Todd Jacobson
NS&D Monitor
10/31/2014
With about 11 months left before Honeywell Federal Manufacturing & Technologies’ contract to run the National Nuclear Security Administration’s Kansas City National Security Campus expires, NNSA Administrator Frank Klotz said this week that an announcement on the contract will come “very soon.” Honeywell’s contract to run the plant expires Sept. 30, 2015, and Energy Secretary Ernest Moniz said in August that he hoped a decision on whether or not to provide an extension would be made a year in advance of the contract’s expiration, but gave few hints about plans for the contract. Klotz followed suit at a Defense Writers Group event this week, disclosing no details about whether NNSA plans to extend Honeywell’s contract or open up the first major management and operating contract procurement since Y-12/Pantex. “You can expect an announcement on Kansas City very soon, and you’ll have to wait until the announcement to hear what it will have to say,” Klotz said.
The Kansas City contract is the first of three major site M&O contracts that expire in the next two-and-a-half years; National Security Technologies’ Nevada National Security Site contract expires in September 2016, and Lockheed Martin’s Sandia National Laboratories contract runs out in April 2016, though there is an option for another year to be added. “The approach in the past was to deal with each of those in sufficient time to make sure you have time to do all the various steps in the process of coming up with a new contract when the expiration comes up,” Klotz said. “My expectation is we will probably take them as they come due.”
How Much Will Performance Factor Into Decision?
Moniz and Klotz visited the Kansas City National Security Campus in August, touring the newly completed facility, and as Moniz said a decision on the contract was looming, he also said past performance was a “major consideration.” Incumbent contractor Honeywell Federal Manufacturing and Technologies has long been one of the NNSA’s most reliable contractors, and it facilitated a move into the new facility that was completed a month early and approximately $16 million under budget while continuing to meet 99.9 percent of scheduled deliverables. DOE, however, issued a Request for Information in June that appeared tailored toward figuring out how to generate interest in the contract.
When the contract was last competed in 2000, Honeywell won without any competition and has been one of the highest performing contractors in the weapons complex over the last decade. Honeywell led all NNSA contractors in Fiscal Year 2013 by earning 94 percent of its at-risk fee, or $28.2 million out of $30 million that was available. It also earned another $15.7 million for non-NNSA work.
Despite Honeywell’s performance, industry officials have suggested that there could be competition for the contract, with top Pentagon contractors like Lockheed Martin, Boeing, Northrop Grumman, General Dynamics, and Raytheon show interest along with IBM and Babcock & Wilcox. Bidders could be lured by the lucrative fee to run the plant, which is about 7 percent—the highest in the weapons complex.
