DOE's $265M Nuclear Fuel Contract with Nuclear Fuel Services Inc. Faces Scrutiny Over Competition
Contract Overview
Contract Amount: $265,634,036 ($265.6M)
Contractor: Nuclear Fuel Services Inc
Awarding Agency: Department of Energy
Start Date: 2011-10-20
End Date: 2014-03-31
Contract Duration: 893 days
Daily Burn Rate: $297.5K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE
Sector: Other
Official Description: FUEL PRODUCTION
Place of Performance
Location: ERWIN, UNICOI County, TENNESSEE, 37650
Plain-Language Summary
Department of Energy obligated $265.6 million to NUCLEAR FUEL SERVICES INC for work described as: FUEL PRODUCTION Key points: 1. The contract awarded to Nuclear Fuel Services Inc. for fuel production represents a significant expenditure. 2. Lack of competition raises concerns about potential overpricing and reduced value for taxpayers. 3. The 'NOT COMPETED' status highlights a potential risk in the procurement process. 4. The sector, 'All Other Basic Inorganic Chemical Manufacturing', is critical for energy production.
Value Assessment
Rating: questionable
The contract's value is substantial at $265.6 million. Without competitive bidding, it's difficult to assess if the pricing is optimal compared to market rates for similar fuel production 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 may lead to higher costs for the government as there was no market pressure to offer the best price.
Taxpayer Impact: The absence of competition could result in taxpayers paying more than necessary for essential nuclear fuel production.
Public Impact
Taxpayers may be overpaying due to the lack of competitive bidding. The long duration of the contract (893 days) means potential overpayments could accumulate. Dependence on a single supplier for critical fuel production poses a national security risk.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Potential for overpricing
Positive Signals
- Essential service provided
- Fixed Price Incentive contract type
Sector Analysis
The contract falls under 'All Other Basic Inorganic Chemical Manufacturing', a sector vital for energy production. Benchmarks for this specific niche are hard to establish without competitive data, but the overall chemical manufacturing sector is large and diverse.
Small Business Impact
There is no indication that small businesses were involved in this contract, either as prime contractors or subcontractors. The focus appears to be on a large, established supplier.
Oversight & Accountability
The 'NOT COMPETED' status warrants further oversight to ensure the justification for a sole-source award was robust and that the pricing was fair and reasonable, despite the lack of competition.
Related Government Programs
- All Other Basic Inorganic Chemical Manufacturing
- Department of Energy Contracting
- Department of Energy Programs
Risk Flags
- Lack of competition
- Potential for overpricing
- Sole-source award justification
- Long-term vendor dependency
Tags
all-other-basic-inorganic-chemical-manuf, department-of-energy, tn, dca, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $265.6 million to NUCLEAR FUEL SERVICES INC. FUEL PRODUCTION
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 $265.6 million.
What is the period of performance?
Start: 2011-10-20. End: 2014-03-31.
What was the justification for awarding this contract on a sole-source basis, and was it adequately documented?
The provided data indicates the contract was 'NOT COMPETED'. A thorough review of the Department of Energy's procurement records would be necessary to ascertain the specific justification for this sole-source award. Typically, such justifications require demonstrating that only one responsible source can provide the required supplies or services, or that exceptional circumstances preclude competitive bidding. The adequacy of documentation is crucial for accountability.
How does the per-unit cost of this nuclear fuel production compare to industry benchmarks, given the lack of competition?
Without competitive bidding, establishing a direct per-unit cost benchmark is challenging. The absence of competing offers means there's no market-driven comparison. An independent cost analysis or review of historical pricing for similar government contracts, adjusted for inflation and specific contract terms, would be needed to assess if the pricing is fair and reasonable relative to what could have been achieved through competition.
What are the long-term risks associated with a sole-source contract for critical nuclear fuel production?
Long-term sole-source contracts for critical supplies like nuclear fuel can lead to vendor lock-in, reduced innovation, and potential price escalation over time as competition is absent. It also creates a dependency on a single supplier, which could pose supply chain risks if the supplier faces operational issues or goes out of business. This lack of market pressure can diminish the government's leverage in future negotiations.
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
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: DE-SOL-NR-00004
Offers Received: 1
Pricing Type: FIXED PRICE INCENTIVE (L)
Evaluated Preference: NONE
Contractor Details
Parent Company: BWX Technologies, Inc. (UEI: 968037221)
Address: 1205 BANNER HILL RD, ERWIN, TN, 01
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $272,240,288
Exercised Options: $272,240,288
Current Obligation: $265,634,036
Contract Characteristics
Cost or Pricing Data: YES
Timeline
Start Date: 2011-10-20
Current End Date: 2014-03-31
Potential End Date: 2014-03-31 00:00:00
Last Modified: 2014-07-01
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