DOE awards $221M contract for nuclear reactor components, extending to 2034

Contract Overview

Contract Amount: $221,381,740 ($221.4M)

Contractor: Westinghouse Government Services LLC

Awarding Agency: Department of Energy

Start Date: 2000-07-15

End Date: 2034-09-30

Contract Duration: 12,495 days

Daily Burn Rate: $17.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: TRITIUM PRODUCING BURNABLE ABSORBER ROD (TPBAR) FABRICATION

Place of Performance

Location: MADISON, WESTMORELAND County, PENNSYLVANIA, 15663

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Energy obligated $221.4 million to WESTINGHOUSE GOVERNMENT SERVICES LLC for work described as: TRITIUM PRODUCING BURNABLE ABSORBER ROD (TPBAR) FABRICATION Key points: 1. Contract value represents significant investment in nuclear reactor component manufacturing. 2. Long contract duration suggests a critical, long-term need for these specialized components. 3. Fixed-price contract type aims to control costs and provide predictability. 4. Sole supplier for a critical component could indicate limited market alternatives. 5. Performance period spans over a decade, requiring sustained quality and delivery. 6. Geographic concentration in Pennsylvania for manufacturing.

Value Assessment

Rating: fair

The contract value of $221.4 million over its extended period appears substantial for specialized nuclear components. Benchmarking is difficult without specific details on the TPBARs' complexity and quantity. However, the long duration and the nature of the product suggest a potentially high unit cost, which warrants scrutiny. The firm fixed-price structure is a positive indicator for cost control, but the overall value proposition depends heavily on the criticality and scarcity of these components in the market.

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 were likely considered. However, the specific number of bidders and the details of the competitive process are not provided. The fact that Westinghouse Government Services LLC was awarded the contract suggests they offered the best value or met the most stringent requirements among the competitors. The long-term nature of the contract might have influenced the competitive landscape.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it encourages multiple vendors to bid, potentially driving down prices and ensuring the government receives the best possible value.

Public Impact

The Department of Energy benefits from a secure supply of critical nuclear reactor components. This contract supports national security interests by ensuring the operational readiness of nuclear facilities. The manufacturing activities will likely sustain jobs within the specialized nuclear industry in Pennsylvania. The TPBARs are essential for the safe and efficient operation of nuclear reactors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long-term contract duration increases the risk of cost overruns if market conditions or material costs change significantly.
Dependence on a single contractor for a critical component could lead to supply chain vulnerabilities.
The specialized nature of the product may limit future competition if the technology evolves or other manufacturers exit the market.

Positive Signals

Firm fixed-price contract type provides cost certainty for the government.
Awarded under full and open competition, suggesting a competitive bidding process.
Long contract duration indicates a stable, long-term relationship and potential for economies of scale.

Sector Analysis

This contract falls within the 'Irradiation Apparatus Manufacturing' subsector, a highly specialized niche within the broader manufacturing industry. The market for nuclear reactor components, particularly specialized items like TPBARs, is characterized by high barriers to entry due to stringent safety regulations, complex technology, and significant capital investment. Comparable spending benchmarks are difficult to establish due to the unique nature of these components, but the overall federal spending on nuclear energy and defense programs represents a substantial market.

Small Business Impact

The contract details do not indicate any specific small business set-asides or subcontracting requirements. Given the highly specialized nature of TPBAR fabrication, it is likely that the primary contractor possesses unique capabilities. However, opportunities for small businesses may exist further down the supply chain for raw materials or ancillary services, though this is not explicitly detailed in the provided data.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Energy's contracting and program management offices. The firm fixed-price nature of the contract provides a degree of financial oversight by limiting cost increases. Transparency is facilitated through the Federal Procurement Data System (FPDS), where contract awards are reported. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Nuclear Reactor Component Manufacturing
Defense Nuclear Nonproliferation
Naval Nuclear Propulsion Program
Department of Energy Research and Development

Risk Flags

Long-term contract duration
Sole supplier risk
Critical component dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Energy awarded $221.4 million to WESTINGHOUSE GOVERNMENT SERVICES LLC. TRITIUM PRODUCING BURNABLE ABSORBER ROD (TPBAR) FABRICATION

Who is the contractor on this award?

The obligated recipient is WESTINGHOUSE GOVERNMENT SERVICES LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $221.4 million.

What is the period of performance?

Start: 2000-07-15. End: 2034-09-30.

What is the specific function and criticality of TRITIUM PRODUCING BURNABLE ABSORBER RODS (TPBARs) within nuclear reactors?

TPBARs are specialized components used in certain types of nuclear reactors, particularly those involved in defense applications or tritium production for nuclear weapons programs. Their primary function is to control the nuclear reaction rate by absorbing excess neutrons, especially during the initial stages of fuel burnup. They act as 'burnable poisons,' meaning they are consumed over time, helping to flatten the reactor's power profile and extend the fuel cycle. Their criticality stems from their role in maintaining safe and efficient reactor operation, as well as their contribution to specific national security objectives related to tritium supply. Without properly functioning TPBARs, reactor performance could be compromised, potentially impacting power output, fuel efficiency, and the ability to meet strategic material requirements.

How does the firm fixed-price (FFP) contract type mitigate risks for the Department of Energy in this long-term award?

The Firm Fixed-Price (FFP) contract type is designed to shift the majority of cost risk from the government to the contractor. Under an FFP agreement, the contractor is obligated to complete the work for a predetermined price, regardless of their actual costs incurred. This provides the Department of Energy (DOE) with significant cost certainty, protecting it from potential cost overruns due to unforeseen increases in labor, materials, or manufacturing complexities. While the contractor assumes the risk of higher-than-expected costs, the DOE benefits from a predictable budget allocation. This structure incentivizes the contractor to manage its own costs efficiently to maximize profit, thereby aligning the contractor's interests with the government's objective of obtaining the components at a set price.

What are the potential implications of a single contractor, Westinghouse Government Services LLC, holding this long-term contract for TPBAR fabrication?

Having a single contractor, Westinghouse Government Services LLC, for a critical component like TPBARs over a long duration (over 12 years) presents both potential benefits and risks. On the positive side, it can foster a deep level of expertise and efficiency within the contractor, potentially leading to high-quality production and stable supply. It can also reduce the administrative burden associated with managing multiple suppliers. However, it also creates a sole-source dependency, which can limit future competition and potentially lead to price increases in subsequent contract periods if market dynamics change. Furthermore, it concentrates supply chain risk; any disruption at the contractor's facility could have significant implications for the DOE's operations. The government must therefore maintain robust oversight to ensure continued value and performance.

Given the contract's duration (12,495 days) and value ($221.4M), what is the approximate average annual spending rate?

The contract has a duration of 12,495 days, which equates to approximately 34.23 years (12495 / 365.25). The total contract value is $221,381,740.32. To find the approximate average annual spending rate, we divide the total value by the duration in years: $221,381,740.32 / 34.23 years ≈ $6,468,000 per year. This indicates a consistent, significant annual investment by the Department of Energy in the fabrication of these specialized components over the life of the contract.

What does the 'PA' (Pennsylvania) designation signify in the contract details, and what are its potential economic impacts?

The 'PA' designation indicates that the place of performance or the primary location of the contractor for this specific award is Pennsylvania. This suggests that the economic benefits of this contract, such as job creation and associated spending, are likely to be concentrated within that state. For Pennsylvania, this represents a significant injection of federal funds into its economy, particularly within the specialized manufacturing and potentially the nuclear energy or defense sectors. It supports high-skilled employment and contributes to the state's industrial base. The long duration of the contract implies a sustained economic impact for the region over more than a decade.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Irradiation Apparatus Manufacturing

Product/Service Code: FURNACE/STEAM/DRYING; NUCL REACTOR

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Address: 5801 BLUFF RD, HOPKINS, SC, 29061

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $419,587,858

Exercised Options: $419,587,858

Current Obligation: $221,381,740

Actual Outlays: $90,470,025

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Timeline