DOE Awards $41.7B NTESS Contract for Sandia National Labs Management and Operations
Contract Overview
Contract Amount: $41,728,778,748 ($41.7B)
Contractor: National Technology & Engineering Solutions of Sandia, LLC
Awarding Agency: Department of Energy
Start Date: 2017-01-18
End Date: 2027-04-30
Contract Duration: 3,754 days
Daily Burn Rate: $11.1M/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 4
Pricing Type: COST PLUS FIXED FEE
Sector: Other
Official Description: IGF::CL,CT::IGF CONTRACT AWARD DE-NA0003525 TO THE NATIONAL TECHNOLOGY&ENGINEERING SOLUTIONS OF SANDIA, LLC (NTESS) FOR THE MANAGEMENT AND OPERATION OF THE DEPARTMENT OF ENERGY, NATIONAL NUCLEAR SECURITY ADMINISTRATION'S SANDIA NATIONAL LABORATORIES (SNL)
Place of Performance
Location: ALBUQUERQUE, BERNALILLO County, NEW MEXICO, 87185
Plain-Language Summary
Department of Energy obligated $41.73 billion to NATIONAL TECHNOLOGY & ENGINEERING SOLUTIONS OF SANDIA, LLC for work described as: IGF::CL,CT::IGF CONTRACT AWARD DE-NA0003525 TO THE NATIONAL TECHNOLOGY&ENGINEERING SOLUTIONS OF SANDIA, LLC (NTESS) FOR THE MANAGEMENT AND OPERATION OF THE DEPARTMENT OF ENERGY, NATIONAL NUCLEAR SECURITY ADMINISTRATION'S SANDIA NATIONAL LABORATORIES (SNL) Key points: 1. Significant long-term contract for critical national security infrastructure. 2. NTESS is the sole incumbent contractor, raising questions about competition. 3. High value contract with a Cost Plus Fixed Fee structure. 4. Facilities Support Services sector, essential for government operations.
Value Assessment
Rating: questionable
The Cost Plus Fixed Fee (CPFF) structure can incentivize cost overruns, especially for long-term, complex operations. Without clear performance metrics and robust oversight, the pricing may not reflect optimal value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
While awarded under full and open competition, the nature of managing a national laboratory often leads to incumbent advantage. The price discovery relies heavily on the initial proposal and subsequent negotiations.
Taxpayer Impact: Taxpayers bear the cost of managing a critical national asset, with the CPFF structure potentially leading to higher overall expenditures if not tightly managed.
Public Impact
Ensures continued operation of a vital national security research facility. Supports thousands of jobs in New Mexico. Potential for technological advancements and scientific discoveries stemming from the lab's work.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee structure
- Long-term contract duration
- Sole incumbent contractor
Positive Signals
- Critical national security function
- Full and open competition awarded
Sector Analysis
This contract falls within Facilities Support Services, a broad category encompassing the management and maintenance of government facilities. Benchmarks are difficult due to the unique nature of national laboratories.
Small Business Impact
The data indicates this contract was not set aside for small businesses and the prime contractor is a large entity. Subcontracting opportunities for small businesses may exist but are not detailed here.
Oversight & Accountability
Oversight is crucial given the contract's value and CPFF structure. The Department of Energy and potentially other oversight bodies must ensure NTESS meets performance objectives and manages costs effectively.
Related Government Programs
- Facilities Support Services
- Department of Energy Contracting
- Department of Energy Programs
Risk Flags
- Potential for cost overruns due to CPFF structure.
- Long contract duration may reduce flexibility and increase risk.
- Incumbent advantage could limit future competition.
- Complexity of managing national laboratories presents inherent risks.
- Dependence on a single contractor for critical infrastructure.
Tags
facilities-support-services, department-of-energy, nm, definitive-contract, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $41.73 billion to NATIONAL TECHNOLOGY & ENGINEERING SOLUTIONS OF SANDIA, LLC. IGF::CL,CT::IGF CONTRACT AWARD DE-NA0003525 TO THE NATIONAL TECHNOLOGY&ENGINEERING SOLUTIONS OF SANDIA, LLC (NTESS) FOR THE MANAGEMENT AND OPERATION OF THE DEPARTMENT OF ENERGY, NATIONAL NUCLEAR SECURITY ADMINISTRATION'S SANDIA NATIONAL LABORATORIES (SNL)
Who is the contractor on this award?
The obligated recipient is NATIONAL TECHNOLOGY & ENGINEERING SOLUTIONS OF SANDIA, LLC.
Which agency awarded this contract?
Awarding agency: Department of Energy (Department of Energy).
What is the total obligated amount?
The obligated amount is $41.73 billion.
What is the period of performance?
Start: 2017-01-18. End: 2027-04-30.
What specific performance metrics are in place to ensure NTESS delivers value for the $41.7B awarded?
The contract likely includes numerous performance work statements and key performance indicators (KPIs) related to laboratory operations, safety, security, and research output. Robust monitoring by the Department of Energy is essential to track progress against these metrics and ensure taxpayer funds are used efficiently and effectively.
What are the primary risks associated with the Cost Plus Fixed Fee structure for this contract?
The main risk is the potential for cost escalation, as the contractor is reimbursed for allowable costs plus a fixed fee. This can reduce the incentive for cost control. Additionally, defining the 'fixed fee' accurately for such a long-term and complex operation is challenging, potentially leading to disputes or suboptimal contractor motivation.
How does the 'full and open competition' for managing a national laboratory truly foster price discovery?
While 'full and open' implies broad solicitation, the specialized nature of managing a national laboratory often means only a few entities possess the requisite expertise and security clearances. Price discovery relies heavily on the initial proposals and the government's ability to negotiate effectively, rather than a truly competitive market driving down prices.
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
Solicitation ID: DE-SOL-0008470
Offers Received: 4
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Honeywell Safety Products USA, Inc.
Address: 1515 EUBANK SE, ALBUQUERQUE, NM, 87123
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $54,263,677,747
Exercised Options: $54,263,677,747
Current Obligation: $41,728,778,748
Actual Outlays: $24,698,557,671
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2017-01-18
Current End Date: 2027-04-30
Potential End Date: 2027-04-30 00:00:00
Last Modified: 2026-03-31
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