FINAL Y-12/PX RFP RELEASED, CAP ON FEE FROM COST SAVINGS REMOVED

The National Nuclear Security Administration is removing the cap on fee that could be earned through cost savings from its merged Y-12/Pantex management and operating contract, potentially making the opportunity more lucrative and more enticing to industry. The agency detailed the change yesterday as it published the long-awaited final Request for Proposals for the contract, and the relaxed cap on cost savings came as a surprise to many in industry. In a preview of the final RFP released a month ago, the NNSA said that it was raising the available fee to 7 percent, but it gave no indication that it would remove the cap on cost savings. Previously, bidders could have earned 20 percent of the cost savings generated by the merger as long as that portion of the fee did not exceed the amount of fee earned for mission work. As expected, the NNSA raised that figure to 3.5 percent of the Fiscal Year 2011 Pantex and Y-12 budgets, up from 3.2 percent in the draft RFP. NNSA spokesman Josh McConaha said the change was made to “foster efficiencies through the merger of sites’ functions (to include overhead), continuous process improvements, and capital investments. The share period and percent of savings as contained in the Request for Proposals is designed to foster those efficiencies.” 

Several other changes to the draft RFP that were previewed last month remained in the final version. Those changes include the addition of a provision that would allow companies to bid foreign nationals that are able to receive clearances on the contract, increase small business participation, language broadening the window for project management past performance that will be evaluated in the contract, the creation of a separate fee for small business teaming partners involved in the contract, and the removal of a requirement that would have forced key personnel to repay salary, bonuses and relocation costs if a two-year commitment to the contract was not met. Proposals for the contract are due at 2 p.m. Mountain Standard Time March 13, giving industry three months to prepare bids for the contract. “We’re continuously improving the way we do business, and this RFP is a big part of it,” NNSA Administrator Tom D’Agostino said in a statement. “We’re looking at everything with an eye toward streamlining our operations so we can direct more resources to critical mission work. Our new approach ensures that we are effective stewards of limited tax dollars while operating as a single, integrated enterprise. This RFP is a piece of a larger commitment to getting better, operating more efficiently, and working as one NNSA.”