DOE's $972.5M DUF6 conversion contract awarded to Mid-America Conversion Services shows strong performance
Contract Overview
Contract Amount: $972,505,087 ($972.5M)
Contractor: Mid-America Conversion Services, LLC
Awarding Agency: Department of Energy
Start Date: 2016-09-29
End Date: 2025-09-30
Contract Duration: 3,288 days
Daily Burn Rate: $295.8K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 5
Pricing Type: COST PLUS AWARD FEE
Sector: Other
Official Description: IGF::OT::IGF OPERATION OF DEPLETED URANIUM HEXAFLUORIDE (DUF6)
Place of Performance
Location: PIKETON, PIKE County, OHIO, 45661
State: Ohio Government Spending
Plain-Language Summary
Department of Energy obligated $972.5 million to MID-AMERICA CONVERSION SERVICES, LLC for work described as: IGF::OT::IGF OPERATION OF DEPLETED URANIUM HEXAFLUORIDE (DUF6) Key points: 1. Contract value of $972.5M over 9 years indicates significant long-term investment in hazardous material management. 2. Awarded via full and open competition, suggesting a robust market for specialized environmental services. 3. Performance-based contract structure (Cost Plus Award Fee) incentivizes efficiency and quality. 4. The contract addresses a critical environmental remediation need for the Department of Energy. 5. Geographic concentration in Ohio highlights regional focus for this specialized service. 6. The contractor, Mid-America Conversion Services, LLC, is a key player in this niche market.
Value Assessment
Rating: good
The contract's total value of $972.5M over its duration appears substantial for specialized hazardous material processing. Benchmarking against similar large-scale environmental remediation contracts would provide a clearer picture of value for money. The Cost Plus Award Fee (CPA F) structure, while common for complex services, requires careful monitoring to ensure costs remain reasonable and award fees are justified by performance.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded through full and open competition, indicating that multiple capable vendors were likely considered. The presence of 5 offers suggests a competitive environment, which generally benefits price discovery and can lead to more favorable terms for the government. This level of competition is a positive sign for achieving value.
Taxpayer Impact: A competitive award process helps ensure that taxpayer dollars are used efficiently by driving down costs and encouraging innovation among potential bidders.
Public Impact
The primary beneficiary is the Department of Energy, which receives essential services for managing hazardous depleted uranium hexafluoride. The contract delivers critical environmental remediation and conversion services, mitigating long-term risks associated with stored hazardous materials. The geographic impact is concentrated in Ohio, where the DUF6 conversion facilities are located. Workforce implications include the creation and sustainment of specialized jobs in environmental engineering, chemical processing, and hazardous material handling.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns inherent in Cost Plus Award Fee contracts if not rigorously managed.
- Long-term nature of the contract requires sustained oversight to ensure continued performance and value.
- Dependence on a single contractor for a critical and specialized service carries inherent risk.
Positive Signals
- Awarded through full and open competition, indicating a healthy market and potential for competitive pricing.
- Performance-based contract structure incentivizes contractor efficiency and quality outcomes.
- Contract addresses a significant and long-standing environmental challenge for the DOE.
- The contractor has a defined role in a critical national security and environmental mission.
Sector Analysis
This contract falls within the 'Other Basic Inorganic Chemical Manufacturing' sector, specifically addressing the complex and hazardous process of converting depleted uranium hexafluoride (DUF6). This is a highly specialized niche within the broader environmental services and chemical processing industries. The market for DUF6 conversion is limited due to the unique technical expertise and regulatory requirements involved. Comparable spending benchmarks would likely be found in other large-scale hazardous waste treatment and disposal contracts within the federal government, particularly those managed by the Department of Energy or the Department of Defense.
Small Business Impact
The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Given the highly specialized nature of DUF6 conversion, it is unlikely that small businesses would possess the required technical capabilities or capacity. Therefore, the focus is on large, specialized firms. There is no explicit information on subcontracting plans for small businesses, but the nature of the work suggests prime contractor self-performance or engagement with highly specialized subcontractors.
Oversight & Accountability
Oversight for this contract is primarily managed by the Department of Energy's contracting officers and program managers. The Cost Plus Award Fee structure necessitates detailed performance monitoring and evaluation to justify award fees. Transparency is generally maintained through contract reporting requirements. While specific Inspector General (IG) jurisdiction is not detailed, the DOE Office of Inspector General typically oversees DOE contracts for waste, fraud, and abuse.
Related Government Programs
- Department of Energy Environmental Management
- Depleted Uranium Management Programs
- Hazardous Waste Treatment and Disposal Contracts
- Nuclear Material Processing Contracts
Risk Flags
- Long-term contract duration requires sustained oversight.
- Cost Plus Award Fee structure necessitates careful cost control and performance validation.
- Specialized nature of service limits competition and potential alternatives.
- Hazardous material handling involves inherent safety and environmental risks.
Tags
department-of-energy, depleted-uranium-hexafluoride, environmental-remediation, chemical-manufacturing, cost-plus-award-fee, full-and-open-competition, definitive-contract, ohio, hazardous-materials, long-term-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $972.5 million to MID-AMERICA CONVERSION SERVICES, LLC. IGF::OT::IGF OPERATION OF DEPLETED URANIUM HEXAFLUORIDE (DUF6)
Who is the contractor on this award?
The obligated recipient is MID-AMERICA CONVERSION SERVICES, LLC.
Which agency awarded this contract?
Awarding agency: Department of Energy (Department of Energy).
What is the total obligated amount?
The obligated amount is $972.5 million.
What is the period of performance?
Start: 2016-09-29. End: 2025-09-30.
What is the historical spending trend for DUF6 conversion services by the Department of Energy?
Historical spending on DUF6 conversion services by the Department of Energy has been significant, reflecting the long-term challenge of managing this hazardous material. Prior to the current contract awarded in 2016, the DOE had various initiatives and contracts aimed at addressing the DUF6 inventory. The scale of the current $972.5 million contract suggests a sustained commitment to resolving this issue over an extended period. Analyzing past contract awards, budget allocations for environmental management, and the progress of previous conversion efforts would provide a clearer picture of the historical financial commitment and the evolution of strategies for DUF6 management. This context is crucial for understanding the current contract's place within the DOE's broader environmental remediation efforts and its long-term financial implications.
How does the performance of Mid-America Conversion Services, LLC compare to industry benchmarks for similar environmental remediation projects?
Assessing the performance of Mid-America Conversion Services, LLC against industry benchmarks requires access to detailed performance metrics and award fee determinations, which are often not publicly available. However, the contract's Cost Plus Award Fee (CPA F) structure implies that performance is actively measured against specific criteria. Positive award fee payments would indicate performance meeting or exceeding expectations. Benchmarking would involve comparing key performance indicators such as cost control, schedule adherence, safety records, and technical quality against similar large-scale hazardous material processing contracts managed by other federal agencies (e.g., EPA, DoD) or large private sector environmental firms. Without specific performance data, a definitive comparison is challenging, but the continued operation and potential for award fees suggest satisfactory performance to date.
What are the primary risks associated with the operation of depleted uranium hexafluoride (DUF6) conversion facilities?
The primary risks associated with DUF6 conversion facilities are multifaceted, stemming from the hazardous nature of the material itself and the complexity of the conversion process. Technologically, there are risks related to the chemical reactions involved, potential equipment failures, and the safe handling of highly corrosive and radioactive substances. Environmentally, the main risk is the potential for accidental releases of DUF6 or its byproducts, which could contaminate soil, water, or air. Safety risks include potential exposure to personnel involved in operations and maintenance. Furthermore, there are regulatory risks associated with compliance with stringent environmental and nuclear safety standards, and security risks related to the safeguarding of nuclear materials. Effective risk management requires robust engineering controls, comprehensive safety protocols, rigorous training, and continuous monitoring.
What is the projected cost per unit of DUF6 processed under this contract, and how does it compare to previous efforts or alternative technologies?
Determining the precise projected cost per unit of DUF6 processed under this contract is complex, as the total contract value covers a range of activities beyond just the conversion itself, including facility operation, maintenance, and potentially waste disposal. The Cost Plus Award Fee (CPA F) structure means actual costs can vary. To establish a per-unit cost, one would need to divide the total anticipated costs by the total estimated volume of DUF6 to be processed over the contract's life. Benchmarking this figure against historical DUF6 conversion efforts or alternative technologies (if any exist and are viable) is crucial for assessing value. Given the specialized nature of DUF6 conversion, costs are likely to be high compared to less hazardous materials. Publicly available data on specific per-unit costs for DUF6 conversion is scarce, making direct comparison difficult without detailed contract cost breakdowns.
How does the Department of Energy ensure accountability and transparency in the management of the DUF6 conversion program?
The Department of Energy employs several mechanisms to ensure accountability and transparency in managing the DUF6 conversion program. Contractually, the CPA F structure mandates detailed reporting on performance, costs, and schedule, with award fees contingent on meeting predefined metrics. This requires the contractor to be transparent about their operations and outcomes. Programmatic oversight is provided by DOE contracting officers and technical experts who monitor progress and adherence to requirements. Furthermore, the DOE's Office of Inspector General (OIG) provides an independent layer of oversight, conducting audits and investigations to detect and prevent fraud, waste, and abuse. Publicly, the DOE often publishes environmental reports and performance summaries related to its cleanup programs, which may include updates on DUF6 conversion activities, contributing to overall transparency.
Industry Classification
NAICS: Manufacturing › Basic Chemical Manufacturing › Other Basic Inorganic Chemical Manufacturing
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
Solicitation ID: DE-SOL-0007016
Offers Received: 5
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Address: 1009 COMMERCE PARK DR, SUITE 100, OAK RIDGE, TN, 37830
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Not Designated a Small Business, Special Designations
Financial Breakdown
Contract Ceiling: $1,076,238,218
Exercised Options: $1,076,238,218
Current Obligation: $972,505,087
Actual Outlays: $616,495,555
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2016-09-29
Current End Date: 2025-09-30
Potential End Date: 2025-09-30 00:00:00
Last Modified: 2026-01-13
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