The National Nuclear Security Administration is already reaping the benefits of consolidating the management and operating contracts at the Y-12 and Pantex nuclear weapons plants, having already saved $80 million, NNSA Principal Deputy Administrator Madelyn Creedon said in a response to a Government Accountability Office report that raised questions about the cost of competing the two contracts. Creedon said in a letter that accompanied the report that the savings have come from “award fee savings, approved benefits savings, and staff reengineering savings without having to conduct involuntary separations.”
In a cost-benefit analysis sent to Congress last year, the NNSA said it spent $3.3 million to compete the Y-12/Pantex contracts, for which new contractor Consolidated Nuclear Security has proposed $3.27 billion in cost savings. It said the cost effectiveness of the competition offset any employee morale issues that arose during the lengthy procurement, which included a pair of protests from incumbent Babcock & Wilcox. The GAO, however, criticized the NNSA for not including all competition costs, including more than $20 million in work by the new contractor during the four-month transition, and for not “clearly and completely” describing its analysis of the cost savings proposed by CNS. “As a result, NNSA’s report does not convey that significant uncertainties exist with the contractor’s ability to fully meet its estimated cost savings,” the GAO said.