Todd Jacobson
NS&D Monitor
2/27/2015
Past performance is likely to remain heavily weighted in future National Nuclear Security Administration management-and-operating procurements, but decisions will be made on a case-by-case basis, NNSA Acquisition and Project Management chief Bob Raines said last week. Speaking on the sidelines of the Seventh Annual Nuclear Deterrence Summit, Raines declined to comment on the status of the new Kansas City National Security Campus procurement, which included a Request for Proposals that placed a heavy emphasis on past performance. But Raines noted that past performance had been strongly emphasized in the NNSA’s last two procurements, for Kansas City and the Y-12/Pantex combined M&O contract.
In the Kansas City procurement, past performance was more strongly emphasized over other evaluation criteria like plant organization/key personnel and small business participation. Cost savings were an important factor in the Y-12/Pantex procurement, with past performance ranked as a lower priority than cost savings in the evaluation of the M&O portion of the contract. Past performance was the top priority along with project management approach in the evaluation criteria for construction of the Uranium Processing Facility. Past performance was also a heavily weighted factor in the Enterprise Construction Management Services contract that went to Parsons in 2012.
Past performance will “always be a part” of NNSA M&O procurements but it will be “on a case-by-case basis when the acquisition strategy team gets put together and says what do we need for this particular function?” Raines said. “So a plant is different than a lab is different than a combination lab and plant is different than a straight out construction project. We always look and see what we are buying. What do we think the universe of factors are? And then we will pick from that suite to make sure we can put together the best RFP to get the best contractors involved.”
The NNSA is believed to have received two bids for the Kansas City contract: from incumbent Honeywell Federal Manufacturing & Technologies and from former Y-12 and Pantex contractor Babcock & Wilcox. “The message to me is the contractors are happy with the way we’re doing our procurements,” Raines said.
Raines: Hard Line Approach on Projects Working
During his speech at the Nuclear Deterrence Summit, Raines noted that performance on NNSA construction projects over the last three years has improved. He said $800 million in projects had been delivered $60 million under budget, with only two projects over budget. “Those were kind of old projects and they delivered like 8 to 10 percent over budget,” Raines said. “We’re not proud of that but it’s much better than the old days.” Raines credited a strengthened project management approach based on clearly defining roles and responsibilities, appropriate front-end planning, and an increase on accountability.
Notably, the NNSA has taken a harder line with contractors, seeking to claw back fee in cases that have involved performance issues. The Los Alamos National Laboratory M&O contract is the most high profile example where the NNSA zeroed out the performance fee for Bechtel- and University of California-led Los Alamos National Security, LLC, and revoked a previously granted award term extension. The agency also took a hard line on the Waste Solidification Building project at the Savannah River Site and the Nuclear Materials Safeguards and Security Upgrades Project at Los Alamos, and Raines said the results have been noticeable. “What’s happened is because we have done some of those things our partners are now putting the right talent on the project from the beginning,” Raines said. “So now we’re estimating them right, we’re planning them right, we’re putting the right project management people on them. If they have problems, they see it fast, they fix it. That’s why we’re delivering jobs under budget and under schedule. It’s because our teams, who I have said over and over again are made of the best companies in the country, are now giving us the best people from their companies to deliver the hardest jobs that are built in America.”
Fixed-Price For the Future
Raines also emphasized that the NNSA would continue to increase its reliance on fixed-price contracts as much as possible. “It’s no secret fixed-price gets the best people because there is the most risk there,” Raines said, noting that projects like standard commercial facilities, administrative facilities, light laboratories and fire stations would all be done as fixed-price contracts. “We’re going to fixed-price it with the [Army] Corps [of Engineers], we’re going to fixed-price it fed direct with NNSA, or with our M&O partners,” he said. “But it will be fixed-price.”
He said future work like relocating Bear Creek Road at the Y-12 National Security Complex, which is part of the Uranium Processing Facility project, would be competed as a fixed-price contract, as would the High Explosives Science and Engineering facility planned for the Pantex Plant, which he said is a $100 million project. He also said the NNSA would be open to hybrid contracts like what is being utilized on the TRU Waste Processing Facility at Los Alamos National Laboratory, where in a pilot project, the contractor can increase its fee by coming in under budget and ahead of schedule but would also be penalized if there are overruns on the project. “I’m glad to say that project is delivering right now under budget and on schedule,” Raines said. “I think that incentive is going to work. We did that as a pilot because we want to show people, ‘Hey, this can be done.’ We want to then export that to the other folks to see what kind of projects we have out there where we have a better ability to deliver value for the taxpayer.”
