Federal officials rescind $5 billion contract for Nevada National Security Site

By Daniel Rothberg

Wednesday, Aug. 31, 2016 | 5 p.m.

After announcing a Lockheed Martin subsidiary as the recipient of a contract to manage the Nevada National Security Site, federal officials backtracked Wednesday and revoked the award.

The move follows news that another contractor had acquired the Lockheed Martin subsidiary without informing the proper officials, a decision that affected an analysis in the competitive bid process.

Bidding on a 10-year management contract to operate the Nevada National Security Site drew interest from major firms including Bechtel and the current operator, a subsidiary of Northrop Grumman. The contract to manage the 1,360-square mile facility, once the site of nuclear tests, is worth up to $5 billion. It is about 65 miles northwest of Las Vegas.

Last Friday, the Department of Energy’s National Nuclear Security Administration announced the award would go to Nevada Site Science Support and Technologies Corp., known as NVS3T. At the time, the agency said it was under the false impression that the NVS3T was a subsidiary of Lockheed Martin.

After the award was issued, the nuclear security agency learned that Leidos Innovations Corp., another defense contractor, had acquired NVS3T from Lockheed Martin. Earlier this week, officials began re-evaluating the award, which considered past performance as one of the factors for granting the contract.

“This change in ownership raises substantial questions about the information in the NVS3T proposal, which could significantly impact the evaluation of the proposal and award decision,” the nuclear security agency said in a statement. “Accordingly, NNSA has decided to rescind the award to NVS3T.”

The agency will review the other proposals it had received.