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GAO-18-490R 1 (2018-08-14)

handle is hein.gao/gaobacppe0001 and id is 1 raw text is: GAOU.S. GOVERNMENT ACCOUNTABILITY OFFICE 441 G St. N.W. Washington, DC 20548 August 14, 2018 Congressional Committees National Nuclear Security Administration Contracting: Review of the NNSA Report on the Sandia Contract Competition The National Nuclear Security Administration (NNSA) is responsible for the management and security of the nation's nuclear weapons programs, among other missions.1 To carry out this mission, NNSA relies heavily on contractors and management and operating (M&O) contracts for its national laboratories and nuclear production facilities.2 One of the national laboratories managed under an M&O contract is Sandia National Laboratories (Sandia). Sandia is a Federally Funded Research and Development Center (FFRDC)3 that has facilities in Albuquerque, New Mexico; Livermore, California; Amarillo, Texas; and Kauai, Hawaii; and near Tonopah, Nevada. Sandia began operations in 1945 as a branch of Los Alamos National Laboratory; the Atomic Energy Commission issued the first contract to manage Sandia in 1949. In 1993, the contract was competitively awarded to Sandia Corporation, a wholly-owned subsidiary of Martin Marietta (and in 1995, Martin Marietta merged with Lockheed Corporation to form Lockheed Martin). The contract with Sandia Corporation was non-competitively extended multiple times and expired in April 2017. NNSA initially decided to compete the Sandia contract in 2015. NNSA released the request for proposals for the new Sandia M&O contract in May 2016 and received four offers, including one from the incumbent, Sandia Corporation. NNSA evaluated these offers according to four criteria: (1) past performance, (2) laboratory organization and qualifications of key personnel, (3) small business participation, and (4) proposed cost for best value determination, including reimbursable management team costs and proposed fixed fee and award fee. On the basis of these criteria, NNSA awarded the contract to manage Sandia to National Technology and 1NNSA is a separately organized agency within the U.S. Department of Energy (DOE) that is responsible for the management and security of DOE's nuclear weapons, nuclear nonproliferation, and naval reactor programs. 2M&O contracts are agreements under which the government contracts for the operation, maintenance, or support, on its behalf, of a government-owned or -controlled research, development, special production, or testing establishment wholly or principally devoted to one or more of the major programs of the contracting agency. Federal Acquisition Regulation (FAR), 48 C.F.R. § 17.601. 3FFRDCs are government-funded entities that have long-term relationships with one or more federal agencies to perform research and development and related tasks. FFRDCs are typically entirely federally funded, or nearly so, but they are operated by contractors or other nongovernmental organizations. FFRDCs are operated, for example, by universities, other not-for-profit or nonprofit organizations, or industrial firms, as autonomous organizations or separate operating units of their parent organizations. FAR, 48 C.F.R. §§ 2.101, 35.017. GAO- 18-490R N NSA's Sandia Contract Page 1

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