DOE Awards $3.17 Billion Pantex Plant Management Contract to Pantexas Deterrence, LLC
Contract Overview
Contract Amount: $3,173,561,013 ($3.2B)
Contractor: Pantexas Deterrence, LLC
Awarding Agency: Department of Energy
Start Date: 2024-06-13
End Date: 2029-11-14
Contract Duration: 1,980 days
Daily Burn Rate: $1.6M/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 4
Pricing Type: COST PLUS AWARD FEE
Sector: Other
Official Description: CONTRACT 89233224CNA000004 FOR THE MANAGEMENT AND OPERATION OF THE PANTEX PLANT
Place of Performance
Location: AMARILLO, POTTER County, TEXAS, 79120
State: Texas Government Spending
Plain-Language Summary
Department of Energy obligated $3.17 billion to PANTEXAS DETERRENCE, LLC for work described as: CONTRACT 89233224CNA000004 FOR THE MANAGEMENT AND OPERATION OF THE PANTEX PLANT Key points: 1. The contract is for facilities support services at the Pantex Plant. 2. This is a significant award for the facilities support services sector. 3. The contract has a duration of 1980 days. 4. The awardee is Pantexas Deterrence, LLC. 5. The contract type is Cost Plus Award Fee.
Value Assessment
Rating: questionable
The contract is a Cost Plus Award Fee type, which can lead to higher costs if not managed carefully. Benchmarking against similar large-scale facility management contracts is difficult due to the specialized nature of nuclear weapons facilities.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded through full and open competition, suggesting a robust price discovery process. However, the Cost Plus Award Fee structure means the final price is not fixed and depends on performance.
Taxpayer Impact: Taxpayer funds are committed to a long-term contract for a critical national security facility. The Cost Plus Award Fee structure necessitates close oversight to ensure cost efficiency.
Public Impact
Ensures continued operation and management of the Pantex Plant, a key national security asset. Supports jobs in Amarillo, Texas, and related supply chains. The contract's performance incentives will drive operational efficiency and safety. Long-term commitment of significant federal funds for specialized services.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Award Fee structure requires diligent oversight to control costs.
- Specialized nature of Pantex operations may limit direct cost comparisons.
- Contract duration of nearly 5.5 years presents long-term financial commitment.
Positive Signals
- Awarded through full and open competition.
- Focus on performance incentives for operational excellence.
- Secures critical national security infrastructure management.
Sector Analysis
This contract falls under Facilities Support Services, a broad category encompassing the management and operation of complex facilities. The Pantex Plant's unique role in nuclear weapons management means spending benchmarks are highly specialized and not directly comparable to standard facility management contracts.
Small Business Impact
The data provided does not indicate any specific set-asides for small businesses. Given the scale and specialized nature of the Pantex Plant operations, it is likely that the prime contractor will subcontract for various services, potentially creating opportunities for small businesses.
Oversight & Accountability
The Cost Plus Award Fee contract type requires robust oversight from the Department of Energy to ensure that costs are reasonable and that award fees are justified by performance. Regular audits and performance reviews will be crucial for accountability.
Related Government Programs
- Facilities Support Services
- Department of Energy Contracting
- Department of Energy Programs
Risk Flags
- Cost Plus Award Fee structure
- Long contract duration
- Specialized nature of facility
- Potential for cost overruns
- Reliance on contractor performance for cost control
Tags
facilities-support-services, department-of-energy, tx, definitive-contract, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $3.17 billion to PANTEXAS DETERRENCE, LLC. CONTRACT 89233224CNA000004 FOR THE MANAGEMENT AND OPERATION OF THE PANTEX PLANT
Who is the contractor on this award?
The obligated recipient is PANTEXAS DETERRENCE, LLC.
Which agency awarded this contract?
Awarding agency: Department of Energy (Department of Energy).
What is the total obligated amount?
The obligated amount is $3.17 billion.
What is the period of performance?
Start: 2024-06-13. End: 2029-11-14.
What is the expected cost efficiency of the Cost Plus Award Fee structure for this specialized facility?
The Cost Plus Award Fee (CPA) structure aims to incentivize performance while covering costs. For specialized facilities like Pantex, efficiency hinges on clearly defined award criteria and rigorous DOE oversight. Without detailed performance metrics and transparent cost tracking, there's a risk of cost overruns. Benchmarking against similar, highly specialized government contracts is challenging, making independent cost validation critical.
What are the primary risks associated with the long-term management of the Pantex Plant under this contract?
Key risks include potential cost escalation due to the CPA structure, operational disruptions impacting national security, and challenges in attracting and retaining specialized personnel. The long duration also increases exposure to evolving technological requirements and regulatory changes. Ensuring robust risk management plans and contingency measures are in place is paramount for sustained operational integrity.
How effectively will the performance incentives drive operational improvements and taxpayer value?
The effectiveness of performance incentives depends entirely on the clarity, measurability, and alignment of the award fee criteria with desired outcomes like safety, efficiency, and mission accomplishment. If well-defined and rigorously applied, they can drive significant improvements and ensure taxpayer value. Conversely, poorly structured incentives could lead to unintended consequences or fail to yield expected benefits.
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: 89233222RNA000004
Offers Received: 4
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Address: 800 MAIN ST, LYNCHBURG, VA, 24504
Business Categories: Category Business, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $30,103,600,000
Exercised Options: $6,456,000,000
Current Obligation: $3,173,561,013
Actual Outlays: $1,625,395,790
Subaward Activity
Number of Subawards: 948
Total Subaward Amount: $316,104,987
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2024-06-13
Current End Date: 2029-11-14
Potential End Date: 2044-11-14 00:00:00
Last Modified: 2026-03-30
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