Naval Sea Systems Command Awards $239.7M Contract for Nuclear Reactors to Westinghouse Electric Corp

Contract Overview

Contract Amount: $239,750,107 ($239.8M)

Contractor: Bechtel Plant Machinery, Inc.

Awarding Agency: Department of Defense

Start Date: 1998-12-09

End Date: 2015-09-30

Contract Duration: 6,139 days

Daily Burn Rate: $39.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: 199903!1700!0720!BZ004!NAVAL SEA SYSTEMS COMMAND !N0002499C4006 !A!*!* !19981209!20041231!931605000!803199769!001343953!N!79500!WESTINGHOUSE ELECTRIC CORP !P O BOX 425 !MONROEVILLE !PA!15146!61000!003!42!PITTSBURGH !ALLEGHENY !PENN !0001!+000118283717!N!N!000000000000!4470!NUCLEAR REACTORS !A3 !SHIPS !2SDA!SSN-21 SEAWOLF CLASS !3511!3!*!*!*!B!A!*!D !U!U!1!001!N!1A!A!Y!Z!* !* !N!C!*!A!A!A!A!A!*!* !*!N!A!D!N!*!*!*!*!*!

Place of Performance

Location: MONROEVILLE, ALLEGHENY County, PENNSYLVANIA, 15146

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $239.8 million to BECHTEL PLANT MACHINERY, INC. for work described as: 199903!1700!0720!BZ004!NAVAL SEA SYSTEMS COMMAND !N0002499C4006 !A!*!* !19981209!20041231!931605000!803199769!001343953!N!79500!WESTINGHOUSE ELECTRIC CORP !P O BOX 425 !MONROEVILLE !PA!15146!61000!003!42!PITTSBURGH !ALLEGH… Key points: 1. The contract, valued at $239.7 million, is for nuclear reactors, specifically for the SSN-21 Seawolf class submarines. 2. Westinghouse Electric Corp. is the contractor, with a primary location in Monroeville, PA. 3. The contract was awarded as a definitive contract, not competed, indicating potential sole-source or limited competition. 4. The sector is Defense, with the contract falling under shipbuilding and repair.

Value Assessment

Rating: questionable

The contract value is substantial at $239.7 million. Without comparable contracts for similar nuclear reactor systems for submarines, a precise pricing assessment is difficult. The cost-plus-fixed-fee structure suggests potential for cost overruns.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was 'NOT COMPETED', suggesting a limited competition or sole-source award. This limits price discovery and potentially leads to higher costs for the government.

Taxpayer Impact: The lack of robust competition for a contract of this magnitude raises concerns about taxpayer value and the potential for inflated pricing.

Public Impact

This contract directly impacts national security by supporting the U.S. Navy's submarine fleet. The long duration (over 16 years) suggests a critical, long-term need for these nuclear reactor components. The significant investment in nuclear propulsion highlights the ongoing reliance on this technology for naval power projection.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Cost-plus-fixed-fee contract type
Long contract duration

Positive Signals

Supports critical national defense infrastructure
Established contractor with relevant experience

Sector Analysis

This contract falls within the Defense sector, specifically related to naval shipbuilding and nuclear propulsion systems. Spending benchmarks for such specialized components are highly variable and depend on technological complexity and scale.

Small Business Impact

There is no indication in the provided data that small businesses were involved in this contract, either as prime contractors or subcontractors.

Oversight & Accountability

The 'NOT COMPETED' status warrants further oversight to ensure the justification for limited competition was sound and that the pricing was fair and reasonable. Contract modifications and performance reviews would be key oversight areas.

Related Government Programs

Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Lack of competition raises concerns about fair pricing.
Cost-plus-fixed-fee contract type can lead to cost overruns.
Long contract duration may indicate potential for schedule delays or cost increases.
The specific justification for non-competition needs further scrutiny.
Potential for contractor lock-in due to specialized nature of nuclear reactors.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $239.8 million to BECHTEL PLANT MACHINERY, INC.. 199903!1700!0720!BZ004!NAVAL SEA SYSTEMS COMMAND !N0002499C4006 !A!*!* !19981209!20041231!931605000!803199769!001343953!N!79500!WESTINGHOUSE ELECTRIC CORP !P O BOX 425 !MONROEVILLE !PA!15146!61000!003!42!PITTSBURGH !ALLEGHENY !PENN !0001!+000118283717!N!N!000000000000!4470!NUCLEAR REACTORS !A3 !SHIPS !2SDA!SSN-21 SEAWOLF CLASS !3511!3!*!*!*!B!A!*!D !U!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 (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $239.8 million.

What is the period of performance?

Start: 1998-12-09. End: 2015-09-30.

What was the specific justification for not competing this nuclear reactor contract, and were alternative solutions considered?

The justification for not competing this contract is not detailed in the provided data. Typically, non-competitive awards are made when only one responsible source can provide the required supplies or services, or in cases of urgent and compelling need. A thorough review would examine the technical uniqueness of the nuclear reactors for the Seawolf class and whether other qualified manufacturers could have met the requirements.

How does the cost-plus-fixed-fee structure impact the government's risk and the contractor's incentive for cost control on this nuclear reactor contract?

The cost-plus-fixed-fee (CPFF) structure means the contractor is reimbursed for allowable costs plus a fixed fee. While the fee provides some incentive for the contractor to control costs (as it's fixed), the government bears the primary risk of cost overruns. This structure is often used when the scope of work is not precisely defined or involves significant technical uncertainty, but it requires diligent government oversight to manage costs effectively.

What is the long-term strategic value and potential obsolescence risk associated with these nuclear reactors for the SSN-21 Seawolf class?

The long-term strategic value lies in maintaining the operational capability of the Seawolf class submarines, which are critical assets for national security. However, the SSN-21 class is an older design, and the long contract duration (ending in 2015) raises questions about the reactors' technological relevance and potential obsolescence compared to newer submarine designs and propulsion systems. Assessing future sustainment and upgrade needs is crucial.

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