DOE's $34.6B Los Alamos contract awarded to Triad National Security, LLC, for facilities support services

Contract Overview

Contract Amount: $34,596,728,011 ($34.6B)

Contractor: Triad National Security, LLC

Awarding Agency: Department of Energy

Start Date: 2018-06-08

End Date: 2028-10-31

Contract Duration: 3,798 days

Daily Burn Rate: $9.1M/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: COST PLUS AWARD FEE

Sector: Other

Official Description: IGF::CL::IGF COMPETITION FOR MANAGEMENT AND OPERATION OF LOS ALAMOS NATIONAL LABORATORY

Place of Performance

Location: LOS ALAMOS, LOS ALAMOS County, NEW MEXICO, 87545

State: New Mexico Government Spending

Plain-Language Summary

Department of Energy obligated $34.60 billion to TRIAD NATIONAL SECURITY, LLC for work described as: IGF::CL::IGF COMPETITION FOR MANAGEMENT AND OPERATION OF LOS ALAMOS NATIONAL LABORATORY Key points: 1. The contract represents a significant investment in national security infrastructure and scientific research. 2. Competition dynamics for this large-scale, specialized facility management are complex, potentially limiting broad market participation. 3. Performance risk is mitigated through an award fee structure, incentivizing contractor success. 4. The contract duration suggests a long-term commitment to maintaining critical national laboratory operations. 5. Sector positioning is within essential government services, specifically focused on managing high-security research facilities.

Value Assessment

Rating: good

The contract's value of over $34 billion over its term is substantial, reflecting the critical nature of Los Alamos National Laboratory. Benchmarking this specific contract is challenging due to its unique scope and the specialized expertise required. However, the cost-plus award fee structure allows for performance-based adjustments, suggesting an effort to ensure value for money. The initial award amount and the potential for adjustments indicate a focus on achieving mission objectives efficiently.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through full and open competition, indicating that multiple bidders were likely considered. The presence of four bidders suggests a competitive process, though the specialized nature of managing a national laboratory may limit the pool of qualified entities. The competition level is expected to drive price discovery and ensure a reasonable offer, but the ultimate cost is heavily influenced by the complex requirements and the cost-plus award fee structure.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it aims to secure the best value through a robust bidding process. The participation of multiple bidders suggests that taxpayer funds are being allocated through a structured and competitive environment, rather than a sole-source arrangement.

Public Impact

The primary beneficiaries are the Department of Energy and the National Nuclear Security Administration, ensuring the continued operation and advancement of national security research. Services delivered include the management and operation of facilities, research and development support, and national security programs. The geographic impact is centered in Los Alamos, New Mexico, supporting the local economy and workforce. Workforce implications include the employment of a large number of scientists, engineers, technicians, and support staff, many of whom are highly specialized.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Complexity of managing a national laboratory with diverse missions.
Potential for cost overruns inherent in cost-plus contracts.
Ensuring consistent performance across a wide range of scientific and operational activities.
Maintaining security and safety standards in a high-risk environment.

Positive Signals

Award fee structure incentivizes performance and efficiency.
Full and open competition suggests a competitive process for selecting the contractor.
Long contract duration provides stability for critical operations.
Contractor's experience in managing complex facilities is likely a key factor.

Sector Analysis

The management and operation of national laboratories fall within the broader 'Facilities Support Services' sector, but with a highly specialized focus on scientific research, national security, and nuclear stewardship. This contract is a prime example of government contracting for mission-critical, high-security operations. Comparable spending benchmarks are difficult to establish due to the unique nature of Los Alamos, but the scale of this contract underscores the significant investment required for such facilities.

Small Business Impact

This contract does not appear to have a specific small business set-aside component, as indicated by 'sb: false'. The prime contractor, Triad National Security, LLC, is a large entity. However, large federal contracts often have subcontracting requirements that can provide opportunities for small businesses to participate in delivering specialized services or goods. The extent of small business subcontracting will be a key factor in assessing the impact on the small business ecosystem.

Oversight & Accountability

Oversight is primarily conducted by the Department of Energy, specifically the National Nuclear Security Administration (NNSA). The contract's cost-plus award fee structure inherently includes performance monitoring and evaluation to determine award fee payments. Transparency is facilitated through federal contract databases and reporting requirements. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse related to the contract.

Related Government Programs

National Nuclear Security Administration Operations
Department of Energy Research and Development Contracts
Management and Operating Contracts
National Laboratory Support Services

Risk Flags

Contract awarded through full and open competition.
Cost Plus Award Fee contract type.
Long contract duration.
Management of critical national laboratory facilities.

Frequently Asked Questions

What is this federal contract paying for?

Department of Energy awarded $34.60 billion to TRIAD NATIONAL SECURITY, LLC. IGF::CL::IGF COMPETITION FOR MANAGEMENT AND OPERATION OF LOS ALAMOS NATIONAL LABORATORY

Who is the contractor on this award?

The obligated recipient is TRIAD NATIONAL SECURITY, LLC.

Which agency awarded this contract?

Awarding agency: Department of Energy (Department of Energy).

What is the total obligated amount?

The obligated amount is $34.60 billion.

What is the period of performance?

Start: 2018-06-08. End: 2028-10-31.

What is the historical spending trend for the management and operation of Los Alamos National Laboratory?

Historical spending data for the management and operation of Los Alamos National Laboratory shows a consistent and significant investment over many years. Prior to this $34.6 billion contract awarded in 2018, previous contracts for the laboratory's operation also represented multi-billion dollar commitments. For instance, the preceding contract held by Los Alamos National Security, LLC (a different entity than the current Triad National Security, LLC) also spanned many years and involved substantial funding. The annual expenditure typically ranges in the billions of dollars, reflecting the scale of operations, research, and security requirements. This sustained high level of funding underscores the laboratory's critical role in national security, nuclear deterrence, and scientific discovery, making it a consistent and major component of the Department of Energy's budget.

How does the performance of Triad National Security, LLC compare to previous contractors at Los Alamos?

Direct performance comparisons between Triad National Security, LLC and previous contractors at Los Alamos National Laboratory are complex and require detailed review of performance evaluations and award fee determinations over time. Triad National Security, LLC was awarded this contract following a competitive process, suggesting they met or exceeded the government's criteria at the time of award. The contract utilizes a Cost Plus Award Fee (CPAF) structure, which inherently ties contractor compensation to performance metrics. While specific comparative data on performance metrics like research output, operational efficiency, or safety incidents across different contractor tenures is not readily available in public summaries, the government's continued reliance on competitive bidding for these critical M&O contracts indicates an ongoing assessment of contractor capabilities and performance. The award fee mechanism is designed to incentivize high performance, and its application to Triad would be a key indicator of their success relative to expectations.

What are the primary risks associated with this contract, and how are they being managed?

The primary risks associated with this contract are multifaceted, stemming from the sheer scale and complexity of managing a national laboratory. These include operational risks (e.g., ensuring uninterrupted research, maintaining critical infrastructure), security risks (e.g., safeguarding sensitive materials and information), safety risks (e.g., handling hazardous materials, preventing accidents), and financial risks (e.g., cost overruns, inefficient resource allocation). The Department of Energy manages these risks through stringent oversight, performance-based contract terms (like the award fee structure), rigorous safety and security protocols, and regular audits. The CPAF structure itself is a risk management tool, incentivizing the contractor to control costs and achieve performance targets to earn higher fees. Furthermore, the competitive nature of the initial award process aimed to select a contractor with a proven track record and robust risk mitigation strategies.

What is the projected value of this contract over its full duration, including potential option periods?

The provided data indicates an awarded value of $34,596,728,010.84 for the contract with Triad National Security, LLC. This figure represents the estimated total value over the contract's period of performance, which extends through October 31, 2028. The contract type is 'Cost Plus Award Fee' (CPAF), meaning the total amount paid will consist of allowable costs plus a performance-based award fee. While the $34.6 billion figure is a strong indicator of the expected expenditure, the final amount could fluctuate based on actual costs incurred and the level of performance achieved by the contractor, which directly influences the award fee. The contract duration is approximately 10 years, from June 2018 to October 2028, encompassing the base period and any exercised options, making it a substantial long-term commitment.

How does the competition level for this contract compare to other large federal facilities support service contracts?

The competition level for this contract, described as 'full and open competition' with four bidders, is relatively robust for a contract of this magnitude and specialization. Large federal contracts, especially those requiring highly specialized expertise and security clearances like managing a national laboratory, often face a more limited pool of qualified bidders compared to more common services. While four bidders might be considered moderate in some sectors, for a mission-critical facility of Los Alamos's nature, it suggests a competitive landscape. Many large facilities support contracts, particularly those involving unique national security or scientific missions, can sometimes see fewer than four bidders due to high barriers to entry, such as extensive experience requirements, security infrastructure, and financial capacity. Therefore, the competition here appears to be reasonably healthy, aiming to ensure value despite the inherent complexities.

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: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: DE-SOL-0011206

Offers Received: 4

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Address: 505 KING AVE, COLUMBUS, OH, 43201

Business Categories: Category Business, Limited Liability Corporation, Nonprofit Organization, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $47,835,105,364

Exercised Options: $35,189,504,081

Current Obligation: $34,596,728,011

Actual Outlays: $22,929,615,199

Subaward Activity

Number of Subawards: 7234

Total Subaward Amount: $20,728,175,237

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline