DOE awards $1.2B contract for Hanford tank waste operations, continuing existing performance
Contract Overview
Contract Amount: $1,200,702,409 ($1.2B)
Contractor: Hanford Tank Waste Operations & Closure, LLC
Awarding Agency: Department of Energy
Start Date: 2025-02-24
End Date: 2026-09-30
Contract Duration: 583 days
Daily Burn Rate: $2.1M/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: COST PLUS AWARD FEE
Sector: Other
Official Description: THE AWARD CONTINUES PERFORMANCE OF INTEGRATED TANK DISPOSITION CONTRACT VIA THE IMPLEMENTATION TASK ORDER, TO-02.
Place of Performance
Location: RICHLAND, BENTON County, WASHINGTON, 99352
Plain-Language Summary
Department of Energy obligated $1.20 billion to HANFORD TANK WASTE OPERATIONS & CLOSURE, LLC for work described as: THE AWARD CONTINUES PERFORMANCE OF INTEGRATED TANK DISPOSITION CONTRACT VIA THE IMPLEMENTATION TASK ORDER, TO-02. Key points: 1. Contract value of $1.2 billion over its period of performance. 2. Awarded to Hanford Tank Waste Operations & Closure, LLC, a known entity in the sector. 3. Performance is a continuation of integrated tank disposition services. 4. The contract type is Cost Plus Award Fee, incentivizing performance. 5. The contract is for Hazardous Waste Treatment and Disposal services. 6. Geographic focus is Washington state, specifically Hanford. 7. Duration of 583 days indicates a medium-term operational focus.
Value Assessment
Rating: good
The contract value of $1.2 billion for approximately 1.9 years of performance suggests a significant operational scale. Benchmarking against similar large-scale hazardous waste management contracts is challenging without more specific service details. However, the Cost Plus Award Fee structure implies that the government aims to achieve good value by incentivizing efficient and effective performance, with potential for award fees tied to achieving specific metrics. The contractor's existing role suggests a degree of established operational efficiency.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to compete. This process is generally expected to yield competitive pricing and innovative solutions. The specific number of bidders is not provided, but the 'full and open' designation suggests a robust competitive environment was sought.
Taxpayer Impact: Full and open competition is beneficial for taxpayers as it drives down costs through market forces and encourages a wider range of potential providers, leading to better value for public funds.
Public Impact
The primary beneficiaries are the Department of Energy and the public, through the safe management and disposition of hazardous waste at the Hanford site. Services delivered include integrated tank disposition, crucial for environmental protection and site cleanup. The geographic impact is concentrated in Washington state, specifically at the Hanford site. Workforce implications include continued employment for personnel involved in hazardous waste management and site operations.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns inherent in Cost Plus Award Fee contracts if performance targets are not met efficiently.
- Long-term environmental remediation complexities at Hanford could present unforeseen challenges impacting cost and schedule.
- Dependence on a single contractor for critical hazardous waste operations requires robust oversight.
Positive Signals
- Contractor's existing role suggests familiarity with the site and operations, potentially leading to smoother execution.
- Cost Plus Award Fee structure incentivizes contractor performance and efficiency.
- Full and open competition process should foster competitive pricing and service quality.
Sector Analysis
This contract falls within the Environmental Services and Hazardous Waste Management sector, a critical component of government operations, particularly for legacy sites like Hanford. The market for such specialized services is relatively concentrated, with a few large firms possessing the necessary expertise and security clearances. The scale of this award is substantial, reflecting the complexity and volume of hazardous waste at the Hanford site, which is one of the most contaminated sites in the United States.
Small Business Impact
The provided data does not indicate any specific small business set-aside provisions for this contract. However, as a large-scale, complex operation, it is likely that the prime contractor will engage small businesses as subcontractors for specialized services or supplies, contributing to the small business ecosystem. Further analysis would be needed to determine the extent of small business subcontracting.
Oversight & Accountability
Oversight for this contract will likely be managed by the Department of Energy's contracting officers and program managers. Given the critical nature of hazardous waste management, robust oversight mechanisms, including performance monitoring, financial audits, and potentially Inspector General reviews, are expected to be in place to ensure compliance, safety, and accountability. Transparency will depend on the DOE's reporting practices regarding contract performance and expenditures.
Related Government Programs
- Hanford Site Cleanup
- Department of Energy Environmental Management
- Hazardous Waste Treatment and Disposal Services
- Nuclear Site Remediation
Risk Flags
- Potential for cost overruns
- Schedule adherence risks
- Environmental compliance challenges
- Safety risks associated with hazardous materials
Tags
department-of-energy, hazardous-waste-treatment, waste-disposal, hanford-site, washington, cost-plus-award-fee, full-and-open-competition, delivery-order, environmental-management, long-term-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $1.20 billion to HANFORD TANK WASTE OPERATIONS & CLOSURE, LLC. THE AWARD CONTINUES PERFORMANCE OF INTEGRATED TANK DISPOSITION CONTRACT VIA THE IMPLEMENTATION TASK ORDER, TO-02.
Who is the contractor on this award?
The obligated recipient is HANFORD TANK WASTE OPERATIONS & CLOSURE, LLC.
Which agency awarded this contract?
Awarding agency: Department of Energy (Department of Energy).
What is the total obligated amount?
The obligated amount is $1.20 billion.
What is the period of performance?
Start: 2025-02-24. End: 2026-09-30.
What is the historical spending pattern for tank waste operations at the Hanford site under previous contracts?
Historical spending on Hanford tank waste operations has been substantial, reflecting the immense scale and complexity of the cleanup mission. The Department of Energy has allocated billions of dollars over decades to manage and treat radioactive and chemical waste stored in underground tanks. Previous contracts have often been multi-billion dollar, long-term endeavors, with significant portions dedicated to infrastructure development, waste retrieval, treatment, and disposal. Analyzing past spending trends reveals fluctuations based on program priorities, technological advancements, and budget allocations. For instance, shifts in regulatory requirements or the pace of facility construction can lead to significant year-over-year variations. Understanding these historical patterns is crucial for assessing the current contract's value and forecasting future budgetary needs for the ongoing cleanup.
How does the awarded value of $1.2 billion compare to the contractor's previous performance on similar tasks?
The $1.2 billion award represents the total estimated cost and fee over the contract's period of performance. To compare this to the contractor's previous performance, one would need to examine the value and scope of prior contracts held by Hanford Tank Waste Operations & Closure, LLC, or its predecessor entities, for similar tank disposition tasks at Hanford. If this award continues the performance of an existing Integrated Tank Disposition Contract via a task order, the comparison would focus on the task order's value relative to the overall contract and the contractor's historical execution against budget and schedule on that prior work. Without specific data on prior contract values and performance metrics for this exact scope, a direct comparison is difficult. However, the continuation of performance suggests a baseline level of satisfaction with the contractor's capabilities and execution.
What are the key performance indicators (KPIs) that will be used to assess the contractor's performance and determine award fees?
While the specific KPIs are not detailed in the provided award abstract, Cost Plus Award Fee (CPAF) contracts typically tie award fees to the achievement of clearly defined performance objectives. For hazardous waste treatment and disposal at a site like Hanford, these KPIs would likely encompass critical areas such as safety performance (e.g., incident rates, compliance with safety protocols), environmental compliance (e.g., emissions, waste handling standards), operational efficiency (e.g., waste processed, throughput rates), schedule adherence (e.g., meeting milestones for tank treatment or closure activities), and cost control. The 'Award Fee' component means the government will evaluate the contractor's performance against these metrics and determine a fee, ranging from zero to a maximum amount, based on the level of achievement. Robust KPIs are essential for ensuring the contractor is incentivized to meet the government's most important objectives.
What are the primary risks associated with this contract, and what mitigation strategies are likely in place?
Primary risks associated with this contract include the inherent technical complexities of treating and disposing of hazardous and radioactive tank waste, potential for cost overruns due to unforeseen conditions or scope changes, schedule delays impacting the overall Hanford cleanup timeline, and ensuring stringent safety and environmental compliance. Mitigation strategies likely involve rigorous government oversight, detailed performance work statements, phased performance evaluations for award fees, robust safety and environmental management systems mandated by the contract, and contingency planning for technical challenges. The CPAF structure itself acts as a risk mitigation tool by incentivizing the contractor to manage costs and perform efficiently to earn higher fees. Furthermore, the contractor's existing presence and experience at Hanford may mitigate some operational risks.
What is the long-term outlook for hazardous waste management contracts at the Hanford site beyond this award?
The long-term outlook for hazardous waste management contracts at the Hanford site remains significant, as the cleanup mission is a multi-decade endeavor. This $1.2 billion award represents a continuation of critical operations, but the overall cleanup involves numerous phases, including tank waste treatment, disposal of treated waste, decontamination and decommissioning of facilities, and soil and groundwater remediation. Future contracts will likely evolve to address these subsequent phases, potentially involving different technologies and scopes of work. The Department of Energy's strategic plans and budget appropriations will dictate the pace and nature of future contracting. Given the scale of contamination and the complexity of the mission, sustained federal investment and contracting are expected for many years to come.
Industry Classification
NAICS: Administrative and Support and Waste Management and Remediation Services › Waste Treatment and Disposal › Hazardous Waste Treatment and Disposal
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
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Address: 800 MAIN ST, LYNCHBURG, VA, 24504
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign-Owned and U.S.-Incorporated Business, Not Designated a Small Business, Special Designations
Financial Breakdown
Contract Ceiling: $1,320,090,000
Exercised Options: $1,320,090,000
Current Obligation: $1,200,702,409
Actual Outlays: $765,934,932
Subaward Activity
Number of Subawards: 375
Total Subaward Amount: $199,258,549
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: 89303324DEM000096
IDV Type: IDC
Timeline
Start Date: 2025-02-24
Current End Date: 2026-09-30
Potential End Date: 2026-09-30 00:00:00
Last Modified: 2026-03-09
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