Navy Awards $803M Contract for Nuclear Reactors to Westinghouse Electric Company

Contract Overview

Contract Amount: $316,605,455 ($316.6M)

Contractor: Bechtel Plant Machinery, Inc.

Awarding Agency: Department of Defense

Start Date: 1996-10-25

End Date: 2013-09-23

Contract Duration: 6,177 days

Daily Burn Rate: $51.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: 199702!1700!0170!BZ004!NAVAL SEA SYSTEMS COMMAND !N0002496C4050 !A!*!P00003 !19961025!20030930!803199769!803199769!001343953!N!79500!WESTINGHOUSE ELECTRIC COMPANY,!11 STANWIX ST !PITTSBURGH !PA!15222!85192!003!42!WILKINS TOWNSHIP !ALLEGHENY !PENN !0001!+000047476078!N!N!000000000000!4470!NUCLEAR REACTORS !A3 !SHIPS !2000!NOT DISCERNABLE OR CLASSIFIED !3443!3!*!*!B!B!A!*!D !N!U!1!001!N!1A!A!Y!Z!* !* !N!C!*!A!A!A!A!A!*!* !*!N!A!C!N!*!*!*!*!*!

Place of Performance

Location: SCHENECTADY, SCHENECTADY County, NEW YORK, 12305

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $316.6 million to BECHTEL PLANT MACHINERY, INC. for work described as: 199702!1700!0170!BZ004!NAVAL SEA SYSTEMS COMMAND !N0002496C4050 !A!*!P00003 !19961025!20030930!803199769!803199769!001343953!N!79500!WESTINGHOUSE ELECTRIC COMPANY,!11 STANWIX ST !PITTSBURGH !PA!15222!85192!003!42!WILKINS TOWNSHIP !ALLEGH… Key points: 1. The contract value is substantial at $803,199,769. 2. Westinghouse Electric Company is the sole awardee, indicating a lack of competition. 3. The contract type is Cost Plus Fixed Fee, which can carry cost overrun risks. 4. The sector is Defense, specifically related to naval nuclear propulsion.

Value Assessment

Rating: questionable

The contract value of $803M for nuclear reactors is significant. Without benchmarks for similar naval nuclear reactor contracts, it's difficult to definitively assess pricing fairness. The Cost Plus Fixed Fee structure warrants scrutiny for potential cost escalations.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning there was no open competition. This significantly limits price discovery and may result in a higher price than if multiple vendors had competed.

Taxpayer Impact: The lack of competition for a large contract like this raises concerns about taxpayer value, as competitive bidding typically drives down costs.

Public Impact

Taxpayers may be paying a premium due to the absence of competitive bidding. The long duration of the contract (over 17 years) suggests a critical, long-term need for these nuclear reactors. The specific use of these reactors for naval applications implies national security implications.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition and price discovery.
Cost Plus Fixed Fee contract type can lead to cost overruns.
Long contract duration increases exposure to market and technological changes.

Positive Signals

Award to established contractor (Westinghouse) may ensure technical expertise.
Contract addresses a critical defense need for naval propulsion.

Sector Analysis

This contract falls within the Defense sector, specifically for the procurement of nuclear reactors for naval applications. Spending in this specialized area is typically high due to the complex technology and stringent safety requirements involved.

Small Business Impact

The awardee, Westinghouse Electric Company, is a large corporation, not a small business. There is no indication of subcontracting opportunities for small businesses within the provided data.

Oversight & Accountability

The sole-source nature of this award suggests limited opportunities for external oversight on pricing. Robust internal oversight by the Department of the Navy is crucial to manage costs and ensure performance.

Related Government Programs

Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Lack of competition
Cost Plus Fixed Fee structure
Long contract duration
Potential for cost overruns
National security implications require careful management

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $316.6 million to BECHTEL PLANT MACHINERY, INC.. 199702!1700!0170!BZ004!NAVAL SEA SYSTEMS COMMAND !N0002496C4050 !A!*!P00003 !19961025!20030930!803199769!803199769!001343953!N!79500!WESTINGHOUSE ELECTRIC COMPANY,!11 STANWIX ST !PITTSBURGH !PA!15222!85192!003!42!WILKINS TOWNSHIP !ALLEGHENY !PENN !0001!+000047476078!N!N!000000000000!4470!NUCLEAR REACTORS !A3 !SHIPS !2000!NOT DISCERNABLE OR CLASSIFIED !3443!3!*!*!B!B!A!*!D !N!U!1!0

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 $316.6 million.

What is the period of performance?

Start: 1996-10-25. End: 2013-09-23.

What is the justification for the sole-source award, and were any attempts made to explore competitive options?

The provided data indicates a sole-source award, suggesting a specific justification was likely cited, such as unique capabilities or national security requirements. However, without further documentation, it's impossible to confirm the validity of this justification or whether alternative procurement strategies were considered. A thorough review would be needed to assess if competition was truly not feasible.

How are cost overruns managed under this Cost Plus Fixed Fee contract, and what are the historical cost performance trends for similar contracts?

Cost Plus Fixed Fee contracts allow the contractor to recover costs plus a predetermined fixed fee. Oversight mechanisms typically involve audits and reviews to ensure costs are reasonable and allocable. Historical data on similar naval nuclear reactor contracts would be essential to benchmark cost performance and identify potential risks associated with this contract's pricing structure.

What are the specific performance metrics and delivery schedules for these nuclear reactors, and how is contract performance being monitored?

The data does not detail specific performance metrics or delivery schedules. Effective contract management would require clear milestones, quality assurance processes, and regular performance reviews by the Naval Sea Systems Command to ensure the reactors meet stringent naval requirements and are delivered on time.

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 ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline