Todd Jacobson
NS&D Monitor
11/7/2014
The National Nuclear Security Administration will compete the Kansas City National Security Campus management-and-operating contract for the first time in 14 years, hoping that competition for the contract will bring about an increase in performance at what is already one of the weapons complex’s highest achieving sites. The agency late this week released draft procurement documents outlining its intention to compete the contract, seeking input from industry before a final Request for Proposals is released. Industry has until Nov. 21 to comment on the draft Statement of Work and evaluation criteria released this week, and NNSA spokeswoman Shelley Laver said a final Request for Proposals is expected to be released in early December.
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. “It is Office of Management and Budget (OMB) and Departmental policy to provide for full and open competition in the award of M&O contracts,” the NNSA said in a message to Congress announcing the competition that was obtained by NS&D Monitor. “Use of full and open competition was elected for the follow-on contract because it will provide plant stability over a long-term contract period, will not increase risk to mission accomplishment, will provide the best opportunity to generate improvement in performance cost/fee, and will satisfy regulatory and policy preference for competition.”
Laver said the agency envisions awarding the contract before the current contract held by Honeywell Federal Manufacturing & Technologies expires at the end of September next year. The timeline includes a four-month transition, giving the agency little time to waste if it hopes to award the contract on time.
Honeywell ‘Confident’ in Track Record
Incumbent contractor Honeywell Federal Manufacturing and Technologies has for years been among the NNSA’s most reliable contractors, and it facilitated a move into the new facility earlier this year that was completed a month early and approximately $16 million under budget while continuing to meet 99.9 percent of scheduled deliverables. “Honeywell is confident in our ability to deliver excellent performance and in meeting customer commitments,” Honeywell spokeswoman Shaunda Parks said in a statement. “We have a long-standing track record of delivering exceptional solutions to the NNSA in support of a more responsive and cost-effective nuclear security enterprise. We just completed one of the largest U.S. industrial moves one month ahead of schedule and more than $16 million under the anticipated Total Project Cost, and we look forward to continuing to support our customer in the future with innovative solutions.”
Past Performance Most Important Evaluation Criteria
The NNSA said that it will judge proposals based on past performance, 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.”
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.”
Will There be Competition This Time Around?
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.
One industry official applauded the agency for allowing industry to comment on the draft Statement of Work and evaluation criteria, calling it a “step in the right direction,” but the official said not releasing a full RFP and using a standard approach to the solicitation could tamp down competition for the contract. “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.”
