Todd Jacobson
NS&D Monitor
11/21/2014
A high emphasis on past performance and a lack of focus on broad manufacturing approaches could dissuade some companies from bidding on the National Nuclear Security Administration’s Kansas City National Security Campus contract, industry officials have told NS&D Monitor. The NNSA said earlier this month that it was planning to recompete the contract, releasing some draft procurement documents, such as a Statement of Work and evaluation criteria, and drawing a lukewarm reaction from industry officials in the process. Comments are due on the NNSA’s draft procurement documents today.
The evaluation criteria, which heavily emphasizes past performance over plant organization/key personnel, and small business participation, as well as a focus on nuclear manufacturing in the Statement of Work has many companies believing it will be hard to unseat incumbent contractor Honeywell Federal Manufacturing & Technologies, which has been one of the NNSA’s top performing contractors in recent years. “That’ll scare off anybody,” said one industry official. “This is a situation where they have not only made past performance the most important criteria over both the other two. But notice in there they have said there will be an emphasis on Directed Stockpile Work. My God, how many people think they can compete for that? It’s bizarre.”
‘What They Released is Certainly Not Going to Encourage New Bidders’
Another industry official said the procurement documents released have had a chilling effect, especially on companies outside the normal Department of Energy market. The contract has drawn interest from top Pentagon contractors like Lockheed Martin, Boeing, Northrop Grumman, General Dynamics, BAE Systems, and Raytheon along with IBM and Babcock & Wilcox. “What they released is certainly not going to encourage new bidders,” the industry official said. Another official said, “You have to ask yourself what they are really asking for here? Are they asking for someone new, or is this geared for Honeywell?”
The industry official noted that DOE/NNSA often says that it is trying to level the playing field for competitions. “They want to level the playing field because otherwise it makes no sense to make people spend this bid and proposal money,” the official said. “This is the classic example where they’ve done just the opposite.” However, a fourth industry official said the focus on nuclear manufacturing in the draft procurement documents was appropriate. “You’re going to get what you ask for,” the official said. “If they’re looking for nuclear component manufacturing, they shouldn’t be looking for someone who does it tangentially. They should be looking companies who do nuclear manufacturing in a big way.”
NNSA: ‘We’re Looking Forward to a Robust Competition’
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.
Bob Raines, the NNSA’s Associate Administrator for Acquisition and Project Management, said this week at the Energy, Technology and Environmental Business Association annual meeting in Knoxville, Tenn., that the agency was expecting competition for the contract. “We’re looking forward to a robust competition,” he said. “Through our initial discussions we believe we’re going to get a lot of competition and we’re looking forward to a great award.”
In an email exchange with NS&D Monitor, he noted that there was criticism of another previous APM procurement, the Enterprise-wide Construction Management Services contract. He said there was industry sentiment that there would not be competition, “yet we received many bids from very large and competent contractors.” The contract was ultimately awarded to Parsons.
During the ETEBA conference, Raines said the NNSA was competing the contract to drive stability in Kansas City. “By going through this competition now we will put a competition in place in a year that has an opportunity to run for 10 years,” he said. “That’s the kind of stability our workforce wants and it’s the kind of stability that allows us and our partners to improve the way we’re operating our plant,” Raines said.
Lack of Draft RFP Concerns Industry Officials
Industry officials have also criticized the NNSA for releasing the draft Statement of Work and evaluation criteria and not planning a full draft Request for Proposals. The NNSA has said it will release a Request for Proposals in December and hopes to complete the procurement by the time Honeywell’s contract expires in September of next year. Industry officials have also been critical of the NNSA’s decision not to release the membership of the Source Evaluation Board for the procurement as well as the identity of the Source Selection Authority. “Typically, not releasing a draft RFP and using a ‘tried and true’ model for the solicitation will tend to discourage competition,” the official said. “NNSA should engage in one-on-one discussion during this period, [and] indicate to industry who the source selection authority is and the SEB membership.”
Another industry official said a major procurement like for the Kansas City contract calls for a longer procurement process. “Why are they abridging the normal procurement process for such a significant and important job? Is it because they’re late and they want to ram it through and not have anyone notice and give this this thing to Honeywell? Why are they ram-rodding this through? It’s a big job, and there are lots of companies that can do the job and a proportional procurement is necessary. That, more than anything, is going to kill competition.”
