This article on the Sandia National Laboratory (SNL) is the first in a series on the Department of Energy’s National Nuclear Security Administration (NNSA) long-duration management and operations (M&O) contracts. 

Located in Albuquerque, NM and Livermore, CA, SNL is one of eight NNSA laboratories or facilities and is reported as the DOE’s largest small business subcontractor. The lab was established in 1945 as part of the Manhattan Project and remains a critical nuclear research facility. Its core mission focuses on nuclear weapons stockpiles and research solutions for national and homeland security and space missions. This includes material sciences, energy development, cybersecurity and advanced computing. There, scientists, engineers and employees collaborate with academic institutions, international experts and industry partners to develop cutting-edge solutions in those areas. Current research projects include:

• Rapid testing of portable security systems
• Development of sensors to measure magnetic fields needed for fusion research
• Production of critical war-reserve components for nuclear deterrence systems
• Exploration of critical mineral characterization through collaboration with Carnegie Mellon University under the GEM-AI project
• Collaboration with NASA on the VIPER rover mission
• Integration of AI to develop computing technologies to reduce energy consumption in space missions.

 

Contract History and Performance

DOE awarded the current $55.4B cost-plus-award-fee (CPAF) contract to National Technology & Engineering Solutions of Sandia, LLC (NTESS), a subsidiary of Honeywell International, on December 16, 2016, for a five-year base period and five one-year options, including an additional four-month transition period. Contract spending to date had reached $42.8B.

 

 

 

 

 

 

 

 

 

Although the Energy contract is for NNSA M&O services, other federal agencies purchase goods and services through it. Energy, remains the largest buyer, though defense agencies’ spending accounts for a significant share.  

 

 

 

 

 

 

 

 

 

Weapons Activities, unsurprisingly, received the most funding at $32.4B, including $1B for Nonproliferation, Antiterrorism, Demining and Related Programs. Research and development (R&D) across all defense agencies accounted for $2.4B in contract actions.

 

 

 

 

 

 

 

 

 

Subcontracting Spending

Tracking related subcontracting spending is more complex. Because the contract held by NTESS includes work on sensitive and nuclear defense programs, FAR 52.204-10 and Subpart 17.6 allow the contractor to exclude related subcontract spending; so, it’s not reported in USAspending.gov or on SAM.gov.

However, SNL reports the lab’s total subcontract spending in its annual Economic Impact Statements. The FY 2025 Economic Impact Statement (EIS) reports more than $1.7B in subcontract spending, with an average of 62% awarded to small businesses. Small Disadvantaged Businesses (SDB), which includes the 8(a) program, averaged 30% of all small business spending; Woman-Owned Small Business (WOSB) 20%, Veteran-Owned Small Business (VOSB) 19%, Service-Disabled Veteran-Owned Small Business (SDVOSB) 12% and HUBZone Businesses 7%.

 

 

 

 

 

 

 

 

 

The top subcontracting industries, based on total EIS reported invoiced amounts, were:

• Computer-related services
• Research and development in Physical, Engineering and Life Sciences
• Commercial and Institutional Building Construction
• Engineering Services
• Computer Facilities Management Services
• Analytical Laboratory Instrument Manufacturing.

One of the largest subcontracts, the $700M Blanket Purchase Agreement (BPA) subcontract held by Encantado Technical Solutions, LLC in 2021, provides third-party telecommunications and information technology (IT) support services including enterprise IT, network operations, end-user support, servers, cybersecurity and infrastructure support across both sites. Similarly, the other market venues above offer opportunities within the current contract and other SNL site requirements.

Follow-on Information

The incumbent contract is scheduled to expire in April 2027. However, the NNSA System of M&O Contracts strategy doesn’t project a follow-on solicitation until FY 2036 – 10 years away. Therefore, NNSA will likely award a long-term contract extension or sole-source award to the incumbent, which is actually good news for subcontractors.

Significant changes to contract requirements, including the scope of work, Reps and Certs and other solicitation sections are expected from the latest Revolutionary FAR Overhaul (RFO), category management and consolidations, and changes to small business programs. These changes will flow down to subcontracting plans. Moreover, the dynamic state of government contracting will include additional changes over the next decade. Continued prioritization of national security and energy independence and evolving information technologies will drive increased subcontracting and teaming opportunities in multiple primary vertical markets below to meet ongoing M&O and mission-related needs.

 

 

 

 

 

 

 

 

 

Understanding these scenarios is especially important for small businesses.

Small Business Programs

In addition to the Small Business Administration and Energy programs, SNL provides multiple venues for small businesses as contracting officials work toward meeting itsFY 2026 subcontracting goals below:

• Total SB: 49%
• SDB: 10%
• WOSB: 9.25%
• VOSB: 7%
• SDVOSB: 5%
• HUBZone: 3%.

Other initiatives include technology partnerships, small business forums and 1:1 supplier engagements. The Sandia Business Opportunities Website (BOW) lists current business opportunities. Small businesses should also consider the benefits of the DOE mentor-protégé program.

Key Takeaways

Follow-on procurement cycles for these long-term contracts typically create challenges for contracting officials and vendors, including time, money and labor. This often results in contract extensions and multi-year sole-source awards to the incumbent to allow the government time to conduct market research and develop the new contract requirements to include technology and mission changes since the incumbent contract was awarded. But that’s not always a bad thing. The added time gives potential competitors and subcontractors a longer window to develop response strategies. Such is the case with the forecasted 10-year solicitation for SNL, and it’s not too early to plan for this recompete and to consider subcontracting opportunities between now and then.

Leveraging the long lead time and historical information, potential offerors, partners and subcontractors can more thoroughly evaluate their competitive position and determine whether to pursue the follow-on contract. Once bid/no-bid decisions are made, firms should initiate marketing communications with contracting officers, program managers and potential teaming partner contacts, especially those with a niche or innovative solution to offer. 

Firms must also remain vigilant regarding regulatory, policy and small-business programs changes. They must pay close attention to the agency’s deviations from the RFO and ensure continued compliance in all areas. Consistent communication and proven performance will drive success for those firms.

This article provided a snapshot of this upcoming opportunity. More detailed information, including previous solicitation and contract documents, and contact information for this opportunity, is available to Deltek GovWin IQ subscribers here.