Todd Jacobson
NS&D Monitor
12/19/2014
The National Nuclear Security Administration has softened some language in its Kansas City National Security Campus Request for Proposals to attract more competition, but it remains to be seen how many companies will step forward to bid for the contract. Likely in response to concerns from potential bidders, the agency removed an emphasis on Directed Stockpile Work from the evaluation criteria, relaxing the language to a more broad reference to general “production, management, and quality assurance requirements.”
A strong emphasis on past performance and a focus on nuclear manufacturing had industry officials suggesting that companies could pass on bidding when the agency released draft procurement documents last month. The decision to bid has also been made more difficult for interested companies because incumbent Honeywell Federal Manufacturing & Technologies has been one of the top contractors in the weapons complex over the last decade. Industry officials have also noted that the fact the NNSA is not asking for a technical approach from bidders—and only allowing 60 pages for the proposal—is making some companies think twice about bidding. “Frankly it’s scared everybody off,” one industry official told NS&D Monitor. “The criteria, and the order of the criteria, and no technical approach has scared potential teaming partners away.”
One industry official said it was “astounding” that there was no requirement for a technical approach. “It’s really bizarre,” the official said. “For one of the most important facilities in the military/industrial complex, there is no technical approach. It is the most peculiar sets of criteria to hit the street in a long, long time.”
Bids Due Feb. 10
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. It remains to be seen whether the removal of the reference to Directed Stockpile Work in the evaluation criteria will impact their bid decisions.
Bids are due by 2 p.m. Feb. 10. The NNSA said it plans to hold a pre-proposal conference and site tour for the procurement, and it requested companies respond by Jan. 2 about their interest in attending the industry day. According to the RFP, only individuals representing companies that have submitted an offeror intent form may attend the briefing and tour.
Fee to be Lowered to 5.5 Percent
The NNSA is also planning to lower the available fee at the plant. According to information in the RFP, bidders can propose a maximum of 5.5 percent award fee—down from the 7 percent Honeywell Federal Manufacturing & Technologies has been able to earn over the last 14 years. There is no base or fixed fee for operating the plan, though there is a separate fixed fee of 5.5 percent for Work for Others work that is conducted.
The contract to run the NNSA’s main non-nuclear production plant is envisioned as a five-year base contract with up to five years’ worth of options. The budget for the plant is approximately $900 million per year, or $9 billion over the 10-year length of the contract. Over the last year, NNSA officials have talked about moving toward a public interest model of management and operating contracts, with significantly lowered fees, so the decreased fee did not catch anyone by surprise. “We assumed because of all the talk about a public interest model there was going to be some reduction. We didn’t know where that number would fall, but everyone across the market assumed there would be pressure on fee,” an industry official said. “This is the first chance to see what NNSA is thinking.”
Another industry official noted that 5.5 percent is still much higher than the fee percentage at the NNSA’s laboratories. “5.5 percent is still pretty good in our business, relatively speaking,” another official said. “Relative to the labs it’s great. If you thought NNSA was going to really close down the fee numbers, it’s pretty good.”
Strong Emphasis on Past Performance Remains
The biggest issue for bidders may be how the NNSA judges proposals. It kept language in the RFP that strongly emphasizes past performance over plant organization/key personnel, and small business participation, with past performance weighed more heavily than the other two areas combined. “More relevant past performance will be viewed as a greater indicator of an Offeror’s ability to successfully perform than less relevant past performance,” the NNSA said. “The evaluation will also consider the currency of past performance information, source of the information, context of the data, and general trends in the contractor’s performance.”
The emphasis on past performance could make Honeywell tough to beat, one industry official said. “I can go along with the Department moving to say that one of the biggest indicators of future success is past performance. That’s reasonable,” the official said. “But it’s bad timing for a lot of companies.”
In contrast to its Y-12/Pantex procurement, costs will not be rated but evaluated for realism and used to determine the best value to the government, the NNSA said. “In determining the best value to the Government, the Technical and Management Criteria are significantly more important than the Cost Criterion,” the agency said. “The Government is more concerned with obtaining a superior Technical and Management proposal than making an award at the lowest evaluated cost. However, the Government will not make an award at a price premium it considers disproportionate to the benefits associated with the evaluated superiority of one Technical and Management proposal over another. Thus, to the extent that Offerors’ Technical and Management proposals are evaluated as close or similar in merit, the evaluated cost is more likely to be a determining factor.”
