Leidos clears major DOE recompete

Through a joint venture, Leidos clears one of its most significant recompete challenges of the year and will keep a major Energy Department contract through a joint venture.

The Energy Department on Thursday awarded a potential 10-year, $4 billion contract for cleanup and other restoration services at a former nuclear fuel production complex in southern Washington state.

In a release Thursday, DOE said it selected the Hanford Mission Integration Solutions joint venture over two other bidders for the contract that has an initial three-year option period and then a second two-year option period.

Leidos, Centerra Group and Parsons Corp. are involved in the joint venture that will take over work at the Hanford site after a 120-day transition period. The current contract held by the Mission Support Alliance joint venture will expire on May 25.

Reston, Virginia-based Leidos owns 88 percent of Mission Support Alliance with Centerra as the other partner. The current contract represents approximately 4 percent of Leidos’ annual revenue, according to a Nov. 22 research note from analysts at Wells Fargo Securities. 

The new contract covers similar services currently provided by Mission Support Alliance such as IT, management of a training center, security, utilities, land management, security, road services, and fire and other emergency services. Leidos inherited the contract through its merger three years ago with the former Lockheed Martin IT services business.

Hanford was one of two major recompetes on Leidos’ radar for this year. The second is $4.6 billion contract also inherited through the Lockheed deal to help the Defense Information Systems Agency run a global information grid that was expected to be awarded by the end of this year. Work under the current DISA grid contract also represents 4 percent of Leidos' annual sales.

Established in 1943 as part of the Manhattan Project, the Hanford Site formerly housed a series of plutonium and electricity production reactors that were mostly shut down between 1964 and 1971. The final reactor operated until 1987.

Since then, Hanford has been subject to the country’s largest and one of the world’s largest environmental cleanup efforts.

“We look forward to helping the DOE accelerate the Hanford cleanup mission and produce cumulative cost savings,” Leidos said in a statement through a spokesperson.

One of the new joint venture’s tasks will be to improve infrastructure supporting a radioactive waste treatment plant required to start operating in 2023.