DOE Releases Updated Draft RFP Sections for Industry Comment
Mike Nartker
WC Monitor
6/5/2015
A provision in the draft Request for Proposals for the new contract to operate the Department of Energy’s two depleted uranium hexafluoride (DUF6) conversion plants that would give DOE wide discretion in how fee can be provided is prompting concern among some industry officials, who have warned that the language could scare off some potential bidders. At issue is a clause in the draft RFP that would give the DOE Fee Determining Official “sole discretion” to determine if the new DUF6 contractor’s performance has been unacceptable, allowing the official to reduce fee or withhold all fee for an evaluation period.
One industry official this week described the provision as “heavy handed,” and warned that it could put too much risk burden on contractors. “Obviously, there has been a trend within some DOE circles to minimize the overall contractor fee potential, but the revised fee language in the DUF6 Updated Draft RFP is even more worrisome,” the industry official said in a written response. “While we certainly agree that contractor performance should impact fee potential, the idea that the FDO may (at his/her sole discretion) withhold the entire performance fee for unacceptable performance based on a subjective evaluation, awards undue control on the FDO, and places the contractor in a tenuous position.”
The industry official went on to say, “The burden of risk is placed entirely on the contractor, which is of concern when considering that satisfactory or poor performance is seldom based on black and white contractor issues. DOE impact on contractor performance is probably not always considered in the subjective evaluation.”
Some industry officials have said the provision could result in DOE seeing a reduced level of competition for the new DUF6 contract, which is being competed on a full-and-open basis. Notably, a pre-solicitation conference DOE held for the new contract in late April appeared to attract heavy industry interest. A DOE official said this week, though, that the Department had not received concerns that the language could impact competition during one-on-one sessions with industry officials.
DOE Moves to Make Contract Run for Full Five Years
The two DUF6 conversion plants, located at DOE’s Portsmouth and Paducah sites, are currently managed by B&W Conversion Services, LLC, under a contract set to expire at the start of 2016. The plants are intended to help disposition more than 700,000 metric tons of material stored in thousands of cylinders at the two sites. The new contract will have cost-plus-award-fee contract line item numbers (CLINs) to cover conversion operations; and firm fixed-price CLINs to cover cylinder management activities.
This week, DOE released a set of updated sections of the draft RFP for the new contract for additional industry comment. Among the changes made in the new sections (B, H, L and M) is DOE making the contract run for a full five years, rather than having the contract run for a three-year base period with a two-year option period. DOE also included language as to how bidders’ cost/price proposals will be evaluated. Interested companies have until June 15 to submit comments on the updated sections.
Editor’s Note: This story was updated June 9 to correct the deadline for comments on the updated sections of the DUF6 contract draft RFP.
