Only Three Bids Submitted for New ETEC Contract
Mike Nartker
WC Monitor
3/14/2014
Despite recent procurements that attracted limited interest, the top acquisition official in the Department of Energy’s Office of Environmental Management said last week that he does not believe DOE’s efforts to better balance risk and reward with its contractors are so far leading to reduced competition for new contracts. Only three of the 12 small business firms eligible to bid on the new contract to provide environmental monitoring and D&D services at the Energy Technology Engineering Center (ETEC) site chose to submit proposals last month, according to industry officials. The ETEC procurement was proceeded by DOE’s now-infamous procurement for the new deactivation services contract for the Paducah Gaseous Diffusion Plant, which only resulted in two bids. “With only two, I can’t connect the dots. … We want to have a competitive situation when we procure something, and so far we have,” EM Deputy Assistant Secretary for Acquisition and Project Management Jack Surash told WC Monitor on the sidelines of the 2014 Waste Management conference, held in Phoenix, Ariz.
Surash also said, “We have multiple contractors involved that are interested, and for various reasons at the end of the day, they just did not want to submit their proposal. It’s not like they were turned off right at the very beginning. Something along the way in what was going on with their corporation was probably why they ended up not wanting to submit a proposal. Maybe at the end of the day they made a decision that there were other opportunities that they wanted to go after. That they were overtaxed or didn’t have the capacity. Things like that.”
Official Defends Fixed-Price Approach
The new ETEC contract is being competed under the Department’s set of small business national Indefinite Delivery/Indefinite Quantity cleanup contracts, and those firms believed to have submitted bids include Dynamic Management Solutions, LLC; North Wind; and Perma-Fix Environmental Services. A key factor in the small number of competitors appears to have been DOE’s decision to use a firm fixed-price approach for the new contract, which includes options for facility D&D activities to be performed once a planned environmental impact statement is completed. “It looks like a really interesting job. But it’s just a really bad job to do fixed price. There’s a lot of uncertainty,” one industry official told WC Monitor last fall.
In his remarks at last week’s meeting, though, Surash defended the use of a fixed-price approach for the new ETEC contract. “That’s exactly why we structured the contract the way we did. If we cannot get regulatory closure on the D&D, we will not execute the options to do the D&D. But the base level of work is going to happen. It needs to happen no matter what. That’s how we dealt with that curve that was thrown at us—the base level of work, we’re going to do it so we went out of our way to define the requirement and we think we did a good enough of job,” he said. “We’ll let the regulatory process continue and if it goes the way we think it will go, we’ll now have competitively arrived at D&D options to execute. And if we don’t, we don’t execute. So I think we actually have the best of both worlds on that one. I’m very happy looking back at what we were able to do with that one.”
DOE Expects Award Later This Summer
The new ETEC contract is estimated to be worth $25-40 million, and is set to run for up to five years. According to Surash, DOE plans to award the new contract in the July-September time frame. Environmental monitoring work at ETEC is currently performed by Boeing, which owns the broader Santa Susana Field Laboratory where the site is located, under a contract set to expire by Sept. 30, 2014.
