Corporation's performance?
Given the nature of managing atomic power laboratories, Key Performance Indicators (KPIs) would likely focus on operational safety, security, research output, facility maintenance, and cost control. Specific KPIs could include: adherence to nuclear safety regulations (zero major incidents), successful completion of research milestones, timely execution of maintenance schedules, security clearance compliance for all personnel, and performance against budget targets. The government would also likely track efficiency metrics related to energy production or experimental outcomes, depending on the laboratories' specific missions. Regular performance reviews and audits would assess the contractor's achievement against these defined KPIs.
What is the risk profile associated with managing atomic power laboratories, and how might it affect this contract?
Managing atomic power laboratories carries a high-risk profile due to the inherent dangers of nuclear materials, stringent regulatory requirements, and national security implications. Risks include potential accidents, environmental contamination, security breaches, and the need for highly specialized and continuously trained personnel. For this contract, these risks translate into a need for robust government oversight, stringent safety protocols, and potentially higher operational costs to mitigate these dangers. The contractor must maintain impeccable safety records and security clearances. Failure in any of these areas could lead to contract termination, significant financial penalties, and severe reputational damage, impacting future contract opportunities.
How does the 'Facilities Support Services' classification (NAICS 561210) align with the specialized nature of atomic power laboratories?
The NAICS code 561210, 'Facilities Support Services,' is a broad classification that encompasses a wide range of services related to the operation and maintenance of facilities. While it can include general building operations, it also covers more specialized functions. Managing atomic power laboratories, which involves complex infrastructure, safety systems, security, and specialized technical operations related to nuclear energy, fits within this code as it represents the comprehensive support required to keep these unique facilities operational and secure. However, it's a high-end, specialized application of facilities support, distinct from typical office building management.
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
Solicitation Procedures: SEALED BID
Solicitation ID: DE-RP11-08PN38002
Offers Received: 3
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Bechtel Group, Inc. (UEI: 094878980)
Address: 50 BEALE ST, SAN FRANCISCO, CA, 94105
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $9,656,715,913
Exercised Options: $9,656,715,913
Current Obligation: $9,656,715,913
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2008-09-18
Current End Date: 2018-09-30
Potential End Date: 2018-09-30 00:00:00
Last Modified: 2018-11-09
More Contracts from Bechtel Marine Propulsion Corporation
- Nuclear Reactor Work AT the Bettis and Knolls Atomic Power Laboratories — $10.9B (Department of Defense)
View all Bechtel Marine Propulsion Corporation 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)