DOE's $396M Nuclear Fuel Contract Awarded to Nuclear Fuel Services Inc. in 1999
Contract Overview
Contract Amount: $39,637,600 ($39.6M)
Contractor: Nuclear Fuel Services Inc
Awarding Agency: Department of Energy
Start Date: 1999-12-15
End Date: 2004-12-31
Contract Duration: 1,843 days
Daily Burn Rate: $21.5K/day
Competition Type: NOT COMPETED
Number of Offers Received: 2
Pricing Type: FIXED PRICE INCENTIVE
Sector: Other
Place of Performance
Location: TENNESSEE
Plain-Language Summary
Department of Energy obligated $39.6 million to NUCLEAR FUEL SERVICES INC for work described as: Key points: 1. Significant contract value of $396.4 million over 5 years. 2. Sole-source award to Nuclear Fuel Services Inc. raises competition concerns. 3. Fixed Price Incentive contract type aims to balance cost and performance. 4. The sector is 'All Other Basic Inorganic Chemical Manufacturing', a niche area.
Value Assessment
Rating: questionable
The contract value of $396.4 million for a 5-year period is substantial. Without competitive bidding, it's difficult to assess if this price represents fair market value compared to similar inorganic chemical manufacturing services.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers as there was no market pressure to offer the best price.
Taxpayer Impact: The lack of competition in awarding this significant contract may result in suboptimal pricing, potentially costing taxpayers more than a competitively bid contract.
Public Impact
Impacts national security and energy independence through nuclear fuel supply. Potential for increased costs to taxpayers due to sole-source nature. Ensures continued operation of critical nuclear fuel manufacturing capabilities. Limited transparency on pricing due to lack of competition.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Potential for inflated pricing
Positive Signals
- Ensures critical supply chain continuity
- Long-term contract provides stability
Sector Analysis
This contract falls under 'All Other Basic Inorganic Chemical Manufacturing'. Spending in this specific niche can be highly variable, often driven by government needs for specialized materials like nuclear fuel, making direct benchmarks challenging.
Small Business Impact
The data indicates this contract was awarded to Nuclear Fuel Services Inc., a large entity. There is no indication of small business participation in this specific award.
Oversight & Accountability
The sole-source nature of this award warrants scrutiny. Further review of the justification for not competing the contract and the negotiation process would be beneficial for oversight.
Related Government Programs
- All Other Basic Inorganic Chemical Manufacturing
- Department of Energy Contracting
- Department of Energy Programs
Risk Flags
- Sole-source award lacks competitive pricing.
- Potential for overpayment due to no competition.
- Dependency on a single supplier for critical material.
- Limited transparency on cost justification.
Tags
all-other-basic-inorganic-chemical-manuf, department-of-energy, tn, dca, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $39.6 million to NUCLEAR FUEL SERVICES INC. See the official description on USAspending.
Who is the contractor on this award?
The obligated recipient is NUCLEAR FUEL SERVICES INC.
Which agency awarded this contract?
Awarding agency: Department of Energy (Department of Energy).
What is the total obligated amount?
The obligated amount is $39.6 million.
What is the period of performance?
Start: 1999-12-15. End: 2004-12-31.
What was the specific justification for awarding this contract on a sole-source basis, and what steps were taken to ensure fair pricing without competition?
The justification for a sole-source award typically involves unique capabilities, proprietary technology, or urgent national security needs that only one entity can fulfill. Without access to the specific contract file, it's impossible to detail the exact justification. However, agencies are expected to conduct market research and negotiate the best possible price, even in sole-source situations, often through cost analysis and audits.
What are the potential long-term risks associated with relying on a single supplier for critical nuclear fuel manufacturing?
Relying on a single supplier for critical nuclear fuel manufacturing poses significant risks, including supply chain disruptions due to unforeseen events (e.g., natural disasters, operational issues at the supplier), potential price gouging over time, and a lack of incentive for the supplier to innovate or improve efficiency. This dependency can also create national security vulnerabilities if the supplier faces financial instability or geopolitical challenges.
How effectively did the Fixed Price Incentive (FPI) contract structure manage cost and performance for this nuclear fuel service?
The effectiveness of the FPI structure depends on the specific target cost, incentive sharing ratio, and ceiling price negotiated. While FPI aims to motivate the contractor to control costs by sharing savings below the target, it also allows for cost overruns up to the ceiling. For this contract, assessing effectiveness requires examining the final cost versus target, performance metrics achieved, and whether the government achieved its objectives within acceptable financial parameters.
Industry Classification
NAICS: Manufacturing › Basic Chemical Manufacturing › All Other Basic Inorganic Chemical Manufacturing
Product/Service Code: FURNACE/STEAM/DRYING; NUCL REACTOR
Competition & Pricing
Extent Competed: NOT COMPETED
Offers Received: 2
Pricing Type: FIXED PRICE INCENTIVE (L)
Contractor Details
Business Categories: Category Business, Small Business
Financial Breakdown
Contract Ceiling: $2,665,600
Exercised Options: $2,665,600
Current Obligation: $39,637,600
Timeline
Start Date: 1999-12-15
Current End Date: 2004-12-31
Potential End Date: 2004-12-31 00:00:00
Last Modified: 2010-09-20
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