DOE's $1.49B Savannah River Lab M&O Contract Awarded to Battelle Savannah River Alliance
Contract Overview
Contract Amount: $1,490,042,697 ($1.5B)
Contractor: Battelle Savannah River Alliance, LLC
Awarding Agency: Department of Energy
Start Date: 2021-02-16
End Date: 2030-02-15
Contract Duration: 3,286 days
Daily Burn Rate: $453.5K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: COST PLUS AWARD FEE
Sector: R&D
Official Description: SAVANNAH RIVER NATIONAL LABORATORY MANAGEMENT AND OPERATING (M&O) CONTRACT
Place of Performance
Location: AIKEN, AIKEN County, SOUTH CAROLINA, 29803
Plain-Language Summary
Department of Energy obligated $1.49 billion to BATTELLE SAVANNAH RIVER ALLIANCE, LLC for work described as: SAVANNAH RIVER NATIONAL LABORATORY MANAGEMENT AND OPERATING (M&O) CONTRACT Key points: 1. Contract awarded through full and open competition, suggesting a robust market evaluation. 2. The contract type, Cost Plus Award Fee (CPAF), incentivizes performance but requires careful oversight of costs. 3. The duration of the contract (over 9 years) indicates a long-term strategic investment in research and development. 4. The primary NAICS code (541715) points to significant spending in physical, engineering, and life sciences R&D. 5. The contract's value places it among substantial federal investments in national laboratory operations. 6. No small business set-aside was utilized, indicating the scale and nature of the services required.
Value Assessment
Rating: good
The contract's value of approximately $1.49 billion over its term is substantial for a management and operating contract for a national laboratory. Benchmarking this against similar M&O contracts requires detailed analysis of scope and services, but the competitive award process suggests a fair market price was sought. The Cost Plus Award Fee structure allows for performance-based incentives, which can drive value if managed effectively, but also necessitates rigorous oversight to control costs and ensure efficient resource allocation.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, indicating that multiple capable bidders were likely solicited and evaluated. The presence of three bidders (no=3) suggests a competitive landscape for managing major national laboratories. This level of competition is generally favorable for price discovery and ensuring the government receives competitive proposals.
Taxpayer Impact: Full and open competition typically leads to better value for taxpayers by fostering a competitive environment that drives down costs and encourages innovation from bidders.
Public Impact
The primary beneficiary is the Department of Energy, which secures management and operational services for a critical national laboratory. The contract supports advanced research and development in physical, engineering, and life sciences, contributing to national scientific and technological advancement. The geographic impact is centered in South Carolina, where the Savannah River National Laboratory is located, potentially supporting the regional economy and workforce. Workforce implications include the employment of scientists, engineers, technicians, and support staff at the laboratory.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns inherent in Cost Plus Award Fee contracts if not closely monitored.
- Ensuring consistent research quality and output across the long contract duration.
- Managing the transition of operations and personnel effectively.
- Maintaining cybersecurity and data integrity for sensitive research.
- Addressing potential environmental, safety, and health risks associated with laboratory operations.
Positive Signals
- Awarded through full and open competition, indicating a competitive process.
- Performance incentives in the CPAF structure can drive efficiency and effectiveness.
- Long contract duration provides stability for critical research programs.
- The contractor has a significant role in managing a key national laboratory.
- Focus on R&D aligns with national strategic priorities.
Sector Analysis
This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences. The market for managing national laboratories is specialized, often involving large, established research institutions or consortia. The value of this contract is significant, reflecting the scale and complexity of operating a national laboratory. Comparable spending benchmarks would involve other M&O contracts for national labs, which are typically multi-billion dollar, long-term agreements.
Small Business Impact
The contract was not awarded as a small business set-aside, which is typical for large-scale management and operating contracts of this nature. The prime contractor, Battelle Savannah River Alliance, LLC, is likely a large entity. Subcontracting opportunities for small businesses may exist within the scope of the laboratory's operations, but specific set-aside goals are not indicated in the provided data. The impact on the small business ecosystem would depend on the subcontracting plans developed by the prime contractor.
Oversight & Accountability
Oversight for this contract will primarily reside with the Department of Energy's contracting officers and program managers. The Cost Plus Award Fee structure necessitates robust performance monitoring and evaluation to determine award fees. Transparency is generally maintained through contract reporting requirements and public disclosures related to federal spending. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse related to the contract.
Related Government Programs
- National Laboratory Management and Operating Contracts
- Department of Energy Research and Development Programs
- Science and Technology Infrastructure Investments
- Advanced Materials Research
- Nuclear Energy Research
Risk Flags
- Cost Overrun Risk (CPAF)
- Performance Measurement Complexity
- Long-Term Contract Stability
- Cybersecurity Threats
- Environmental, Safety, and Health Compliance
Tags
department-of-energy, savannah-river-national-laboratory, management-and-operating, research-and-development, cost-plus-award-fee, full-and-open-competition, definitive-contract, south-carolina, large-contract, national-laboratory
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $1.49 billion to BATTELLE SAVANNAH RIVER ALLIANCE, LLC. SAVANNAH RIVER NATIONAL LABORATORY MANAGEMENT AND OPERATING (M&O) CONTRACT
Who is the contractor on this award?
The obligated recipient is BATTELLE SAVANNAH RIVER ALLIANCE, LLC.
Which agency awarded this contract?
Awarding agency: Department of Energy (Department of Energy).
What is the total obligated amount?
The obligated amount is $1.49 billion.
What is the period of performance?
Start: 2021-02-16. End: 2030-02-15.
What is the track record of Battelle Savannah River Alliance, LLC in managing similar large-scale research facilities?
Battelle Memorial Institute, the parent organization of Battelle Savannah River Alliance, LLC, has extensive experience managing national laboratories and research facilities for various government agencies, including the Department of Energy. They have historically managed significant M&O contracts, demonstrating a capacity for large-scale operations, scientific research oversight, and project management. Specific performance metrics and past award fee determinations for Battelle's previous M&O contracts would provide a more granular assessment of their track record. However, their long-standing presence in managing DOE facilities suggests a proven ability to meet the complex requirements of such roles.
How does the awarded value compare to previous M&O contracts for the Savannah River National Laboratory?
The awarded value of approximately $1.49 billion over roughly 9 years (3286 days) for the Savannah River National Laboratory Management and Operating contract represents a significant investment. To compare this to previous contracts, one would need historical data on the value and duration of prior M&O agreements for SRNL. Typically, M&O contracts are long-term and can be recompeted or extended. If previous contracts were of similar duration and scope, this award suggests a consistent level of federal investment in the laboratory's operations. Fluctuations in value could be attributed to changes in research priorities, inflation, or the scope of work defined in the new contract.
What are the primary risk indicators associated with this Cost Plus Award Fee (CPAF) contract?
The primary risk indicator for a CPAF contract is the potential for cost growth if performance targets are aggressively pursued without commensurate cost control. While the award fee incentivizes good performance, the 'cost plus' element means the government reimburses allowable costs. Therefore, robust oversight is crucial to ensure costs are reasonable and allocable. Other risks include contractor performance not meeting award fee criteria, leading to reduced contractor motivation, or potential disputes over cost allowability or performance evaluations. Ensuring clear, measurable performance metrics and transparent evaluation processes are key to mitigating these risks.
How effective is the Cost Plus Award Fee (CPAF) structure in ensuring program effectiveness for national laboratories?
The CPAF structure is designed to enhance program effectiveness by linking a portion of the contractor's profit to achieving specific performance objectives. For national laboratories, this can incentivize efficient operations, successful research outcomes, and adherence to safety and security standards. The 'award' portion provides a financial incentive for exceeding baseline requirements. However, the effectiveness hinges on the clarity and measurability of the performance criteria. If metrics are poorly defined or difficult to assess, the incentive may be weak or lead to unintended consequences. Rigorous performance monitoring by the government is essential to ensure the CPAF structure truly drives desired outcomes and maintains program effectiveness.
What are the historical spending patterns for management and operating contracts at the Savannah River National Laboratory?
Historical spending patterns for M&O contracts at the Savannah River National Laboratory would typically show consistent, substantial annual outlays reflecting the operational costs and research funding for a major federal laboratory. These contracts are usually multi-year and represent a significant portion of the Department of Energy's budget allocated to laboratory infrastructure and scientific endeavors. Analyzing past contract values, durations, and any modifications would reveal trends in federal investment, potential shifts in research focus, and the competitive landscape over time. Without specific historical data, it's assumed that spending has been substantial and relatively stable, reflecting the ongoing importance of SRNL's mission.
What is the potential impact of this contract on the local South Carolina economy?
This contract is expected to have a significant positive impact on the local economy in South Carolina. As a large management and operating contract for a national laboratory, it directly supports a substantial workforce of scientists, engineers, technicians, and administrative staff. This employment generates direct economic activity through wages and salaries. Furthermore, the laboratory's operations require goods and services from local suppliers and vendors, creating indirect economic benefits. The presence of a major research institution also fosters innovation and can attract related businesses and talent to the region, contributing to long-term economic development.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)
Product/Service Code: RESEARCH AND DEVELOPMENT › General Science and Technology R&D Services
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: 89303320REM000063
Offers Received: 3
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, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $3,550,000,000
Exercised Options: $3,550,000,000
Current Obligation: $1,490,042,697
Actual Outlays: $1,123,291,904
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2021-02-16
Current End Date: 2030-02-15
Potential End Date: 2031-02-15 00:00:00
Last Modified: 2026-03-23
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