DOE awards $185.7M contract for enriched uranium conversion and purification services to Nuclear Fuel Services Inc
Contract Overview
Contract Amount: $185,699,873 ($185.7M)
Contractor: Nuclear Fuel Services Inc
Awarding Agency: Department of Energy
Start Date: 2023-04-10
End Date: 2028-04-09
Contract Duration: 1,826 days
Daily Burn Rate: $101.7K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: ENRICHED URANIUM CONVERSION AND PURIFICATION SERVICES
Place of Performance
Location: ERWIN, UNICOI County, TENNESSEE, 37650
Plain-Language Summary
Department of Energy obligated $185.7 million to NUCLEAR FUEL SERVICES INC for work described as: ENRICHED URANIUM CONVERSION AND PURIFICATION SERVICES Key points: 1. The contract is for essential nuclear fuel services, a critical component of energy production. 2. Nuclear Fuel Services Inc. is the sole provider for this specialized service, indicating a lack of direct competition. 3. The significant value of the contract warrants close scrutiny of its pricing and necessity. 4. The services fall under the 'Other Basic Inorganic Chemical Manufacturing' sector, with potential implications for energy independence and national security.
Value Assessment
Rating: questionable
The contract value of $185.7 million over five years is substantial. Without competitive bidding, it is difficult to assess if this price represents fair market value for enriched uranium conversion and purification services.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, meaning Nuclear Fuel Services Inc. was the only entity considered. This lack of competition limits price discovery and may result in a higher cost to the government.
Taxpayer Impact: The absence of competition for a critical service like uranium conversion raises concerns about potential overspending and the efficient use of taxpayer funds.
Public Impact
Ensures continued operation of nuclear power plants by providing essential fuel components. Supports national energy policy and potentially reduces reliance on foreign sources for nuclear fuel. The sole-source nature of the award could impact the long-term development of a competitive market for these services.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition and price discovery.
- High contract value requires justification for lack of competition.
- Potential for price escalation without competitive pressure.
Positive Signals
- Ensures critical supply chain for nuclear energy.
- Long-term contract provides stability for service provider and government.
Sector Analysis
This contract falls within the 'Other Basic Inorganic Chemical Manufacturing' sector, specifically related to nuclear fuel processing. Benchmarking spending in this niche sector is challenging due to its specialized nature and limited number of providers.
Small Business Impact
The data indicates that small businesses were not involved in this specific contract award. The specialized nature of enriched uranium conversion and purification services may present barriers to entry for smaller firms.
Oversight & Accountability
Given the sole-source nature of this contract, robust oversight is crucial to ensure the government is receiving fair value and that the services are performed effectively and efficiently. The Department of Energy's contracting office is responsible for this oversight.
Related Government Programs
- Other Basic Inorganic Chemical Manufacturing
- Department of Energy Contracting
- Department of Energy Programs
Risk Flags
- Sole-source award
- Lack of competitive pricing
- High contract value
- Critical infrastructure reliance
- Potential for price escalation
Tags
other-basic-inorganic-chemical-manufactu, department-of-energy, tn, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $185.7 million to NUCLEAR FUEL SERVICES INC. ENRICHED URANIUM CONVERSION AND PURIFICATION 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 $185.7 million.
What is the period of performance?
Start: 2023-04-10. End: 2028-04-09.
What is the justification for awarding this contract on a sole-source basis, and what steps were taken to ensure the price is fair and reasonable?
The justification for a sole-source award typically involves a determination that only one responsible source can provide the required supplies or services. For enriched uranium conversion and purification, this might be due to unique capabilities, proprietary technology, or national security considerations. The agency should have conducted a price analysis, comparing the proposed price to historical prices, other government contracts, or commercial prices, to ensure fairness and reasonableness despite the lack of competition.
What are the risks associated with relying on a single provider for such a critical national security and energy component?
Relying on a sole-source provider for critical components like enriched uranium carries significant risks. These include potential supply chain disruptions if the provider faces operational issues, lack of incentive for innovation or cost reduction, and vulnerability to price gouging. Furthermore, it hinders the development of a competitive market, potentially leading to higher costs in the future and reduced national security resilience if the sole provider's capabilities degrade or are compromised.
How does this contract contribute to the Department of Energy's broader mission regarding energy security and nuclear non-proliferation?
This contract is vital for maintaining the operational readiness of the U.S. nuclear power fleet, contributing directly to energy security by ensuring a stable supply of electricity. It also plays a role in nuclear non-proliferation by managing and processing enriched uranium, ensuring it is used for peaceful energy purposes under strict government oversight. The services provided are foundational to the civilian nuclear energy program.
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: 89233122RNA000132
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: $428,560,690
Exercised Options: $428,560,690
Current Obligation: $185,699,873
Actual Outlays: $185,102,338
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2023-04-10
Current End Date: 2028-04-09
Potential End Date: 2028-04-09 00:00:00
Last Modified: 2025-12-03
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