The National Nuclear Security Administration (NNSA) on Friday said it had awarded the management and operations contract for the Sandia National Laboratories (SNL) to National Technology and Engineering Solutions of Sandia (NTESS), a wholly owned subsidiary of Honeywell International [HON].
Northrop Grumman [NOC] and the Universities Research Association consortium will support NTESS under the contract, which, with all options, is worth $2.6 billion annually over a decade.
The current SNL contract, held by Lockheed Martin [LMT] subsidiary Sandia Corp., will expire on April 30, 2017, which NNSA said would allow for a four-month transition period. Sandia Corp. took a hit when the Department of Justice found that the business had illegally used federal funds to lobby for an extension of its M&O contract. The contractor last year agreed to pay more than $4.7 million to settle the case.
Sandia National Laboratories, with locations in Albuquerque, N.M., Livermore, Calif., Kauai, Hawaii, and Tonopah, Nev., conducts non-nuclear engineering development for nuclear weapons, develops systems to ensure the reliability of the U.S. nuclear arsenal, and supports manufacturing and disassembly of nuclear weapons. It also provides technology development for nonproliferation, treaty verification, and nuclear intelligence. The sites employ a total of about 10,000 employees.
“The Sandia bid generated unprecedented interest from across industry, demonstrating that our improved acquisitions process is attracting high-quality competition and the best talent to serve NNSA’s mission,” NNSA Administrator Frank Klotz said in a statement.
Lockheed Martin submitted a bid for the contract as part of a team with Purdue, New Mexico State, and New Mexico Tech universities. Battelle and Boeing [BA] also bid as a team that included the University of New Mexico, the Texas A&M University System, and the University of Texas System. Other bidders remained silent on their intentions.
Honeywell has earned strong marks in recent years for its work for the Department of Energy. Honeywell Federal Manufacturing & Technologies, the management and operations contractor at the NNSA’s National Security Campus at Kansas City, Mo., has been lauded by DOE for sticking to schedules and budgets – in one instance, for its successful move to a new Kansas City facility in 2014.
In May, the NNSA awarded Honeywell FM&T an overall rating of “Excellent” for its work in fiscal 2015 and 94 percent of its award fee for that year, the highest fee percentage awarded among the NNSA’s site contractors for that 12-month stretch. The contractor received high marks for the production of over 70,000 hardware items in support of NNSA, Air Force, Navy, and United Kingdom nuclear missions, and for its safety performance, which was found to be “better than industry,” among other achievements.
“Honeywell is excited to be part of the [NTESS] team that will be helping Sandia National Laboratories and their great employees continue the world-leading science and technology research work in support of national security,” the company said in a statement.
There was no immediate sign that the losing bidders would protest the contract award.
“Although we’re disappointed that we were not selected for the Sandia Management and Operating contract, we’re proud of our 23 years of service to Sandia and the NNSA, and we thank Sandia’s employees for their dedication and innovation,” Lockheed Martin said in a statement. “Sandia’s mission is critical to national security, and we’ll work with the incoming contractor to ensure a smooth transition. We’re committed to doing our part to ensure Sandia’s important work doesn’t miss a beat.”
A Boeing spokesperson said by email, “We have been informed of the decision, but have yet to be debriefed on the reasoning behind why were not selected. We look forward to the debrief when it takes place.”
Battelle declined to comment.