DoD Awards $280M for S9G Reactor Components to Bechtel, Lacking Competition
Contract Overview
Contract Amount: $279,836,930 ($279.8M)
Contractor: Bechtel Plant Machinery, Inc.
Awarding Agency: Department of Defense
Start Date: 2006-10-17
End Date: 2023-09-30
Contract Duration: 6,192 days
Daily Burn Rate: $45.2K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: S9G REACTOR COMPONENTS.
Place of Performance
Location: SCHENECTADY, SCHENECTADY County, NEW YORK, 12305, UNITED STATES OF AMERICA
State: New York Government Spending
Plain-Language Summary
Department of Defense obligated $279.8 million to BECHTEL PLANT MACHINERY, INC. for work described as: S9G REACTOR COMPONENTS. Key points: 1. Significant contract value of $279.8 million for specialized reactor components. 2. Sole-source award to Bechtel Plant Machinery, Inc. raises competition concerns. 3. Long contract duration (2006-2023) suggests potential for cost overruns. 4. Focus on shipbuilding and repair sector, critical for naval readiness.
Value Assessment
Rating: questionable
The contract's Cost Plus Fixed Fee (CPFF) structure, combined with a lack of competition, makes a definitive pricing assessment difficult. The award value of $279.8 million is substantial, but without comparable contracts, it's hard to benchmark against market rates.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to Bechtel Plant Machinery, Inc. This significantly limits price discovery and potentially leads to higher costs for taxpayers as competitive pressures are absent.
Taxpayer Impact: The lack of competition on a nearly $280 million contract raises concerns about taxpayer value. Without competitive bidding, the government may be overpaying for these critical reactor components.
Public Impact
Impacts naval fleet readiness and maintenance capabilities. Potential for long-term reliance on a single supplier for critical components. Raises questions about the government's procurement strategy for specialized defense assets.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Cost-plus contract type
- Long contract duration
- High dollar value
Positive Signals
- Critical component for naval operations
- Established contractor with relevant experience
Sector Analysis
This contract falls within the shipbuilding and repair sector, specifically for nuclear reactor components. Spending in this niche area is highly specialized and often involves limited suppliers due to technical expertise and security requirements.
Small Business Impact
There is no indication that small businesses were involved in this contract, either as prime contractors or subcontractors. The specialized nature of nuclear reactor components likely limits opportunities for small business participation.
Oversight & Accountability
The long duration and sole-source nature of this contract warrant close oversight to ensure cost control and performance. Regular reviews of the contractor's performance and cost submissions are crucial for accountability.
Related Government Programs
- Ship Building and Repairing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Sole-source award limits competition and price discovery.
- Cost-plus contract type shifts cost overrun risk to the government.
- Long contract duration (17 years) increases potential for cost escalation.
- Lack of transparency regarding justification for sole-source procurement.
- Potential for vendor lock-in with a single supplier.
Tags
ship-building-and-repairing, department-of-defense, ny, dca, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $279.8 million to BECHTEL PLANT MACHINERY, INC.. S9G REACTOR COMPONENTS.
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 (Department of the Navy).
What is the total obligated amount?
The obligated amount is $279.8 million.
What is the period of performance?
Start: 2006-10-17. End: 2023-09-30.
What is the justification for the sole-source award, and were alternative procurement strategies considered?
The justification for a sole-source award is not provided in the data. Typically, sole-source contracts are used when only one responsible source can provide the required supplies or services. However, for a contract of this magnitude and duration, a thorough review of the market and consideration of competitive alternatives would be expected to ensure the best value for the government.
How does the cost-plus fixed fee structure impact cost control for these reactor components?
A Cost Plus Fixed Fee (CPFF) contract allows the contractor to recover all allowable costs plus a predetermined fixed fee. While it incentivizes the contractor to complete the work, it places the risk of cost overruns on the government. Without strong oversight and clear performance metrics, this structure can lead to increased costs, especially over a long contract period.
What is the long-term strategy for ensuring a competitive supply chain for S9G reactor components beyond this contract?
The provided data does not outline a long-term strategy for ensuring a competitive supply chain. Given the critical nature of these components and the sole-source award, the Department of Defense should proactively explore options for fostering competition or developing alternative sources to mitigate future supply chain risks and ensure cost-effectiveness.
Industry Classification
NAICS: Manufacturing › Ship and Boat Building › Ship Building and Repairing
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. (UEI: 094878980)
Address: 3500 TECHNOLOGY DR, MONROEVILLE, PA, 15146
Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $280,555,005
Exercised Options: $280,555,005
Current Obligation: $279,836,930
Contract Characteristics
Cost or Pricing Data: YES
Timeline
Start Date: 2006-10-17
Current End Date: 2023-09-30
Potential End Date: 2023-09-30 00:00:00
Last Modified: 2015-08-17
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