DOE Spends $482M on Reactor Core Manufacturing with BWXT Nuclear Operations Group
Contract Overview
Contract Amount: $482,004,801 ($482.0M)
Contractor: Bwxt Nuclear Operations Group, Inc.
Awarding Agency: Department of Energy
Start Date: 2008-09-29
End Date: 2016-11-30
Contract Duration: 2,984 days
Daily Burn Rate: $161.5K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIXED PRICE REDETERMINATION
Sector: Other
Official Description: MANUFACTURE OF REACTOR CORES
Place of Performance
Location: LYNCHBURG, LYNCHBURG (CITY) County, VIRGINIA, 24505
State: Virginia Government Spending
Plain-Language Summary
Department of Energy obligated $482.0 million to BWXT NUCLEAR OPERATIONS GROUP, INC. for work described as: MANUFACTURE OF REACTOR CORES Key points: 1. Significant contract value of $482 million for specialized manufacturing. 2. Sole-source award indicates limited competition for this critical component. 3. Long contract duration (2008-2016) suggests a stable, long-term relationship. 4. High dollar value and specialized nature may present significant taxpayer risk if not managed effectively.
Value Assessment
Rating: questionable
The contract value is substantial, but without comparable contract data or detailed cost breakdowns, assessing its value for money is difficult. The fixed-price redetermination structure suggests potential for cost overruns if not closely monitored.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was awarded on a sole-source basis, meaning there was no open competition. This limits price discovery and potentially leads to higher costs for the government.
Taxpayer Impact: The lack of competition for a nearly half-billion-dollar contract raises concerns about taxpayer value and the potential for inflated prices.
Public Impact
Impacts national security and energy production through specialized nuclear components. Potential for long-term reliance on a single supplier for critical infrastructure. Requires robust oversight to ensure quality and safety standards are met.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- High contract value
- Fixed-price redetermination
Positive Signals
- Specialized manufacturing capability
- Long-term production for critical infrastructure
Sector Analysis
This contract falls within the specialized manufacturing sector, specifically for nuclear components. Spending benchmarks for such niche areas are difficult to establish due to limited market size and high technical barriers to entry.
Small Business Impact
The contract was awarded to BWXT Nuclear Operations Group, Inc., a large business. There is no indication of small business participation in this specific contract.
Oversight & Accountability
Given the sole-source nature and high value, rigorous oversight is crucial. The Department of Energy's contracting office (DOE) is responsible for ensuring performance, quality, and cost control throughout the contract lifecycle.
Related Government Programs
- Plate Work Manufacturing
- Department of Energy Contracting
- Department of Energy Programs
Risk Flags
- Potential for cost overruns due to fixed-price redetermination.
- Lack of competitive pressure may lead to higher prices.
- Strategic risk associated with sole-source dependency.
- Complexity of nuclear component manufacturing requires stringent quality control.
- Long contract duration may mask inefficiencies over time.
Tags
plate-work-manufacturing, department-of-energy, va, dca, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $482.0 million to BWXT NUCLEAR OPERATIONS GROUP, INC.. MANUFACTURE OF REACTOR CORES
Who is the contractor on this award?
The obligated recipient is BWXT NUCLEAR OPERATIONS GROUP, INC..
Which agency awarded this contract?
Awarding agency: Department of Energy (Department of Energy).
What is the total obligated amount?
The obligated amount is $482.0 million.
What is the period of performance?
Start: 2008-09-29. End: 2016-11-30.
What was the justification for the sole-source award, and were alternative procurement methods considered?
Sole-source awards are typically justified when only one responsible source can provide the required supplies or services. For specialized nuclear components, this might be due to unique technical capabilities, proprietary technology, or existing infrastructure. A thorough review would be needed to confirm if alternatives were explored and why they were deemed unsuitable.
How were costs determined and controlled under the fixed-price redetermination contract structure?
Fixed-price redetermination contracts involve an initial price that is subject to adjustment based on actual costs incurred. Effective cost control relies on detailed cost accounting, regular audits, and clear negotiation of the final price. The government must have robust mechanisms to verify the contractor's costs and ensure the redetermined price reflects fair value.
What are the long-term implications of relying on a single supplier for reactor core manufacturing?
Long-term reliance on a sole-source supplier can create strategic vulnerabilities, including potential supply chain disruptions, price escalation, and reduced innovation. It also limits opportunities for other capable firms to enter the market. Mitigation strategies might include developing alternative suppliers or investing in domestic industrial base capabilities.
Industry Classification
NAICS: Manufacturing › Architectural and Structural Metals Manufacturing › Plate Work Manufacturing
Product/Service Code: FURNACE/STEAM/DRYING; NUCL REACTOR
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: DE-RP11-08PN38007
Offers Received: 1
Pricing Type: FIXED PRICE REDETERMINATION (A)
Evaluated Preference: NONE
Contractor Details
Parent Company: BWX Technologies, Inc. (UEI: 968037221)
Address: 2016 MOUNT ATHOS RD, LYNCHBURG, VA, 05
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $482,004,801
Exercised Options: $482,004,801
Current Obligation: $482,004,801
Contract Characteristics
Cost or Pricing Data: YES
Timeline
Start Date: 2008-09-29
Current End Date: 2016-11-30
Potential End Date: 2016-11-30 00:00:00
Last Modified: 2014-06-23
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