Naval Reactors Contract Awarded to Bechtel Plant Machinery for $682M, Lacking Competition
Contract Overview
Contract Amount: $681,958,926 ($682.0M)
Contractor: Bechtel Plant Machinery, Inc.
Awarding Agency: Department of Defense
Start Date: 2017-12-15
End Date: 2026-11-30
Contract Duration: 3,272 days
Daily Burn Rate: $208.4K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: NAVAL REACTORS
Place of Performance
Location: MONROEVILLE, ALLEGHENY County, PENNSYLVANIA, 15146
Plain-Language Summary
Department of Defense obligated $682.0 million to BECHTEL PLANT MACHINERY, INC. for work described as: NAVAL REACTORS Key points: 1. Significant contract value of $682 million awarded to a single vendor. 2. Lack of competition raises concerns about potential overpricing and reduced innovation. 3. The contract is for Power Boiler and Heat Exchanger Manufacturing, a critical defense sector. 4. Long contract duration of over 8 years suggests a need for ongoing oversight.
Value Assessment
Rating: questionable
The contract's Cost Plus Fixed Fee structure, combined with a lack of competition, makes it difficult to assess value. Without competitive bids, it's hard to benchmark pricing against similar services or products.
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 potentially leads to higher costs for taxpayers as there is no market pressure to offer competitive pricing.
Taxpayer Impact: The absence of competition for a large contract like this may result in inefficient use of taxpayer funds due to potentially inflated costs.
Public Impact
Taxpayers may be paying more than necessary due to the lack of competitive bidding. Critical defense infrastructure relies on this contract, highlighting the importance of efficient spending. The long-term nature of the contract necessitates robust oversight to ensure continued value.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Cost-plus contract type
- Long contract duration
Positive Signals
- Awarded to established company
- Supports critical defense function
Sector Analysis
This contract falls within the Power Boiler and Heat Exchanger Manufacturing sector, crucial for naval operations. Spending in this specialized manufacturing area can be high due to technical requirements and limited suppliers.
Small Business Impact
The contract data indicates that small businesses were not involved in this award, as the 'sb' field is false. This suggests a missed opportunity to support small business participation in defense contracting.
Oversight & Accountability
The 'NOT COMPETED' status and 'COST PLUS FIXED FEE' contract type warrant close scrutiny. Robust oversight is essential to ensure that costs are reasonable and that the government receives good value throughout the contract's life.
Related Government Programs
- Power Boiler and Heat Exchanger Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Lack of competition
- Sole-source award
- Cost-plus contract type
- Potential for cost overruns
- Limited transparency in pricing
Tags
power-boiler-and-heat-exchanger-manufact, department-of-defense, pa, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $682.0 million to BECHTEL PLANT MACHINERY, INC.. NAVAL REACTORS
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 $682.0 million.
What is the period of performance?
Start: 2017-12-15. End: 2026-11-30.
What specific justifications were provided for not competing this contract, and do they align with federal procurement regulations for sole-source awards?
The provided data does not include the specific justifications for the sole-source award. Federal regulations typically allow for sole-source procurement under specific circumstances, such as when only one responsible source can provide the required supplies or services. A thorough review of the justification documentation is necessary to ensure compliance and prevent potential misuse of sole-source authority.
How will the Department of the Navy ensure cost control and fair pricing under this Cost Plus Fixed Fee contract, given the lack of competition?
With a Cost Plus Fixed Fee structure and no competition, the Department of the Navy must implement stringent cost monitoring and auditing processes. This includes detailed review of incurred costs, verification of allowable expenses, and ensuring the fixed fee remains appropriate for the effort. Regular performance reviews and benchmarking against industry standards, where possible, are crucial.
What is the long-term strategy for fostering competition in the Power Boiler and Heat Exchanger Manufacturing sector to avoid future sole-source awards?
The long-term strategy should involve market research to identify potential new entrants and encourage their development. This could include breaking down large requirements into smaller, more accessible contracts, offering incentives for innovation, and supporting workforce development in this specialized field. Proactive engagement with industry can help build a more competitive landscape.
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
Solicitation ID: N0002417R2124
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, Corporate Entity Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $681,958,926
Exercised Options: $681,958,926
Current Obligation: $681,958,926
Subaward Activity
Number of Subawards: 53
Total Subaward Amount: $165,996,143
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2017-12-15
Current End Date: 2026-11-30
Potential End Date: 2026-11-30 00:00:00
Last Modified: 2018-04-30
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