NNSA Rescinds $5b Nuclear Contract for Leidos Subsidiary

WASHINGTON -- The National Nuclear Security Administration (NNSA) this week rescinded a $5 billion, ten-year agreement with a subsidiary of Lockheed Martin, due to concerns over the sale of the subsidiary to Leidos.

On Aug. 26, the government awarded the Lockheed-owned Nevada Site Science Support and Technologies Corporation (NVS3T) the contract to manage and operate Nevada National Security Site (NNSS) near Las Vegas, NV. At the time, an NNSA statement cited that NVS3T offered "best value to the government."

But on Aug. 31, NNSA announced it was pulling back that contract award and re-opening the bidding process. The reason: NVS3T had not alerted the NNSA contracting office that it was being sold by Lockheed to Leidos.

"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," NNSA wrote in a statement. "Accordingly, NNSA has decided to rescind the award to NVS3T. This allows the current procurement action to continue. In the interest of fairness, NNSA will reconsider all offers previously received in response to the request for proposals."

The 1,360-square mile NNSS facility will continue to be operated by its current management firm, National Security Technologies, until a new contract is awarded. Is a key experiment center for the Stockpile Stewardship Program (SSP), and also provides radiological emergency response capabilities and training.

An NNSA spokesman declined to comment further, as the contract is now an active government procurement process.

Leidos spokeswoman Melissa Koskovich wrote in a statement that the company is "disappointed" by the NNSA decision, but declined to say if the company plans to re-compete for the contract.

"Leidos stands behind NSV3T’s proposal, as do all of the assets and experience referenced in the proposal," Koskovich wrote. "We look forward to working with NNSA to resolve their questions. Given the ongoing nature of this matter, we cannot comment further at this time."

NNSA is a semi-autonomous agency within the Department of Energy. Among its charges are maintaining and upgrading America’s nuclear warheads.

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