DOE's $5.6B Nevada Test Site contract awarded to National Security Technologies, LLC for facilities support
Contract Overview
Contract Amount: $5,634,272,220 ($5.6B)
Contractor: National Security Technologies, LLC
Awarding Agency: Department of Energy
Start Date: 2006-07-01
End Date: 2017-11-30
Contract Duration: 4,170 days
Daily Burn Rate: $1.4M/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: COST PLUS AWARD FEE
Sector: Other
Official Description: MANAGEMENT AND OPERATIONS OF NEVADA TEST SITE AND SATELLITE FACILITIES
Place of Performance
Location: LAS VEGAS, CLARK County, NEVADA, 89193
State: Nevada Government Spending
Plain-Language Summary
Department of Energy obligated $5.63 billion to NATIONAL SECURITY TECHNOLOGIES, LLC for work described as: MANAGEMENT AND OPERATIONS OF NEVADA TEST SITE AND SATELLITE FACILITIES Key points: 1. The contract represents a significant investment in maintaining critical national security infrastructure. 2. Competition dynamics for this large-scale facilities support contract are crucial for ensuring taxpayer value. 3. Performance risk is moderate, given the complexity of managing a large test site and its associated facilities. 4. The contract's duration and cost-plus award fee structure warrant close monitoring of cost efficiencies. 5. This contract positions National Security Technologies, LLC as a key player in government facilities management. 6. The geographic concentration in Nevada highlights the specific operational needs of the test site.
Value Assessment
Rating: good
The contract's total value of $5.6 billion over its life is substantial. Benchmarking this against similar large-scale facilities management contracts for national laboratories or test sites would provide a clearer picture of value for money. The Cost Plus Award Fee (CPAF) structure allows for contractor incentive but requires rigorous oversight to ensure costs remain reasonable and performance targets are met effectively. Without specific comparable data, it's difficult to definitively assess pricing, but the scale suggests a competitive bidding process was essential.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, indicating that multiple bidders were likely considered. The presence of multiple bidders generally fosters price discovery and encourages contractors to offer competitive terms. The specific number of bidders and the details of the evaluation process would provide further insight into the strength of the competition. A robust competitive environment is a positive indicator for achieving fair market value.
Taxpayer Impact: Full and open competition for a contract of this magnitude is beneficial for taxpayers as it increases the likelihood of receiving competitive pricing and innovative solutions, thereby maximizing the return on investment for government services.
Public Impact
The primary beneficiaries are agencies and programs requiring the operational support and maintenance of the Nevada Test Site and its satellite facilities, crucial for national security and research. Services delivered include comprehensive management and operations, ensuring the readiness and functionality of critical infrastructure. The geographic impact is concentrated in Nevada, specifically around the Nevada Test Site, supporting local and regional economies through employment and resource utilization. Workforce implications include the employment of a significant number of personnel with specialized skills in facility management, security, and technical operations.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns inherent in Cost Plus Award Fee contracts if not managed diligently.
- Ensuring consistent performance across all aspects of the vast test site operations.
- Managing the transition and integration of complex systems and personnel.
Positive Signals
- Awarded through full and open competition, suggesting a competitive pricing environment.
- The contractor, National Security Technologies, LLC, likely possesses specialized expertise for this unique facility.
- The contract structure includes award fees, incentivizing high performance and efficiency.
Sector Analysis
The facilities support services sector for government operations is a critical component of national infrastructure management. This contract falls within the broader category of professional, scientific, and technical services, with a specific focus on large-scale site operations. Comparable spending benchmarks would typically involve other major federal laboratory or test site management contracts, which often run into billions of dollars due to the complexity and scale of operations. The market for such services is specialized, requiring deep expertise in security, environmental management, and technical operations.
Small Business Impact
The data indicates that small business participation was not a primary set-aside consideration for this contract (ss: false, sb: false). While the prime contract may not have specific set-aside clauses, the prime contractor, National Security Technologies, LLC, would likely be expected to engage small businesses for subcontracting opportunities to fulfill various support roles. The extent of small business subcontracting will be a key factor in assessing the broader economic impact on the small business ecosystem.
Oversight & Accountability
Oversight for this contract would primarily reside with the Department of Energy, likely through contracting officers and program managers responsible for the Nevada Test Site. Accountability measures are embedded within the Cost Plus Award Fee structure, which ties a portion of the contractor's profit to performance metrics. Transparency would be facilitated through contract reporting requirements and potentially through Inspector General audits, ensuring that funds are used appropriately and objectives are met.
Related Government Programs
- Nevada National Security Site Operations
- Department of Energy Facilities Management
- National Nuclear Security Administration Support Contracts
- Large-Scale Government Site Operations
Risk Flags
- Cost Overruns Potential
- Performance Variability
- Security Risks
- Environmental Compliance
Tags
facilities-support-services, department-of-energy, national-security, nevada, definitive-contract, cost-plus-award-fee, full-and-open-competition, large-contract, site-operations, infrastructure-management
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $5.63 billion to NATIONAL SECURITY TECHNOLOGIES, LLC. MANAGEMENT AND OPERATIONS OF NEVADA TEST SITE AND SATELLITE FACILITIES
Who is the contractor on this award?
The obligated recipient is NATIONAL SECURITY TECHNOLOGIES, LLC.
Which agency awarded this contract?
Awarding agency: Department of Energy (Department of Energy).
What is the total obligated amount?
The obligated amount is $5.63 billion.
What is the period of performance?
Start: 2006-07-01. End: 2017-11-30.
What is the historical spending trend for the Nevada Test Site operations prior to this contract?
Analyzing historical spending for the Nevada Test Site operations prior to this contract (2006-2017) would reveal trends in operational costs, investment in infrastructure, and the evolution of support services. Without specific prior contract data, we can infer that spending would have been substantial, reflecting the site's critical national security and research functions. Fluctuations might be linked to specific program needs, infrastructure upgrades, or changes in operational scope. Understanding these historical patterns is crucial for contextualizing the $5.6 billion awarded here and for identifying any significant increases or decreases in investment over time. This context helps in assessing whether the current contract value aligns with historical resource allocation or represents a new phase of investment.
How does the performance of National Security Technologies, LLC on this contract compare to industry benchmarks for facilities support services?
Assessing the performance of National Security Technologies, LLC on this contract requires detailed review of award fee determinations, performance metrics, and any documented deficiencies or commendations throughout the contract period (2006-2017). Comparing this to industry benchmarks for large-scale facilities support services, particularly within the defense and energy sectors, would involve evaluating metrics such as cost control, operational efficiency, safety records, environmental compliance, and responsiveness to client needs. Given the specialized nature of the Nevada Test Site, direct comparisons might be limited to similar government-run or contractor-operated national laboratories or research facilities. A positive assessment would indicate performance meeting or exceeding established standards for reliability, cost-effectiveness, and mission support within this high-stakes environment.
What are the key risks associated with managing the Nevada Test Site and its satellite facilities, and how were they addressed in this contract?
Key risks associated with managing the Nevada Test Site include operational security, environmental remediation and compliance, safety of personnel, management of complex and aging infrastructure, and ensuring continuity of critical national security missions. This contract likely addressed these risks through robust security protocols, stringent environmental monitoring and management plans, comprehensive safety programs, and detailed operational procedures. The Cost Plus Award Fee (CPAF) structure itself can be a risk mitigation tool by incentivizing the contractor to proactively manage risks to achieve performance targets and earn higher fees. Furthermore, the Department of Energy's oversight and potential involvement of the Inspector General would serve as accountability mechanisms to ensure risks are identified and managed effectively throughout the contract lifecycle.
What was the total cost of the contract over its duration, and how does this compare to the initial award value?
The total value of the contract awarded to National Security Technologies, LLC was $5,634,272,220. This figure represents the estimated total cost, including base amounts and potential award fees, over the contract's duration from July 1, 2006, to November 30, 2017 (approximately 11 years and 5 months). As a Cost Plus Award Fee (CPAF) contract, the final amount paid could vary based on the contractor's performance against defined objectives. To determine the exact final cost, one would need to examine the final payment records. However, the $5.6 billion figure serves as the primary benchmark for the contract's financial scope and the government's commitment over its term.
What is the significance of the 'Facilities Support Services' (NAICS 561210) classification for this contract?
The NAICS code 561210, 'Facilities Support Services,' signifies that the primary purpose of this contract is to provide a comprehensive range of services required for the operation and maintenance of facilities. This typically includes activities such as building operation and maintenance, security services, cleaning services, waste disposal, and groundskeeping. For the Nevada Test Site, this classification underscores the immense scale and complexity of managing a vast operational area, encompassing not just routine upkeep but also specialized support critical for national security missions. It indicates that the contractor is responsible for ensuring the site is functional, secure, and compliant with all relevant regulations, acting as an integrated service provider for the Department of Energy's extensive infrastructure.
Industry Classification
NAICS: Administrative and Support and Waste Management and Remediation Services › Facilities Support Services › Facilities Support Services
Product/Service Code: MAINT, REPAIR, ALTER REAL PROPERTY › MAINT, ALTER, REPAIR 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
Address: 2411 DULLES CORNER PARK STE 600, HERNDON, VA, 20171
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $5,883,796,565
Exercised Options: $5,883,796,565
Current Obligation: $5,634,272,220
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2006-07-01
Current End Date: 2017-11-30
Potential End Date: 2017-11-30 00:00:00
Last Modified: 2024-07-31
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