DOE's Y-12 Facility Management Contract Awarded to BWXT Y-12, LLC for Over $10.9 Billion
Contract Overview
Contract Amount: $10,985,001,041 ($11.0B)
Contractor: Bwxt Y - 12, LLC
Awarding Agency: Department of Energy
Start Date: 2000-08-31
End Date: 2014-06-30
Contract Duration: 5,051 days
Daily Burn Rate: $2.2M/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: COST PLUS AWARD FEE
Sector: Other
Official Description: MANAGEMENT AND OPERATION OF THE Y-12 FACILITY
Place of Performance
Location: OAK RIDGE, ANDERSON County, TENNESSEE, 37830
Plain-Language Summary
Department of Energy obligated $10.99 billion to BWXT Y - 12, LLC for work described as: MANAGEMENT AND OPERATION OF THE Y-12 FACILITY Key points: 1. The contract for Y-12 facility management represents a significant investment in national security infrastructure. 2. BWXT Y-12, LLC secured this large contract, indicating strong competitive positioning in the sector. 3. The primary risk lies in the long-term operational costs and performance of such a critical facility. 4. This spending falls within the Facilities Support Services sector, crucial for government operations.
Value Assessment
Rating: fair
The contract value of over $10.9 billion over its duration suggests a substantial investment. Benchmarking against similar large-scale facility management contracts is difficult without more granular cost data, but the scale implies significant resource allocation.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting a robust price discovery process. However, the 'COST PLUS AWARD FEE' structure can lead to cost overruns if not managed tightly, potentially impacting the final price paid.
Taxpayer Impact: Taxpayers are funding a critical national security asset. While competition aims for efficiency, the cost-plus nature requires diligent oversight to ensure value for money.
Public Impact
Ensures continued operation and security of the Y-12 National Security Complex. Supports national defense and nuclear nonproliferation efforts. Creates and sustains jobs in the Tennessee region. Impacts the broader nuclear security industrial base.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns due to Cost Plus Award Fee structure.
- Long-term operational risks for a critical national security facility.
- Dependence on a single contractor for essential services.
Positive Signals
- Awarded through full and open competition.
- Secures vital national security infrastructure.
- Long contract duration provides stability.
Sector Analysis
This contract falls under Facilities Support Services, a broad category essential for government operations, particularly in sensitive areas like nuclear security. Benchmarks for such large, specialized facilities are scarce, but the scale indicates a major commitment.
Small Business Impact
The data indicates this contract was awarded to BWXT Y-12, LLC, a large entity. There is no explicit information regarding small business participation or subcontracting in the provided data, suggesting it may not have been a primary focus or was handled separately.
Oversight & Accountability
The Department of Energy, as the contracting agency, holds primary oversight responsibility. The 'COST PLUS AWARD FEE' structure necessitates rigorous performance monitoring and financial auditing to ensure accountability and prevent undue costs.
Related Government Programs
- Facilities Support Services
- Department of Energy Contracting
- Department of Energy Programs
Risk Flags
- Cost overruns due to Cost Plus Award Fee structure.
- Performance failures impacting national security.
- Long-term operational and maintenance costs.
- Contractor dependency and potential for sole-sourcing future work.
- Cybersecurity risks associated with critical infrastructure.
Tags
facilities-support-services, department-of-energy, tn, definitive-contract, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $10.99 billion to BWXT Y - 12, LLC. MANAGEMENT AND OPERATION OF THE Y-12 FACILITY
Who is the contractor on this award?
The obligated recipient is BWXT Y - 12, LLC.
Which agency awarded this contract?
Awarding agency: Department of Energy (Department of Energy).
What is the total obligated amount?
The obligated amount is $10.99 billion.
What is the period of performance?
Start: 2000-08-31. End: 2014-06-30.
What specific performance metrics are tied to the award fee, and how effectively have they been met historically?
The effectiveness of the award fee structure hinges on clearly defined, measurable performance metrics directly linked to the critical functions of the Y-12 facility. Historical data on metric achievement and corresponding award fee payouts would reveal how well the contractor has been incentivized and compensated for performance, directly impacting the overall value realized by the government.
What are the contingency plans and associated costs if BWXT Y-12, LLC fails to meet critical operational or security requirements?
Contingency planning for failures in critical operations or security at a facility like Y-12 is paramount. This includes pre-defined remediation steps, potential penalties, and mechanisms for contractor replacement. The associated costs involve not only direct remediation expenses but also potential disruptions to national security missions and the expense of transitioning to an alternative provider.
How does the long-term operational cost compare to alternative models, such as government in-house management or different contracting structures?
Comparing the long-term operational cost of this Cost Plus Award Fee contract to alternative models is crucial for assessing value. A detailed analysis would consider the total lifecycle costs, including management overhead, potential for cost efficiencies, and risks associated with each model. The current structure's flexibility might be offset by potential cost escalations if not meticulously managed.
Industry Classification
NAICS: Administrative and Support and Waste Management and Remediation Services › Facilities Support Services › Facilities Support Services
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: 3
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Parent Company: BWX Technologies, Inc.
Address: 301 BEAR CRK RD MS-8264, OAK RIDGE, TN, 37830
Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $10,986,768,334
Exercised Options: $10,986,768,334
Current Obligation: $10,985,001,041
Actual Outlays: $-684,182
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Timeline
Start Date: 2000-08-31
Current End Date: 2014-06-30
Potential End Date: 2014-06-30 00:00:00
Last Modified: 2025-06-12
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