Naval Sea Systems Command contract for nuclear reactors awarded to Bechtel Plant Machinery Inc. for $12.5M

Contract Overview

Contract Amount: $12,548,770 ($12.5M)

Contractor: Bechtel Plant Machinery, Inc.

Awarding Agency: Department of Defense

Start Date: 2000-10-16

End Date: 2014-04-08

Contract Duration: 4,922 days

Daily Burn Rate: $2.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: 200111!015358!1700!BZ002 !NAVAL SEA SYSTEMS COMMAND !N0002401C4099 !A!N!*!N! !20001016!20031231!074993825!154287825!049422439!N!BECHTEL PLANT MACHINERY INC !500 PENN CENTER BLVD !PITTSBURGH !PA!15235!61000!003!42!PITTSBURGH !ALLEGHENY !PENN !+000012548770!N!N!000000000000!4470!NUCLEAR REACTORS !A3 !SHIPS !2SBP!CARRIER ACFT NUCLEAR-CVAN !332410!*!*!3! ! ! !*!*!*!B!*!*!A! !D !N!U!1!001!N!1G!A!Y!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! ! ! ! !0001!

Place of Performance

Location: MONROEVILLE, ALLEGHENY County, PENNSYLVANIA, 15146

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $12.5 million to BECHTEL PLANT MACHINERY, INC. for work described as: 200111!015358!1700!BZ002 !NAVAL SEA SYSTEMS COMMAND !N0002401C4099 !A!N!*!N! !20001016!20031231!074993825!154287825!049422439!N!BECHTEL PLANT MACHINERY INC !500 PENN CENTER BLVD !PITTSBURGH !PA!15235!61000!003!42!PITTSBURGH !ALLEG… Key points: 1. Contract awarded for nuclear reactor components, indicating a critical and specialized need within naval operations. 2. The contract's duration of over 4900 days suggests a long-term requirement for maintenance, support, or production. 3. Awarded as a sole-source contract, raising questions about the extent of competition and potential cost efficiencies. 4. The significant value of the contract points to the high cost associated with nuclear technology and defense systems. 5. The contractor, Bechtel Plant Machinery Inc., likely possesses specialized expertise required for nuclear reactor systems. 6. The contract falls under the 'Ships' product service code, aligning with naval vessel construction and maintenance.

Value Assessment

Rating: fair

The contract value of $12.5 million for nuclear reactors is difficult to benchmark without more specific details on the scope of work, such as the number of units, type of reactors, or services provided. Given the sole-source nature, a direct comparison to similar competitively bid contracts is not feasible. The pricing structure (Cost Plus Fixed Fee) can sometimes lead to higher costs if not carefully managed, but it is also appropriate for complex, uncertain projects. Further analysis would require understanding the fixed fee component and the cost base it applies to.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning that only one contractor, Bechtel Plant Machinery, Inc., was solicited. This typically occurs when a unique capability or proprietary technology is required, or in cases of urgent need where competition is not feasible. The lack of competition means that the government did not benefit from a bidding process that could have driven down prices through market forces. The justification for this sole-source award would need to be thoroughly reviewed to ensure it was appropriate.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. Without a competitive process, there is less assurance that the price reflects the best possible value for the government.

Public Impact

The primary beneficiaries are the U.S. Navy, which receives critical components or services for its nuclear-powered vessels. The contract supports the operation and maintenance of nuclear propulsion systems, essential for national defense capabilities. The geographic impact is primarily centered around the contractor's facilities in Pittsburgh, Pennsylvania, and naval bases where the reactors are deployed. The contract likely supports a specialized workforce in engineering, manufacturing, and nuclear technology within Bechtel Plant Machinery, Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially increases costs for taxpayers.
Cost Plus Fixed Fee contract type can incentivize higher spending if cost controls are not robust.
Long contract duration (over 11 years) increases the risk of cost overruns and scope creep without diligent oversight.
Nuclear-related contracts inherently carry high risks due to safety, security, and regulatory requirements.

Positive Signals

Award to an established contractor (Bechtel Plant Machinery, Inc.) suggests access to specialized expertise for critical nuclear systems.
The contract addresses a vital national security need for the Navy's nuclear fleet.
The fixed fee component provides some level of cost predictability for the government, assuming the cost base is well-managed.

Sector Analysis

This contract falls within the Defense Industrial Base sector, specifically focusing on specialized manufacturing and services related to nuclear propulsion. The market for nuclear reactor components and services for naval applications is highly concentrated, often dominated by a few firms with the necessary security clearances and technical expertise. Comparable spending benchmarks are difficult to establish due to the unique nature of naval nuclear technology and the sole-source award. The industry is characterized by high barriers to entry, stringent regulatory oversight, and long product lifecycles.

Small Business Impact

This contract does not appear to have a small business set-aside component, as it was awarded to Bechtel Plant Machinery, Inc., a large corporation. There is no explicit information regarding subcontracting plans for small businesses within the provided data. The focus on specialized nuclear technology suggests that prime contracting opportunities for small businesses may be limited, though they could potentially participate as subcontractors for less specialized components or services if Bechtel engages in subcontracting.

Oversight & Accountability

Oversight for this contract would primarily fall under the Naval Sea Systems Command (NAVSEA) and potentially the Defense Contract Management Agency (DCMA). As a sole-source award for nuclear systems, rigorous oversight is expected regarding cost, schedule, performance, and safety compliance. Transparency may be limited due to the sensitive nature of defense contracts and sole-source justifications. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse related to the contract.

Related Government Programs

Naval Nuclear Propulsion Program
Shipbuilding and Repair Contracts
Defense Manufacturing Contracts
Nuclear Power Generation Equipment

Risk Flags

Sole-source award may limit cost savings.
Long contract duration increases risk of cost escalation and obsolescence.
CPFF contract type requires robust cost oversight.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.5 million to BECHTEL PLANT MACHINERY, INC.. 200111!015358!1700!BZ002 !NAVAL SEA SYSTEMS COMMAND !N0002401C4099 !A!N!*!N! !20001016!20031231!074993825!154287825!049422439!N!BECHTEL PLANT MACHINERY INC !500 PENN CENTER BLVD !PITTSBURGH !PA!15235!61000!003!42!PITTSBURGH !ALLEGHENY !PENN !+000012548770!N!N!000000000000!4470!NUCLEAR REACTORS !A3 !SHIPS !2SBP!CARRIER ACFT NUCLEAR-CVAN !332410!*!*!3! ! ! !*!*!*!B!*!*!A!

Who is the contractor on this award?

The obligated recipient is BECHTEL PLANT MACHINERY, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $12.5 million.

What is the period of performance?

Start: 2000-10-16. End: 2014-04-08.

What specific nuclear reactor components or services were procured under this contract?

The provided data indicates the contract is for 'Nuclear Reactors' (NAICS 332410 - Power Boiler and Heat Exchanger Manufacturing). However, the specific components or services are not detailed. This could range from the manufacturing of reactor vessels, fuel components, control systems, or ongoing maintenance and support services for existing naval nuclear reactors. Without further details, it's impossible to ascertain the exact scope. The Product Service Code (PSC) is listed as 'A3' which typically relates to 'Weapons Systems Components', further suggesting a critical defense application.

What is the justification for the sole-source award to Bechtel Plant Machinery, Inc.?

The data indicates the contract was 'NOT COMPETED' and awarded as a 'SOLE SOURCE'. The specific justification is not provided in the abbreviated data. Typically, sole-source awards are justified based on factors such as the unique capability of the contractor, the need for compatibility with existing systems, urgent and compelling circumstances, or the proprietary nature of the technology. For nuclear systems, specialized knowledge, security clearances, and extensive experience are often prerequisites, potentially limiting the pool of eligible contractors. A formal justification document would normally be required by federal acquisition regulations.

How does the Cost Plus Fixed Fee (CPFF) pricing structure impact the value for money in this contract?

The Cost Plus Fixed Fee (CPFF) structure means the contractor is reimbursed for allowable costs plus a predetermined fixed fee. This structure is often used for research and development or complex projects where the final cost is uncertain. While the fixed fee provides some cost certainty for the contractor and incentivizes them to control costs to maximize profit, it can also lead to higher overall costs for the government compared to fixed-price contracts if the estimated costs are high or if cost controls are weak. Effective oversight is crucial to ensure that costs are reasonable and allowable, and that the fixed fee represents fair compensation for the work performed.

What is the historical spending pattern for nuclear reactors by the Naval Sea Systems Command?

The provided data represents a single contract awarded on 2000-10-16 with an estimated value of $12.5 million and an end date of 2014-04-08 (though the initial period ended 2003-12-31, suggesting modifications or extensions). To understand historical spending patterns, one would need to analyze all contracts awarded by NAVSEA for 'Nuclear Reactors' or related services over a longer period. This would involve querying contract databases for similar NAICS codes (like 332410) or PSCs (like A3) awarded by NAVSEA. Without this broader dataset, it's impossible to establish trends, identify significant increases or decreases in spending, or compare this specific contract's value to historical norms.

What are the potential risks associated with the long duration of this contract?

This contract has a total duration of approximately 4922 days (over 13 years), from the award date of 2000-10-16 to the final edge date of 2014-04-08. Long-duration contracts, especially those involving complex technology like nuclear reactors, carry several risks. These include the potential for cost escalation due to inflation or unforeseen technical challenges, scope creep where the project expands beyond its original intent, and technological obsolescence if the systems or components become outdated during the contract period. Maintaining consistent oversight and effective contract management over such an extended period is critical to mitigate these risks and ensure the contract remains aligned with evolving requirements and budgets.

Industry Classification

NAICS: Manufacturing › Boiler, Tank, and Shipping Container Manufacturing › Power Boiler and Heat Exchanger Manufacturing

Product/Service Code: FURNACE/STEAM/DRYING; NUCL REACTOR

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Bechtel Group, Inc.

Address: 3500 TECHNOLOGY DR, MONROEVILLE, PA, 15146

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline