Nuclear Security & Deterrence Monitor Vol. 26 No. 08
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Nuclear Security & Deterrence Monitor
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February 24, 2022

NNSA Review of Pantex/Y-12 Contract Award Suspect, Losing Bidder Claims

By Dan Leone

Citing a lack of transparency on the agency’s part, a losing bidder for a major nuclear-weapon sites management contract cried foul in January when the National Nuclear Security Administration short-circuited an external review of the controversial award, according to the Government Accountability Office.

According to a January decision memorandum from the office, part of the legislative branch of the federal government, the Bechtel National-led Integrated Mission Delivery believes the National Nuclear Security Administration (NNSA) did “not provide adequate details regarding the investigations the agency will undertake concerning organizational conflicts of interest and appearances of impropriety” allegedly associated with the November award of the combined management and operations contract for the Pantex Plant in Texas and the Y-12 National Security Complex in Tennessee.

The Fluor-led Nuclear Production One, which also includes Amentum, won the potentially 10-year, $28-billion contract after a protracted competition that lasted more than a year. Before Christmas, Integrated Mission Delivery and Strategic Nuclear Operators, a separate losing bidder led by BWX Technologies-led, protested the award.

Rather than wait for the Government Accountability Office’s judgment, the NNSA rescinded the award to Nuclear Production One and asked the office to dismiss the protests while the agency conducted its own investigation into the losing bidders’ allegations. NNSA said it would take corrective action on the award, if necessary — that could include throwing the award out and choosing from the remaining two bidders or putting the contract back on the street.

Integrated Mission Delivery said the NNSA’s promises were vague and that the agency “fails to commit to specific courses of action regarding the investigations” it will take, according to the Jan. 14 decision memorandum from the Government Accountability Office. The team hoped that this would be enough for the office to deny NNSA’s request to dismiss the protests, but the office did not think it was.

After all, the office wrote in the memo, “a new evaluation and award decision could result in award to either protester” and neither protester could reasonably object to the NNSA’s investigation before the agency explains the methodology of that investigation.

If the NNSA sustains its award to Nuclear Production One, the losing bidders could protest the award with the Government Accountability Office again.

Meanwhile, with NNSA’s internal investigation hardly out of the gate, Fluor CEO David Constable told investors this week that he was confident the NNSA’s award would stand.

“We believe Pantex/Y-12 is going forward, let’s be realistic there,” Constable said.

BWX Technologies CEO Rex Geveden told his own investors, in that company’s annual earnings call, that BW had submitted a compelling offer that wasn’t dead yet.

Ultimately, we remain optimistic about the BWXT team’s competitive proposal and will await a determination from the Department of Energy,” Geveden said.

But in the meantime, the NNSA was preparing to extend the incumbent at Pantex and Y-12, the Bechtel-led Consolidated Nuclear Security, for at least six months and possibly as long as one year.

Pantex is where the NNSA assembles, disassembles and services nuclear weapons. Y-12 is the agency’s defense uranium hub, where the NNSA manufactures nuclear-weapon secondary stages.

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