DOE awards $271M contract for Savannah River mission completion, focusing on tank and ancillary facilities closure

Contract Overview

Contract Amount: $271,367,560 ($271.4M)

Contractor: Savannah River Mission Completion, LLC

Awarding Agency: Department of Energy

Start Date: 2023-10-01

End Date: 2031-10-26

Contract Duration: 2,947 days

Daily Burn Rate: $92.1K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Other

Official Description: THIS AWARD IS FOR THE SAVANNAH RIVER INTEGRATED MISSION COMPLETION CONTRACT - TASK ORDER 7 (TANK AND ANCILLARY FACILITIES CLOSURE).

Place of Performance

Location: AIKEN, AIKEN County, SOUTH CAROLINA, 29802

State: South Carolina Government Spending

Plain-Language Summary

Department of Energy obligated $271.4 million to SAVANNAH RIVER MISSION COMPLETION, LLC for work described as: THIS AWARD IS FOR THE SAVANNAH RIVER INTEGRATED MISSION COMPLETION CONTRACT - TASK ORDER 7 (TANK AND ANCILLARY FACILITIES CLOSURE). Key points: 1. The contract's cost-plus-incentive-fee structure aims to align contractor performance with government objectives, potentially driving efficiency. 2. Full and open competition suggests a robust market for remediation services, likely leading to competitive pricing. 3. The long duration of the contract (over 8 years) necessitates careful monitoring of performance and cost escalation. 4. This award is part of a larger, ongoing effort to manage and close out legacy nuclear materials at Savannah River. 5. The specific focus on tank and ancillary facilities closure indicates a critical phase in the site's environmental remediation.

Value Assessment

Rating: good

The contract value of $271.4 million over approximately 8 years suggests a significant investment in environmental remediation. Benchmarking against similar large-scale nuclear site cleanup contracts is essential to fully assess value for money. The cost-plus-incentive-fee (CPIF) pricing structure, while common in complex projects, requires diligent oversight to ensure costs remain controlled and incentives are effectively utilized. Without specific cost breakdowns or comparable project data, a definitive value assessment is challenging, but the scale indicates a substantial commitment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple qualified vendors had the opportunity to bid. This approach typically fosters a competitive environment, encouraging bidders to offer their best pricing and technical solutions. The number of bidders is not specified, but the open competition suggests a healthy market for these specialized remediation services. This process is designed to ensure the government receives competitive proposals and selects the most advantageous offer.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it increases the likelihood of securing services at a competitive price, minimizing potential overspending and maximizing the value derived from public funds.

Public Impact

The primary beneficiaries are the Department of Energy and the public, through the safe and effective closure of nuclear facilities. The services delivered include the closure of tank and ancillary facilities, a critical step in environmental remediation at the Savannah River Site. The geographic impact is concentrated at the Savannah River Site in South Carolina, a major federal facility. Workforce implications include the potential for job creation in specialized fields such as environmental engineering, construction, and hazardous material handling.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long-term nature of the contract requires sustained oversight to prevent cost overruns.
Complexity of nuclear remediation tasks introduces inherent technical and safety risks.
Reliance on incentive fees necessitates careful performance metric definition and monitoring.

Positive Signals

Awarded through full and open competition, suggesting competitive pricing and a robust vendor pool.
Cost-plus-incentive-fee structure can incentivize efficient performance and cost control.
Focus on a specific, critical phase (tank closure) indicates progress in a long-term environmental mission.

Sector Analysis

This contract falls within the Environmental Remediation and Waste Management sector, a critical area for government agencies managing legacy industrial and defense sites. The market for these services is specialized, involving companies with expertise in hazardous materials handling, engineering, and regulatory compliance. The Department of Energy, in particular, is a major procurer in this sector due to the extensive cleanup requirements at sites like Savannah River. Comparable spending benchmarks would involve other large-scale environmental cleanup contracts awarded by DOE and the Department of Defense.

Small Business Impact

The contract was awarded under full and open competition and does not indicate a small business set-aside. While the prime contractor is Savannah River Mission Completion, LLC, the contract terms and value suggest significant subcontracting opportunities may exist. It is crucial to assess whether the prime contractor has robust plans for engaging small businesses as subcontractors to ensure broader economic impact and compliance with federal small business utilization goals.

Oversight & Accountability

Oversight for this contract will primarily reside with the Department of Energy, likely through its various program offices and contracting officers. Accountability measures will be embedded within the Cost Plus Incentive Fee (CPIF) structure, linking contractor payment to performance against defined metrics. Transparency will be facilitated through contract reporting requirements and potentially through public-facing DOE environmental reports. The Inspector General's office for the Department of Energy would have jurisdiction for audits and investigations into potential fraud, waste, or abuse.

Related Government Programs

Savannah River Site Operations
Department of Energy Environmental Management
Nuclear Site Cleanup Contracts
Hazardous Waste Remediation Services
Legacy Nuclear Site Closure

Risk Flags

Long-term contract duration requires sustained oversight.
Complexity of nuclear remediation tasks poses inherent risks.
CPIF structure necessitates clear performance metrics and monitoring.

Frequently Asked Questions

What is this federal contract paying for?

Department of Energy awarded $271.4 million to SAVANNAH RIVER MISSION COMPLETION, LLC. THIS AWARD IS FOR THE SAVANNAH RIVER INTEGRATED MISSION COMPLETION CONTRACT - TASK ORDER 7 (TANK AND ANCILLARY FACILITIES CLOSURE).

Who is the contractor on this award?

The obligated recipient is SAVANNAH RIVER MISSION COMPLETION, LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $271.4 million.

What is the period of performance?

Start: 2023-10-01. End: 2031-10-26.

What is the historical spending pattern for similar remediation services at the Savannah River Site?

Historical spending at the Savannah River Site for remediation services has been substantial, reflecting the complexity and long-term nature of environmental cleanup efforts. Prior contracts have addressed various aspects, including waste management, decontamination, and demolition of legacy facilities. For instance, previous phases of the integrated mission completion have involved significant financial commitments over many years. Analyzing the trend of spending on tank and ancillary facilities closure specifically, and comparing it to the current $271 million award, can provide context on the scale and pace of the ongoing remediation efforts. This historical data is crucial for understanding cost trends, identifying potential efficiencies, and ensuring the current contract represents a reasonable investment relative to past expenditures.

How does the pricing structure (Cost Plus Incentive Fee) compare to other large-scale environmental remediation contracts?

The Cost Plus Incentive Fee (CPIF) structure is a common pricing model for complex, high-risk projects where the final cost is uncertain, such as large-scale environmental remediation. Under CPIF, the contractor is reimbursed for allowable costs plus a fixed fee, with the fee adjusted based on performance against pre-defined targets (e.g., cost, schedule, technical performance). This contrasts with fixed-price contracts, which offer less flexibility for unforeseen issues, or Cost Plus Award Fee (CPAF), where the award amount is more subjective. CPIF aims to incentivize efficiency and cost control by sharing potential savings or overruns between the government and the contractor. Its suitability depends on the ability to establish clear, measurable performance metrics that accurately reflect project success and align contractor incentives with government objectives.

What are the key performance indicators (KPIs) used to manage this contract and incentivize the contractor?

While specific KPIs are not detailed in the provided data, a Cost Plus Incentive Fee (CPIF) contract typically utilizes a range of performance metrics. For environmental remediation, these KPIs often include adherence to safety protocols (e.g., incident rates, compliance with hazardous material handling standards), environmental compliance (e.g., emissions, waste disposal), project schedule milestones (e.g., completion of specific closure phases), and cost control. The incentive fee is usually tied to achieving or exceeding targets in these areas. For example, the contractor might earn a higher fee for completing closure activities ahead of schedule or under a certain cost threshold, while facing a reduced fee for delays or safety violations. Effective KPIs must be objective, measurable, and directly linked to the contract's overall goals for successful mission completion.

What is the track record of Savannah River Mission Completion, LLC in managing similar large-scale federal contracts?

Savannah River Mission Completion, LLC (SRMC) is a joint venture specifically formed to manage the Savannah River Site's integrated mission completion. Its track record is intrinsically linked to the experience and capabilities of its parent companies, which typically include established players in the government contracting and environmental services sectors. A thorough assessment would involve examining the past performance of these parent entities on comparable Department of Energy or Department of Defense contracts, particularly those involving nuclear site cleanup, waste management, and facility deactivation. Evaluating their history of safety performance, cost control, schedule adherence, and stakeholder engagement on similar projects is crucial for understanding SRMC's likely performance under this new award.

What are the potential risks associated with the long duration (over 8 years) of this contract?

The extended duration of this contract presents several potential risks. Firstly, there is the risk of cost escalation due to inflation, changes in regulatory requirements, or unforeseen technical challenges that may arise over an eight-year period. Secondly, maintaining consistent oversight and performance management over such a long timeframe can be challenging for the contracting agency, potentially leading to a decline in vigilance. Thirdly, the contractor's workforce and institutional knowledge may fluctuate, impacting project continuity and efficiency. Finally, technological advancements or shifts in environmental policy could necessitate contract modifications, adding complexity and potential cost increases. Robust contract management, regular performance reviews, and adaptive planning are essential to mitigate these long-term risks.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Remediation and Other Waste Management Services › Remediation Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: COST PLUS INCENTIVE FEE (V)

Evaluated Preference: NONE

Contractor Details

Address: 109 RAMSEY PL, LYNCHBURG, VA, 24501

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $1,032,582,997

Exercised Options: $1,032,582,997

Current Obligation: $271,367,560

Actual Outlays: $230,565,214

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 89303322DEM000068

IDV Type: IDC

Timeline