Weapons Complex Monitor Vol. 30 No. 47
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Weapons Complex Monitor
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December 13, 2019

AECOM-Led Joint Venture Wins Potential $10 Billion Hanford Cleanup Contract

By Wayne Barber

The U.S. Energy Department said Thursday it has awarded a potential 10-year, $10 billion contract for ongoing remediation of the Hanford Site Central Plateau in Washington state to a joint venture of AECOM, Fluor, and Atkins.

The proposal by Central Plateau Cleanup Co., as the partnership is known, provides the best value to the federal government on cost, key personnel, past performance, and technical and management approach, DOE’s Environmental Management Consolidated Business Center said in a press release.

The AECOM-Fluor-Atkins team apparently outdid two other major bidders, one headed by Jacobs and the other led by Bechtel, an industry source said Thursday. The source did not know what other companies had joined those bids.

“We are disappointed with the news, but are looking forward to learning more during the debrief,” Jacobs spokeswoman Katie Warner said in a Friday email.

The contract marks a changing of the guard for the Central Plateau project. Jacobs subsidiary CH2M Hill Plateau Remediation Co. has been on the job since October 2008 under a $6.4 billion contract extended in October of this year through September 2020. The latest extension, however, includes a clause allowing DOE to end the contract early once a 60-day transition period starts for the new contract.

The incumbent faced problems with radiation contamination during demolition of the Plutonium Finishing Plant, a major component of the Central Plateau contract. That probably did not help its chances of retaining the business.

Hanford’s Central Plateau is home to plutonium fuel processing sites, waste disposal operations, and other infrastructure from its former production mission.

The Energy Department issued the final request for proposals for the Central Plateau contract in February and bids were due in March. At one point last spring, the agency’s Office of Environmental Management had hoped to issue the contract by August.

In addition to safe management of Richland Operations Office cleanup facilities, the contract also calls for deactivation, decommissioning, and demolition of various structures; remediation of certain waste sites; and general waste management, DOE said. The team must also prepare documents to support remediation under the Tri-Party Agreement between DOE, the state of Washington, and the U.S. Environmental Protection Agency. The vendor will also prepare U.S. Resource Conversation and Recovery Act /Comprehensive Environmental Response Compensation, and Liability Act decision reports.

The Energy Department press release does not mention the Plutonium Finishing Plant, which CH2M is in the final phases of tearing down.

In 2016, CH2M also took over management of the Hanford River Corridor cleanup operation from prior vendor Washington Closure Hanford. That business, including teardown of the 324 Building, will also convey to the new team.

Contract Employs End-State Approach

Two parents of the winners of the contract, Fluor and AECOM, are exiting the government services business.

The lead partner, Maryland-based AECOM Management Services, is in the process of being sold by parent AECOM to a joint venture of two New York investment houses in a $2.4 billion deal expected to close early in 2020. Likewise, South Carolina-based Fluor Federal Services is part of a business segment placed on the sales block by its Texas-based Fluor parent.

The Central Plateau deal is the first multibillion-dollar contract awarded by DOE under its so-called end-state contracting model. The new approach employs a master indefinite-delivery/indefinite-quantity contract. Firm-fixed-price and cost reimbursement task orders will be issued through the IDIQ contract, giving the agency more flexibility to adjust work scopes as circumstances dictate. The end-state approach also provides an incentive for vendors to earn higher fees by meeting or exceeding work timelines.

The new contract marks the second major award by the Office of Environmental Management in the past two weeks.

On Dec. 5, DOE awarded a potential 10-year, $4 billion contract for Hanford support services to Leidos-led Hanford Mission Integration Solutions (HMIS). Other members of the venture are Centerra Group and Parsons Government Services.

Leidos and Centerra are also the two partners in the incumbent “landlord” contractor, Mission Support Alliance (MSA). The contract includes a variety of tasks ranging from road work to emergency services to technical support. The other bidders, groups led by PAE and Huntington Ingalls, have not filed protests as of deadline for Weapons Complex Monitor.

The Energy Department debriefings of the Leidos-led winner and two runners-up should be completed sometime next week if they have not happened already, sources said this week. The debriefings provide bidders with insight on the DOE decision and typically start the less-than-two week clock for bid protests to be filed.

Hanford Mission Integration Solutions “is preparing to begin transition of services and looks forward to working with DOE,” Leidos spokeswoman Suzzanna Martinez said by email Thursday. She said the venture is working out details on issues like subcontractors and employment, but largely declined comment on other specifics.

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