DOE Spends $133M on Naval Reactor Cores with BWXT Nuclear Operations Group
Contract Overview
Contract Amount: $132,947,383 ($132.9M)
Contractor: Bwxt Nuclear Operations Group, Inc.
Awarding Agency: Department of Energy
Start Date: 2014-01-24
End Date: 2019-05-15
Contract Duration: 1,937 days
Daily Burn Rate: $68.6K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE
Sector: Defense
Official Description: MANUFATURE OF NAVAL REACTOR CORES
Place of Performance
Location: LYNCHBURG, LYNCHBURG (CITY) County, VIRGINIA, 24505
State: Virginia Government Spending
Plain-Language Summary
Department of Energy obligated $132.9 million to BWXT NUCLEAR OPERATIONS GROUP, INC. for work described as: MANUFATURE OF NAVAL REACTOR CORES Key points: 1. Significant contract value of $133 million awarded to a single entity. 2. Limited competition due to the specialized nature of naval reactor core manufacturing. 3. Potential risk associated with sole-source procurement and reliance on one supplier. 4. Sector context: Defense industrial base, critical for national security.
Value Assessment
Rating: fair
The contract value of $133 million for naval reactor cores is substantial. Without comparable contract data for similar specialized components, a precise pricing assessment is difficult. However, the fixed-price incentive structure suggests an attempt to control costs while incentivizing performance.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This approach is likely due to the highly specialized and sensitive nature of naval reactor core manufacturing, requiring unique capabilities and security clearances. The lack of competition limits price discovery and potentially increases costs.
Taxpayer Impact: Taxpayer funds are directed to a single contractor for a critical defense component, with limited opportunity for competitive bidding to ensure the best value.
Public Impact
Ensures continued operation and maintenance of critical naval assets. Supports a highly specialized industrial capability within the U.S. Potential for cost overruns due to lack of competitive pressure. Impacts national security by maintaining a unique manufacturing base.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source procurement
- Lack of competition
- High contract value
- Specialized manufacturing
Positive Signals
- Critical national security component
- Ensures naval readiness
- Supports advanced manufacturing
Sector Analysis
This contract falls within the defense manufacturing sector, specifically focusing on nuclear components. Spending benchmarks for such highly specialized, sole-source defense contracts are difficult to establish due to their unique nature and limited market.
Small Business Impact
This contract does not appear to involve small businesses as prime contractors. The specialized nature of naval reactor core manufacturing typically requires large, established firms with extensive experience and security clearances, limiting opportunities for small business participation.
Oversight & Accountability
The Department of Energy's oversight is crucial for managing this sole-source contract. Ensuring adherence to the fixed-price incentive terms, quality control, and timely delivery is paramount to protect taxpayer interests and national security.
Related Government Programs
- Plate Work Manufacturing
- Department of Energy Contracting
- Department of Energy Programs
Risk Flags
- Sole-source award limits competitive pricing.
- High reliance on a single contractor.
- Potential for cost escalation over contract duration.
- Lack of transparency in pricing due to non-competitive nature.
- Specialized manufacturing may have limited surge capacity.
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 $132.9 million to BWXT NUCLEAR OPERATIONS GROUP, INC.. MANUFATURE OF NAVAL 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 $132.9 million.
What is the period of performance?
Start: 2014-01-24. End: 2019-05-15.
What is the justification for the sole-source award, and what measures are in place to ensure fair pricing?
The sole-source award is likely justified by the unique, highly specialized, and classified nature of naval reactor core manufacturing, requiring specific expertise and security clearances not widely available. To mitigate pricing risks, a Fixed Price Incentive (FPI) contract was used, which aims to share cost risks between the government and contractor, incentivizing the contractor to control costs to achieve a target profit.
What are the long-term risks associated with relying on a single supplier for such a critical component?
Long-term reliance on a single supplier for naval reactor cores presents significant risks, including potential supply chain disruptions, lack of innovation due to absent competition, and vulnerability if the supplier faces financial or operational difficulties. This dependence could also lead to escalating costs over time as the supplier faces less pressure to optimize efficiency or offer competitive pricing.
How does this contract contribute to the overall effectiveness and readiness of the U.S. Navy's nuclear fleet?
This contract is directly essential for the operational effectiveness and readiness of the U.S. Navy's nuclear-powered fleet. By ensuring the manufacture and supply of reactor cores, it underpins the sustained power generation for submarines and aircraft carriers, which are critical assets for national defense and global power projection.
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: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE (L)
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, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $520,579,229
Exercised Options: $132,947,383
Current Obligation: $132,947,383
Contract Characteristics
Cost or Pricing Data: YES
Timeline
Start Date: 2014-01-24
Current End Date: 2019-05-15
Potential End Date: 2022-03-31 00:00:00
Last Modified: 2014-07-09
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