Todd Jacobson
WC Monitor
5/16/2014

Fresh off its defeat at Y-12 and Pantex, Babcock & Wilcox is planning to make a push for an increased role at the Savannah River Site, President and Chief Executive Officer Jim Ferland said on a conference call with investors this week. B&W is “working hard on positioning for Savannah River, which we believe will come up in the next year to two,” Ferland said. “And that’s a big opportunity for us.” B&W was on the URS team that lost out on the SRS management and operating contract to Fluor-led Savannah River Nuclear Solutions in 2008. That contract is set to expire Sept. 30, 2016, but it could be extended until July 2018 if additional options are exercised. The Department of Energy has not yet disclosed its future contracting plans for the site. “We do not have a large presence of Savannah River today. And we think we can add a lot of value as a supplier on that front,” Ferland said. “So, that’s what we are looking at.” 

B&W spokeswoman Aimee Mills said the company had recently opened an office in Aiken, S.C., to support its work as part of URS-led Savannah River liquid waste contractor Savannah River Remediation LLC and “to look at opportunities to increase our presence going forward.” At the opening of the company’s Aiken office earlier this month, Ken Camplin, the Chief Business Development Officer for B&W’s government operations, emphasized B&W’s interest in having an expanded role at Savannah River. “Since 1995, we’ve had offices on and off in the area so we can be a physical presence and support our staff here,” Camplin told the Aiken Standard newspaper. “When we look at SRS’s ambitions for the future, we can’t help but believe that it’s a good fit for B&W to continue being involved in Savannah River, and we certainly intend to do that.”

For Now, Uncertainty Reigns at SRS

B&W was an original member of the URS-led Washington Savannah River Company team that managed Savannah River from 1995 to 2008, and B&W’s interest in a follow-on Savannah River M&O contract will likely be governed by how DOE constructs the contract, according to industry officials. B&W would likely be a candidate to lead a team for a contract structured similarly to the current contract with a large portion of nuclear operations work balanced by dwindling cleanup work at the site, but if the M&O approach were to be abandoned in favor of a more project-based strategy, B&W would be more likely to serve a support role like it currently performs at West Valley, Portsmouth, Paducah and the Waste Isolation Pilot Plant. “I think, like a lot of folks, they’re waiting to see just what DOE is going to do at Savannah River before they really make up their minds how they’re going to approach things,” one industry official told WC Monitor.

Ferland also said B&W was gearing up to bid for management of Atomic Energy of Canada’s Chalk River nuclear laboratories and keeping an eye on the National Nuclear Security Administration’s Sandia and Kansas City Plant M&O contracts while it focuses on “rebuilding and growing” its Technical Services Group. B&W said last month that it was integrating its Technical Services Group with its Nuclear Operations Group into a Government Operations sector, with both units being led by NOG President Peyton “Sandy” Baker. Ferland said the move would generate “some straight up cost savings via consolidation [and] will help us better leverage and move talent back and forth between Nuclear Operations Group and the Technical Services division that should enhance the quality of our bids moving forward.”

B&W Discloses 2014 First Quarter Earnings

B&W’s income and revenue decreased during the first quarter of 2014 compared to the first quarter of 2013, but the reduced performance met the expectations of financial analysts. B&W yesterday reported $662 million in revenues during the first quarter of 2014, down $143.4 million, while it said it had $45 million worth of net income, under the $47.2 million it reported during the same period last year. Earnings per share, however, were 41 cents, and adjusted earnings per share, which exclude one-time charges, were 42 cents, which met the forecast of analysts. B&W reported a slight $600,000 increase in operating income for its Technical Services Group ($14.8 million), but a drop in revenue, from $25.2 million to $24.5 million. Its Technical Services Group includes its work for the NNSA and DOE’s cleanup program.