DOE's $27.4B Los Alamos contract for facilities support services awarded via full and open competition

Contract Overview

Contract Amount: $27,422,768,631 ($27.4B)

Contractor: LOS Alamos National Security LLC

Awarding Agency: Department of Energy

Start Date: 2005-12-21

End Date: 2018-10-31

Contract Duration: 4,697 days

Daily Burn Rate: $5.8M/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: THE CONTRACTOR SHALL, IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THIS CONTRACT, PROVIDE THE PERSONNEL, EQUIPMENT, MATERIALS, SUPPLIES, AND SERVICES (EXCEPT AS MAY BE FURNISHED BY THE GOVERNMENT) AND OTHERWISE DO ALL THING NECESSARY FOR, OR INCIDENT TO PROVIDING ITS BEST EFFORTS TO EFFECTIVELY, EFFICIENTLY AND SAFELY MANAGE AND OPERATE THE LOS ALAMOS NATIONAL LABORATORY FOR THE U.S. DEPARTMENT OF ENERGY/NATIONAL NUCLEAR SECURITY ADMINISTRATION.

Place of Performance

Location: LOS ALAMOS, LOS ALAMOS County, NEW MEXICO, 87545

State: New Mexico Government Spending

Plain-Language Summary

Department of Energy obligated $27.42 billion to LOS ALAMOS NATIONAL SECURITY LLC for work described as: THE CONTRACTOR SHALL, IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THIS CONTRACT, PROVIDE THE PERSONNEL, EQUIPMENT, MATERIALS, SUPPLIES, AND SERVICES (EXCEPT AS MAY BE FURNISHED BY THE GOVERNMENT) AND OTHERWISE DO ALL THING NECESSARY FOR, OR INCIDENT TO PROVIDING ITS BEST EFFOR… Key points: 1. Contractor is responsible for managing and operating the Los Alamos National Laboratory. 2. Significant contract value indicates a critical national security and research function. 3. Awarded under a Cost Plus Fixed Fee (CPFF) pricing structure. 4. Contract duration is substantial, spanning over 12 years. 5. The contract was awarded through full and open competition, suggesting a robust bidding process. 6. The contractor is Los Alamos National Security LLC. 7. The contract covers facilities support services, a broad category encompassing operations and maintenance. 8. The contract's base value is over $5.8 billion, with potential for significant growth through task orders and modifications.

Value Assessment

Rating: good

The contract's value of $27.4 billion over its life is substantial, reflecting the critical nature of managing a national laboratory. Benchmarking this against similar large-scale, complex facility management contracts is challenging due to the unique scope of Los Alamos. The CPFF structure allows for flexibility but requires careful oversight to manage costs effectively. The fixed fee component provides some cost control for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through full and open competition, indicating that multiple bidders were likely considered. This process is designed to foster price discovery and ensure the government receives competitive offers. The specific number of bidders is not provided, but the designation suggests a competitive environment was established.

Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down costs through market forces and encouraging innovation among potential contractors.

Public Impact

The primary beneficiaries are the U.S. Department of Energy and the National Nuclear Security Administration, who rely on the contractor to manage a critical national laboratory. The services delivered include the comprehensive management and operation of the Los Alamos National Laboratory. The geographic impact is concentrated in Los Alamos, New Mexico, where the laboratory is located. Workforce implications include the employment of a large number of personnel to operate and maintain the facility, encompassing scientists, engineers, technicians, and support staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost overruns are a potential risk with Cost Plus Fixed Fee contracts if not managed diligently.
Ensuring continued technological advancement and operational efficiency at a complex national laboratory requires ongoing vigilance.
Maintaining robust security protocols for a facility handling sensitive materials is paramount.

Positive Signals

Awarded through full and open competition, suggesting a competitive process that can lead to better value.
The contractor has a long-term commitment to managing this critical national asset.
The contract structure allows for flexibility to adapt to evolving research and operational needs.

Sector Analysis

This contract falls within the Facilities Support Services sector, a broad category that includes the management and operation of complex physical infrastructure. Los Alamos National Laboratory is a unique entity, making direct spending benchmarks difficult. However, the scale of this contract is indicative of major government investments in national security and scientific research infrastructure, often involving specialized contractors with extensive experience in managing large, high-security facilities.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). Given the immense scale and specialized nature of managing a national laboratory, it is unlikely that small businesses would be primary awardees for the entirety of such a contract. However, the prime contractor, Los Alamos National Security LLC, may engage small businesses as subcontractors for specific services or supplies, contributing to the small business ecosystem.

Oversight & Accountability

Oversight for this contract is primarily the responsibility of the Department of Energy and the National Nuclear Security Administration. Given the critical nature of Los Alamos, robust oversight mechanisms, including performance reviews, financial audits, and potentially Inspector General investigations, are expected to be in place to ensure accountability and transparency in operations and spending.

Related Government Programs

National Laboratory Management Contracts
Department of Energy Operations
National Nuclear Security Administration Services
Facilities Management
Research and Development Support

Risk Flags

Cost Overrun Potential (CPFF)
National Security Implications
Complex Operations Management
Long-Term Contractual Commitment

Frequently Asked Questions

What is this federal contract paying for?

Department of Energy awarded $27.42 billion to LOS ALAMOS NATIONAL SECURITY LLC. THE CONTRACTOR SHALL, IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THIS CONTRACT, PROVIDE THE PERSONNEL, EQUIPMENT, MATERIALS, SUPPLIES, AND SERVICES (EXCEPT AS MAY BE FURNISHED BY THE GOVERNMENT) AND OTHERWISE DO ALL THING NECESSARY FOR, OR INCIDENT TO PROVIDING ITS BEST EFFORTS TO EFFECTIVELY, EFFICIENTLY AND SAFELY MANAGE AND OPERATE THE LOS ALAMOS NATIONAL LABORATORY FOR THE U.S. DEPARTMENT OF ENERGY/NATIONAL NUCLEAR SECURITY ADMINISTRATION.

Who is the contractor on this award?

The obligated recipient is LOS ALAMOS NATIONAL SECURITY LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $27.42 billion.

What is the period of performance?

Start: 2005-12-21. End: 2018-10-31.

What is the historical spending trend for the Los Alamos National Laboratory management contract?

The provided data shows a definitive contract awarded in 2005 with an end date in 2018, totaling $27.4 billion. This indicates a significant and sustained investment over a period of approximately 13 years. The base value of $5.8 billion suggests a substantial initial commitment, with the total value reflecting cumulative spending over the contract's life, likely including modifications, task orders, and cost-reimbursement elements. Without more granular historical data, it's difficult to pinpoint year-over-year spending fluctuations, but the overall trend points to consistent, high-level funding for the laboratory's operations and management.

How does the contractor's performance track record influence this contract?

The contractor, Los Alamos National Security LLC, was awarded this significant contract, implying a positive assessment of their capabilities and track record by the Department of Energy. Managing a national laboratory involves complex scientific, operational, and security responsibilities. A successful track record in similar large-scale, high-stakes environments would be a critical factor in the selection process. While specific performance metrics are not detailed here, the renewal or continuation of such a substantial contract typically signifies satisfactory or excellent performance in areas such as safety, security, scientific output, and efficient resource management.

What are the key risks associated with this Cost Plus Fixed Fee (CPFF) contract?

The primary risk with a CPFF contract is the potential for cost overruns. While the fixed fee provides a ceiling for the contractor's profit, the 'cost plus' portion means the government reimburses the contractor's allowable costs. If costs escalate beyond initial projections due to unforeseen circumstances, inefficiencies, or scope creep, the total expenditure for the government can increase significantly. Effective risk mitigation requires stringent government oversight, detailed cost tracking, robust auditing, and clear definition of allowable costs to ensure the contractor maintains cost discipline.

How does the value of this contract compare to other federal facilities support contracts?

At $27.4 billion, this contract is exceptionally large, reflecting the unique and critical mission of the Los Alamos National Laboratory. While many federal agencies contract for facilities support services, contracts of this magnitude are rare and typically reserved for managing highly specialized, large-scale government installations like national laboratories, major military bases, or extensive research campuses. Most facilities support contracts are significantly smaller, focusing on individual buildings or smaller complexes. The scale here places it at the very high end of federal spending for this service category.

What is the expected program effectiveness given the contract's structure and duration?

The contract's structure (CPFF) and long duration (over 12 years) are designed to ensure continuity and stability in the management of a critical national laboratory. This long-term commitment allows the contractor to invest in infrastructure, personnel, and long-range planning, which is essential for complex scientific endeavors. Program effectiveness will largely depend on the government's oversight, the contractor's ability to innovate and adapt to evolving scientific needs, maintain stringent safety and security standards, and achieve key performance indicators related to research output and operational efficiency. The CPFF structure, while allowing flexibility, necessitates diligent management to ensure costs remain aligned with objectives.

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: TWO STEP

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 4200 WEST JEMEZ, LOS ALAMOS, NM, 87544

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $36,594,910,358

Exercised Options: $36,594,910,358

Current Obligation: $27,422,768,631

Actual Outlays: $-2,610,841

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline