March 17, 2014

NNSA PLANS TO INCREASE FEE IN FINAL Y-12/PX RFP

By ExchangeMonitor

Responding to industry feedback, the National Nuclear Security Administration is planning to increase the available fee for its proposed Y-12/Pantex contract merger and strip out protective force work from the consolidated contract, according to a preview of changes released by the agency yesterday. Indicating that a final Request for Proposals would formally be released later this month, the NNSA detailed planned changes to the contract in a four-page document posted to the procurement website, saying that the final document is “currently in the NNSA formal review process.” The language is “subject to change but provides information to stakeholders to communicate some of the expected changes,” the agency said. NNSA is not taking comments on the planned changes.

The most notable difference between the draft and the proposed final RFP involves an increase to the available fee that some industry officials believe could enhance competition for the contract. The agency said it would raise the maximum available fee to 7 percent of the Fiscal Year 2011 budgets at Pantex and Y-12, up from 6.4 percent, while largely maintaining a 50-50 split between incentive fee and fee earned from the cost savings generated by the merger. The agency said, though, that it would allow bidders to propose up to 5 percent in incentive fee in the first year of the contract (while capping the cost savings fee at 2 percent) in recognition of the potential challenges involved in the merger. “This changes the competitive landscape for everyone,” one industry official told NW&M Monitor. The agency also increased the maximum Work for Others fee to 3 percent from 2.5 percent. Other notable planned changes include:

An increase in the window of past performance information that will be evaluated for the Uranium Processing Facility portion of the contract from five years to eight years;
The removal of a restriction on fee to small businesses or protégé team members;
The removal of language that would have required key personnel to repay salary, bonuses and relocation costs if a two-year commitment to the contract was not met, though a requirement for the two-year commitment and reimbursement by the contractor remains in place; and
Clarification of the evaluation criteria for the management and operating contract as well as the separate UPF contract line item.

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