Y-12 / Pantex Management and Operating Contract Competition (2020 DOE transition)
| Book 2 - Issue Papers
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| Entire 2020 DOE Transition book As of October 2020 |
NNSA will award a successor Management and Operating contract for the Y-12 and Pantex sites by October 1, 2021.
Summary
NNSA is soliciting a contractor to manage and operate the Y-12 National Security Complex (Y12) in Tennessee and the Pantex Plant (Pantex) in Texas. The current Management and Operating (M&O) contractor—Consolidated Nuclear Security (CNS), LLC—is responsible for the NNSA Stockpile Stewardship and Management Program and Nuclear Nonproliferation Program activities conducted at Y-12 and Pantex. CNS is a limited liability company formed by Bechtel National, Inc.; Leidos; ATK Launch Systems; and SOC LLC. The current contract is comprised of two contract line items, management, and operations of the two sites for a period of up to 10 years and construction of the Uranium Processing Facility through project completion. A major requirement of the current contract was to combine the operation of the Y-12 and Pantex sites under one contract to streamline production operations and generate cost savings resulting from this combination. NNSA has validated cumulative cost savings of nearly $760 million for Fiscal Years (FY) 2014–2019 under this contract.
Issue(s)
The Y-12/Pantex contract had a base performance period of 5 years with options to extend up to a period of 10 years by meeting specific performance and cost savings targets. The Fee Determining Official determined that CNS met the standard of performance for the first Gateway Decision, and NNSA exercised Option Term 1 extending the contract for years six and seven, from October 1, 2019, through September 20, 2021. In June 2020,
NNSA’s Fee Determining Official concluded that CNS did not meet the performance standard for the second option, and the contract will expire on September 30, 2021. The June 2020 decision not to exercise Option Term 2 sets an aggressive timeline to award a new Y-12/Pantex contract to be in place by October 1, 2021.
The new contract will include modified cost savings provisions to incorporate lessons learned and build on the success of the current contract. NNSA issued a draft Request for Proposal (RFP) on August 24, 2020, and conducted site tours and one-on-one meetings with industry in September 2020. We anticipate issuing the final RFP in the first quarter of FY 2021, and awarding the contract in the third quarter of FY 2021 to support a transition to the new contractor by September 2021. There has been significant industry interest in this acquisition. The Major Systems Acquisition project for construction of the Uranium Processing Facility (UPF) at Y-12 will continue to be performed by CNS as a separate contract line item until project completion.
Background
Y-12 and Pantex represent key nuclear production capabilities in the Nuclear Security Enterprise. Pantex, near Amarillo, Texas, is responsible for maintaining the safety, security, and effectiveness of the nation’s nuclear weapons stockpile. Work performed at Pantex includes support of the nuclear weapons life extension programs; nuclear weapons assembly and dismantlement; the development, testing, and fabrication of high explosive components; and interim storage and surveillance of plutonium pits. Y-12, in Oak Ridge, Tennessee, is the nation’s only source of enriched uranium nuclear weapons components and provides enriched uranium for the U.S. Navy. It performs materials science and precision manufacturing; stores enriched uranium; and supports efforts to reduce nuclear proliferation risk.