NNSA cancels Y-12, Pantex contract award, to hold new competitions for separate site management contracts

WASHINGTON – The Department of Energy’s National Nuclear Security Administration announced today that it is canceling its November 2020 contract solicitation for management and operation of the Pantex Plant and Y-12 National Security Complex and terminating the contract award announced in November 2021 for the two sites. NNSA intends to hold two new competitions for separate contracts to manage each site.

In December 2021, the Government Accountability Office received protests of NNSA’s contract award. In January 2022, NNSA announced that it was taking voluntary corrective action to assess alleged organizational conflicts of interest and alleged proprieties. Based on NNSA’s review of the procurement record and our assessment of increased requirements at the sites, cancellation of the solicitation and termination of the resulting award is appropriate to safeguard the integrity of the procurement process and to best address NNSA’s mission requirements.

During NNSA’s voluntary corrective action, a team of NNSA experts reviewed the current Pantex/Y-12 contract structure, which manages the two facilities under a single contract. Given the accelerating workload at both facilities, the challenging geopolitical environment and the urgent need for NNSA to deliver on critical national security missions, NNSA determined that it requires separate contracts to manage Y-12 and Pantex.

“Fair and open competition is critical to NNSA, not just because of our responsibility for ethical conduct, but because it’s critical to delivering what the nation needs as quickly and efficiently as possible,” said Under Secretary of Energy for Nuclear Security and NNSA Administrator Jill Hruby. “Ensuring that level of competition for NNSA contracts is essential to meeting the significant mission requirements in front of us with the urgency required.

“Just as important, this represents an opportunity to assess our plans for management and operation of these critical facilities. We face rapidly accelerating mission requirements and a changing global strategic environment in which China’s nuclear expansion and Russia’s irresponsible behavior makes it more important than ever for NNSA to deliver. The steps we are taking today are tailored to ensure that each facility gets the management time and attention required to deliver on each site’s critically important but significantly different work.”

On Nov. 29, 2021, NNSA awarded a management and operations contract for Pantex and Y-12 to NPOne, a limited liability corporation led by Fluor Federal Services Inc. and AECOM Federal Construction. That contract was for up to 10 years and a value of up to $28 billion.

Under the actions announced today, NNSA will:

• Terminate the Nov. 29, 2021, contract award to NPOne.
• Cancel the Nov. 9, 2020, contract solicitation under which that contract was awarded.
• Begin the process necessary to hold separate competitions for two management and operations contracts, one at each facility. That process includes steps to extend the contract of the incumbent contractor, Consolidated Nuclear Security, to allow time for new competitions.

Both facilities are essential to maintaining the nation’s nuclear stockpile. Missions at Pantex include assembly and disassembly of nuclear warheads, testing and evaluation of special weapons materials, and manufacturing and assessment of high explosive used in weapons. Y-12 is responsible for production, surveillance, dismantlement, and storage of nuclear components; reducing global nuclear threats by detecting, removing and securing nuclear material; and providing fuel feedstock for Naval Reactors.