DOE awards $67.5M for Uranium Purification and Conversion Services to Nuclear Fuel Services Inc
Contract Overview
Contract Amount: $67,534,183 ($67.5M)
Contractor: Nuclear Fuel Services Inc
Awarding Agency: Department of Energy
Start Date: 2021-03-01
End Date: 2024-02-29
Contract Duration: 1,095 days
Daily Burn Rate: $61.7K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Energy
Official Description: URANIUM PURIFICATION AND CONVERSION SERVICES
Place of Performance
Location: ERWIN, UNICOI County, TENNESSEE, 37650
Plain-Language Summary
Department of Energy obligated $67.5 million to NUCLEAR FUEL SERVICES INC for work described as: URANIUM PURIFICATION AND CONVERSION SERVICES Key points: 1. Significant contract value for specialized chemical manufacturing. 2. Sole-source award raises questions about competition and potential cost savings. 3. Risk associated with reliance on a single provider for critical nuclear fuel services. 4. Sector: Energy (Nuclear Fuel Cycle).
Value Assessment
Rating: questionable
The contract value of $67.5M over three years for specialized uranium services is substantial. Without competitive bidding, it's difficult to assess if this price represents fair market value compared to similar, albeit rare, purification and conversion contracts.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers as there was no market pressure to drive down the price.
Taxpayer Impact: The lack of competition may result in taxpayers paying a premium for these essential nuclear fuel services.
Public Impact
Ensures continued supply of purified uranium for national energy needs. Supports the nuclear energy sector and associated jobs. Potential for increased costs due to sole-source nature impacts energy affordability.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Potential for cost overruns
Positive Signals
- Essential service provision
- Long-term contract duration
Sector Analysis
This contract falls within the 'Other Basic Inorganic Chemical Manufacturing' sector, specifically related to the nuclear fuel cycle. The market for uranium purification and conversion is highly specialized and often dominated by a few key players, making competitive bidding challenging.
Small Business Impact
The data indicates this contract was not awarded to small businesses. The specialized nature of uranium purification and conversion services typically requires significant infrastructure and expertise, which are more commonly found in larger, established companies.
Oversight & Accountability
The Department of Energy is responsible for overseeing this contract. Given the sole-source nature, robust oversight is crucial to ensure performance standards are met and costs are managed effectively, despite the absence of competitive pressure.
Related Government Programs
- Other Basic Inorganic Chemical Manufacturing
- Department of Energy Contracting
- Department of Energy Programs
Risk Flags
- Sole-source award limits price competition.
- Potential for higher costs without competitive benchmarking.
- Reliance on a single provider for critical services.
- Lack of transparency in price discovery.
Tags
other-basic-inorganic-chemical-manufactu, department-of-energy, tn, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $67.5 million to NUCLEAR FUEL SERVICES INC. URANIUM PURIFICATION AND CONVERSION SERVICES
Who is the contractor on this award?
The obligated recipient is NUCLEAR FUEL SERVICES INC.
Which agency awarded this contract?
Awarding agency: Department of Energy (Department of Energy).
What is the total obligated amount?
The obligated amount is $67.5 million.
What is the period of performance?
Start: 2021-03-01. End: 2024-02-29.
What is the justification for the sole-source award of this critical uranium processing contract?
The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or the absence of other qualified sources capable of meeting the government's specific requirements within the necessary timeframe. For specialized nuclear services, such justifications are often based on national security or critical infrastructure needs where only one entity can fulfill the demand.
What are the potential risks associated with a sole-source contract for nuclear fuel services?
Sole-source contracts carry inherent risks, including higher costs due to lack of competition, potential for complacency from the contractor regarding performance and innovation, and a lack of market validation for pricing. For nuclear fuel, supply chain disruptions or contractor performance issues could have significant national security and energy supply implications.
How does the firm fixed price (FFP) contract type mitigate risks for the government in this sole-source scenario?
A Firm Fixed Price (FFP) contract shifts the risk of cost overruns to the contractor, which is beneficial for the government, especially in a sole-source situation. While the price isn't negotiated competitively, the FFP structure ensures the government pays a set amount, providing budget certainty and protecting against unexpected cost increases during contract performance.
Industry Classification
NAICS: Manufacturing › Basic Chemical Manufacturing › Other Basic Inorganic Chemical Manufacturing
Product/Service Code: NATURAL RESOURCES MANAGEMENT › NATURAL RESOURCES - OTHER SVCS
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: 89233119RNA000061
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: BWX Technologies, Inc.
Address: 1205 BANNER HILL RD, ERWIN, TN, 37650
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: $67,534,183
Exercised Options: $67,534,183
Current Obligation: $67,534,183
Actual Outlays: $45,756,464
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2021-03-01
Current End Date: 2024-02-29
Potential End Date: 2024-02-29 00:00:00
Last Modified: 2023-03-21
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