Bechtel Wins $7 Billion Nuclear Propulsion Deal

Bechtel Wins $7 Billion Nuclear Propulsion Deal

Bechtel Corp., the largest construction and engineering company in the U.S., won the Defense Department’s biggest contract in November.

The San Francisco-based company received a $7 billion, multi-year deal with the Navy to design nuclear propulsion systems for submarines and surface ships. Most of the work will take place in upstate New York.

Bechtel Marine Propulsion Corp. won the contract from the Naval Sea Systems Command to manage the government-owned Knolls Atomic Power Laboratory near Schenectady, N.Y., as well as the Bettis Atomic Power Laboratory outside Pittsburgh, Pa., according to the Pentagon’s Nov. 5 announcement. It didn’t specify whether other companies also bid for the work.

The contract topped a list of 200 awards announced in November, with a combined potential value of more than $30 billion, according to a Military​.com analysis of the Pentagon’s daily contract announcements.

The total monthly value was almost double that of October, the first month of the government’s fiscal year, but 4 percent lower than the average for the previous three months. The figures don’t reflect what is actually spent, or obligated, because many deals are only partially funded at first.

For example, the Navy obligated $82.9 million for the Bechtel contract at the time of the award, and plans to spend $485 million by the end of fiscal 2014, or Sept. 30, according to the announcement.

The labs, which are technically owned by the Energy Department, are part of a program between the department and the Navy to develop and maintain nuclear-powered warships.

The Knolls facility, known as KAPL, operates two sites. The main location in Niskayuna, N.Y., a suburb of Schenectady, designs nuclear reactor plants for the Navy’s submarines, including the Los Angeles-class, Ohio-class and Virginia-class. Another location about 20 miles to the north in West Milton runs two land-based reactors to train sailors who will eventually operate similar plants at sea.

The Bettis facility uses three primary sites to develop and maintain nuclear propulsion systems for the Navy’s surface ships and subs, including the main site in West Mifflin, Pa., a suburb of Pittsburgh; a Navy nuclear training facility in Charleston, S.C.; and the Naval Reactors Facility in Idaho Falls, Idaho.

Two of the Pentagon’s top five contracts in November were so-called multiple-award contracts. Under these kinds of arrangements, companies win seats on the contract, then compete against each other for individual orders.

A group of nine companies, including Dell Inc. and Harris Corp., landed seats on the second-largest contract, a deal valued at $6.9 billion to provide the Air Force with information technology products and services as part of the so-called Network Centric Solutions-2, or NETCENTS-2, program, according to the Nov. 5 announcement.

More than 900 companies shared the third-largest contract, a Navy agreement potentially worth $5.3 billion primarily for engineering services as part of the so-called SeaPort Enhanced, or SeaPort-e, program, according to the Nov. 19 announcement. In fact, only 41 of the 955 bidders didn’t get a piece of the deal.

Cardinal Health Inc., the Dublin, Ohio-based distributor of pharmaceuticals and medical products, won the fourth-largest contract, a $1 billion contract with the Defense Logistics Agency for surgical supplies, according to the Nov. 13 announcement.

The Institute for Defense Analyses, a nonprofit based in Alexandria, Va., secured the fifth-largest contract, an $888 million, five-year agreement with the Washington Headquarters Services to conduct research for major offices within the Pentagon, including the Office of the Secretary of the Defense and Joint Staff, combatant commands, defense agencies, joint program offices, among others, according to the Nov. 1 announcement.

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Thank God they didn’t contract this out to a “for profit” defense contractor like Lockheed or Boeing. We’d really be screwed.

Indeed. Lockheed is involved in both the F-35 and LCS programs: both programs share massive cost overruns, inadequate performance of the weapons system in question (despite mission profiles for both being reduced), and provide tin-plated performance at gold-plated prices.

The only victory in either case is for the boardroom at Lockheed. The losers are the US taxpayers, and the unfortunate warfighters that have to man them.

Umm, Brendan McGarry, in the seventh paragraph, I think you meant to write $485 million, not $485 billion.

DoDbuzz, I have a fun article for you.

“The Institute for Defense Analyses, a nonprofit based in Alexandria, Va., secured the fifth-largest contract, an $888 million, five-year agreement with the Washington Headquarters Services to conduct research for major offices within the Pentagon, including the Office of the Secretary of the Defense and Joint Staff, combatant commands, defense agencies, joint program offices, among others, according to the Nov. 1 announcement.”


Got it. Thx.

Agree for Dfens happy to see the screw ups at Lockheed Martin out of this deal. LCS and JSF is bad enough hate to see our Subs w/o power due to another L.M. screw up, LOL.

This could well be one of the best moves by the DOD in years. Bechtel is by far one of the best engineering companies in the world and has been in the Nuclear business since the early days of it being used to generate power. This will be interesting to watch and could lead to small reactors being used on land based power plants.

blight, interesting that you bring this topic up.

IDA has a large facility close to the Pentagon and employs a large number of highly educated folks (think big salaries). I could imagine them spending over $800M on payroll over a five year period. I would use the word ‘analysis’ to describe their work rather than ‘research’, but the word research probably sells better.

The Pentagon claims a lot of credit for reducing ‘evil’ civilian workers, but when they turn around and award giant contracts for work that would have been done in house back in the day, where’s the real savings? Nothing against IDA, but the Pentagon may be playing shell games when they claim they’re reducing their staff.

You do realize that the other LCS design built by General Dynamics and Austal is having just as many problems? In addition to downright incompetence on their end the LCS as a whole is a classic example of the Navy not knowing WTF it wants.

Wouldn’t it be great if that were true? We are finally seeing some environmentalists on the Democrat side of the aisle who are asking the tough questions of some of these no-payback-in-sight pipe dreams like wind, solar, and tide power generation. Instead they are actually cluing in to the fact that it was money from big oil that had scared them all away from nuclear power the first time around. There is no better source of clean power for this planet today or tomorrow than nuclear fission. It’s time we got serious about scrapping coal and oil plants, stopped putting dams on every river and went to nuclear power across this nation.

I do realize that (but thanks for the heads up!). With Austal, and considering how long they’ve been in the business, I’m appalled that they feigned “surprised” w/r/t the seriousness of the corrosion problems they ran into with the tri-hull design (it isn’t like the aluminum/steel corrosion problem is new).

Regardless, neither LCS variant has been shock tested (no surprise — the navy most certainly knows neither variant would likely survive that test — b/c then congress *might* ask some questions), neither is armed or protected sufficiently to have the term “Combat” used to describe its purpose, and at $400M per sea frame — its a crummy deal for the taxpayer (and warfighter) no matter how you cut it.

I only mentioned Lockheed, because they were involved with both example programs.

“to design nuclear propulsion systems for submarines and surface ships”

Surface ships-did I read that correctly? Is the Navy starting to think nuclear powered surface ships again?
That would be frickken outstanding. Our carriers needs escorts that have the same endurance and speed and don”t have to be refueled every week.

New and improved Virginia class cruiser anyone? No need to stealth here, just lots of speed, extremely powerful radar and EM suite, and lots and lots of missiles, lasers and other weapons.

Might just be carriers. After all, betchel won the contract for the Ford-class carrier’s nuclear reactor.

It’s also a good place to hide generals after they retire and need to collect money while they wait for a board of directors position to open up.

Big-Dean…I agree w/ya the VA class cruisers were beautiful & capable ships, but I think it might be a mis-print. Sounds like Bectel will continue workin the A1B, start work on designing & building the S1B 4 the SSBNX & operate KAPL & Bettis facilities.…a “steal” at 7 Billion USD 4 now at least! Can’t wait for the change notices to begin!!!!

“Our carriers needs escorts that have the same endurance and speed and don”t have to be refueled every week.”

Unfortunately, experience has shown that Congress are simply unable to perceive the long run total-cost-of-ownership savings of buying nuclear powered surface combatants (other than CVN).

All they see is the higher front end price tag to acquire the nuclear powered ship, and the higher manning cost of sending sailors to nuke school.

What they fail to see are the huge savings of reduced oiler operations. With lowered manning costs as a result of the sailors you don’t have to train and pay when there are fewer oilers to be crewed.

Really, you would think that a country that was allegedly performing a “Pacific pivot” would want to have a second look at vessels that can deploy all the way across the Pacific at flank speed from their homeport, not slowing down even once. While being able to commence operations instantly upon arrival without taking time for refueling. Absolutely huge operational advantage on top of the total-cost economic advantage.

DOD just needs to Slow down work objectives Yes I agree the New Nuclear Aircraft carriers need escorts Ships But do NOT forget the Middle name” Aircraft” they always need JP5,JP10 or whatever they use now. and so do the escorts Ships This is from former sailor, who knows when real sailors were aboard the Supply ships I did not become BM 2 for nothing I’ve learned much experience on board U.S.S. Kalamazoo AOR6. Now they called AO or OE.

Actually both variants are required to be shock tested. But the Austal built JHSV is not.

The navy is actually in the process of procuring a new class of tankers–

Not really carriers are just show ponies. None of our wars since WW2 would have been any different had the carriers all been scrapped.

They are a large prestige item, a demonstration of industrial might. That is why the Chinese want one or two and we continue to build them to try to recapture our past.
Already in the early 80s it was realized that even if 2 or 3 carrier groups huddled together they weren’t going to survive. Since they cant be used in major naval combat why bother with the escorts.

Like everything the carrier had it’s day — the era of propeller aircraft with short range and poor performance. The jet age ended the usefulness of carrier aviation and ushering in the dominance of land based aviation.

I believe the JHSV doesn’t have be to shock tested because its a civilian craft that is being leased as something of a POC. Nor, is/was it ever expected to go into harm’s way.

But both LCS are required to undergo shock testing (the “C” still stand for “Combat”, doesn’t it?) — yet none has happened and none are scheduled (last time I heard).

It has always amazed me at how cheaply people can be bought in these procurement scams.

Conrad: so GE, Westinghouse & the former United Nuclear Corp. were all slouches??? The 1st organization to use a fission reactor connected to an electric power grid was the U.S. Army! (SM-1 & SM-1A) The SM-1 and Fort Belvoir hold the distinction of delivering the first electricity for public use in America, coming online several months before the (much larger, $55 million) Shippingport Reactor (in December 1957.) The SM-1A’s were an excellent design, & could serve as a design platform for those “Small Reactors” you speak of!.…

The average profit in the major construction industry is 14%. Which means Bechtel stands to make almost $1 billion on a $7 billion deal. Since they’re the 5th largest privately owned company in the U.S., we’ll never know whether we taxpayers got sucker punched or not.

Would love to see a dollar for dollar break down of this contract. Unfortunately that will never happen.

“The labs, which are technically owned by the Energy Department, are part of a program between the department and the Navy to develop and maintain nuclear-powered warships.”

IDA is the Secretary of Defense’s “in-house” think tank. According to the latest publicly avaialble IRS Form 990 for nonprofits, IDA received $225 million in 2010, of which 98% came from “public” sources (meaning DoD). A 5-year contract for $888 million averages to $177 million a year. Business has been so good over year’s that since they charge the government for rents and leases, they’ve used that money to buy their own land and building, currently worth over $100 million. The director’s salary is about $400,000 and 10 of their executives make over $240,000, with 3 in the $350,000 range. Larry Welch (retired USAF Chief of Staff) gets paid $150,000 for just advising.

The Air Force uses RAND Corporation and Navy uses the Center for Naval Analyses (CNA), which thought it had such a good deal, it changed to a for-profit years ago.

I think this is why I’d like to see us building enough Virginias (and follow-ons) to turn the Pacific (largely) into an American lake. And I’d also like to see the new SSBN’s be designed in a way to have some of them allocated to take over the for the 4 Ohio-based SSGN’s (or alternatively — stretch the Virginias to perform the same task).

in oblatt’s universe only oblatt is right.…..

Not sure Korea could’ve been kicked off without initial carrier support. They lost everything except Pusan, and nothing was in range for Inchon.

In Vietnam, I guess operations north of the DMZ might’ve been complicated without carriers: however, we would’ve been forced to re-think just what the hell we were doing up north of the DMZ, instead of bleeding naval aviators over Hanoi.

Gulf War was mostly a Kingdom of Saudi Arabia show. Kosovo could’ve been kicked off from NATO bases…

But if things go south in the Pacific today, our land bases will probably be the first things to get cratered.

Those big floating targets will be the next thing to go. They are big monuments to big egos, and big sources of profit for big defense contractors.

Any chance of a study on the use of Thorium

I agree with you wholeheartedly but I do think we need to have a moment of silence for all of those retired Flags who are suffering through their harsh reality of retiring at (in some cases) 100% of their base military pay (remember back a few years when they got the law changed to allow O-6’s and above could stay for 40 yrs to collect 100%) Hey wait, didn’t Congress vote themselves pay raises after everyone else was sleeping? So let’s see Flag Officers = Congressmen — wow what a coincidense.

I take thorazine all the time. Oh, you said Thorium…

God help us all if they do for the DOD what they did to Boston, the Massachusetts Taxpayers and the nation at large. They paid a $400 million fine NOT to be criminally indicted. Had they been convicted, debarment was next. Thugs of the first order.

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