Fermi National Accelerator Laboratory operations contract awarded to Fermi Research Alliance, LLC for over $8.29 billion
Contract Overview
Contract Amount: $8,292,579,521 ($8.3B)
Contractor: Fermi Research Alliance, LLC
Awarding Agency: Department of Energy
Start Date: 2007-01-01
End Date: 2024-12-31
Contract Duration: 6,574 days
Daily Burn Rate: $1.3M/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE
Sector: R&D
Official Description: OPERATION OF FERMI NATIONAL ACCELERATOR LABORATORY
Place of Performance
Location: BATAVIA, KANE County, ILLINOIS, 60510
State: Illinois Government Spending
Plain-Language Summary
Department of Energy obligated $8.29 billion to FERMI RESEARCH ALLIANCE, LLC for work described as: OPERATION OF FERMI NATIONAL ACCELERATOR LABORATORY Key points: 1. The contract represents a significant long-term investment in fundamental scientific research. 2. The cost-plus-incentive fee structure aims to align contractor performance with government objectives. 3. Long duration suggests a stable, ongoing need for the services provided. 4. The contract's value places it among major federal research and development expenditures. 5. Performance context is critical given the complexity and scale of accelerator operations. 6. Sector positioning is within the high-end R&D services category for the Department of Energy.
Value Assessment
Rating: good
The total value of $8.29 billion over its duration indicates a substantial commitment. Benchmarking this against similar large-scale scientific facility operations is challenging due to the unique nature of Fermilab. However, the cost-plus-incentive fee (CPIF) structure suggests an attempt to manage costs while incentivizing performance, which is a common approach for complex, long-term projects where precise cost estimation is difficult. The pricing will depend heavily on the achievement of specific research milestones and operational efficiencies.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that multiple entities had the opportunity to bid. This process is designed to foster price discovery and ensure the government receives competitive offers. The number of bidders is not specified, but the full and open nature suggests a robust competition that should theoretically lead to a more favorable price for the government compared to sole-source or limited competition awards.
Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down costs through market forces and encouraging innovative solutions from a wider pool of potential contractors.
Public Impact
The primary beneficiaries are the scientific community and the public, through advancements in fundamental physics and related fields. The contract supports the operation and maintenance of the Fermi National Accelerator Laboratory, a world-leading particle physics research facility. The geographic impact is centered in Illinois, where Fermilab is located, but the scientific impact is global. Workforce implications include employment for a large number of scientists, engineers, technicians, and support staff.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns in complex, long-term research projects.
- Ensuring continued scientific relevance and innovation over the contract's long duration.
- Managing the transition between research goals and operational demands.
Positive Signals
- Awarded through full and open competition, suggesting competitive pricing.
- Cost-plus-incentive fee structure incentivizes efficient performance.
- Long contract duration provides stability for critical research infrastructure.
- Contractor has a long-standing relationship with operating Fermilab.
Sector Analysis
This contract falls within the Research and Development (R&D) sector, specifically focusing on physical sciences and large-scale experimental facilities. The market for operating national laboratories is highly specialized, with a limited number of organizations possessing the requisite expertise and infrastructure. Comparable spending benchmarks would typically involve other large federal R&D facilities or major scientific endeavors, where significant, multi-year investments are common.
Small Business Impact
The data indicates that small business participation (sb) is false, and there is no specific small business set-aside (ss) mentioned. This suggests that the primary contract was not set aside for small businesses. Subcontracting opportunities for small businesses may exist, but they are not explicitly detailed in this summary. The focus appears to be on a large prime contractor capable of managing the entire facility.
Oversight & Accountability
Oversight is likely managed by the Department of Energy's relevant program offices, with potential involvement from the Office of Inspector General for audits and investigations. Accountability measures would be tied to the performance metrics and milestones outlined in the cost-plus-incentive fee contract. Transparency is generally maintained through public reporting on scientific progress and operational status, though detailed contract financials may be less accessible.
Related Government Programs
- Department of Energy National Laboratory Operations
- Large-Scale Scientific Facility Management
- Particle Physics Research
- Advanced Scientific Computing
Risk Flags
- Long contract duration may increase risk of cost escalation or changing technological needs.
- Complexity of scientific research can lead to unforeseen challenges and cost impacts.
- Reliance on a single contractor for critical national infrastructure.
Tags
research-and-development, department-of-energy, illinois, definitive-contract, large-contract, full-and-open-competition, cost-plus-incentive-fee, national-laboratory, physics, science, federal-spending
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $8.29 billion to FERMI RESEARCH ALLIANCE, LLC. OPERATION OF FERMI NATIONAL ACCELERATOR LABORATORY
Who is the contractor on this award?
The obligated recipient is FERMI RESEARCH 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 $8.29 billion.
What is the period of performance?
Start: 2007-01-01. End: 2024-12-31.
What is the historical spending trend for the operation of Fermi National Accelerator Laboratory?
Historical spending data for the operation of Fermi National Accelerator Laboratory shows a consistent and significant federal investment over many years. While the current contract value is over $8.29 billion, this reflects the cumulative cost over its extended period. Annual expenditures would fluctuate based on research priorities, facility upgrades, and operational needs. Analyzing year-over-year spending would reveal trends in resource allocation and the overall cost trajectory for maintaining and advancing the laboratory's capabilities. This long-term funding commitment underscores the strategic importance the Department of Energy places on Fermilab's scientific mission.
How does the cost-plus-incentive fee (CPIF) structure typically influence contractor behavior and cost management for large R&D contracts?
A Cost-Plus-Incentive Fee (CPIF) contract is designed to share risks and rewards between the government and the contractor. In this structure, the final fee (profit) is adjusted based on whether the final costs are below or above a target cost, and performance objectives are met. For large R&D contracts like Fermilab's operation, CPIF incentivizes the contractor (Fermi Research Alliance, LLC) to control costs diligently, as exceeding target costs reduces their fee, while staying under target or achieving performance goals increases it. This encourages efficiency, innovation in cost-saving measures, and a focus on achieving the scientific and operational milestones defined in the contract, thereby aligning the contractor's financial interests with those of the government and taxpayers.
What are the key performance indicators (KPIs) likely used to evaluate Fermi Research Alliance, LLC's performance under this contract?
Key Performance Indicators (KPIs) for a contract of this nature would likely encompass a range of scientific, operational, and management metrics. Scientifically, KPIs might include the successful execution of planned experiments, achievement of research milestones, publication of findings in peer-reviewed journals, and contributions to scientific discovery. Operationally, they could involve facility uptime, safety performance, energy efficiency, and adherence to maintenance schedules. Management KPIs might focus on budget adherence, timely reporting, workforce management, and compliance with federal regulations. The CPIF structure would tie financial incentives directly to the achievement of these predefined KPIs, ensuring accountability.
What is the significance of the 'definitive contract' award type in the context of Fermilab operations?
A 'definitive contract' is a type of contract that contains all the terms and clauses necessary for the performance of the work. In the context of Fermilab operations, awarding a definitive contract signifies a firm commitment by the Department of Energy to procure the services for the entire duration specified (2007-2024). Unlike basic ordering agreements or indefinite-delivery/indefinite-quantity (IDIQ) contracts that might require further task orders or modifications to define specific work and pricing, a definitive contract establishes the full scope, price, and terms upfront. This provides stability and predictability for both the government and the contractor, essential for managing a large, complex, and long-term scientific facility like Fermilab.
How does the North American Industry Classification System (NAICS) code 541710 (Research and Development in the Physical, Engineering, and Life Sciences) apply to this contract?
The NAICS code 541710 accurately categorizes the primary activity of this contract, which is the operation of the Fermi National Accelerator Laboratory. This code specifically covers establishments primarily engaged in conducting research and development in the physical, engineering, and life sciences, either on a contract or fee basis, or in their own name. Fermilab's mission involves cutting-edge research in particle physics, requiring advanced engineering and sophisticated experimental facilities. Therefore, the R&D activities conducted under this contract, including theoretical research, experimental design, data analysis, and the development of new technologies, fall squarely within the scope defined by NAICS 541710.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences
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
Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE (V)
Evaluated Preference: NONE
Contractor Details
Address: 355 FIRST ST 2ND FLOOR, BATAVIA, IL, 60510
Business Categories: Category Business, Nonprofit Organization, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $8,428,076,734
Exercised Options: $8,376,249,695
Current Obligation: $8,292,579,521
Actual Outlays: $3,162,218,929
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Timeline
Start Date: 2007-01-01
Current End Date: 2024-12-31
Potential End Date: 2024-12-31 00:00:00
Last Modified: 2025-01-31
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