Cost Reimbursement Not Going Away for Legacy DOE Cleanup Work, Official Says

After a morning plenary session in which the United Kingdom’s top nuclear decommissioning official extolled the virtues of transitioning nuclear cleanup partnerships with industry away from cost-reimbursable contracts, the head procurement official in the Energy Department’s Office of Environmental Management (EM) said such contracts will remain the cornerstone of legacy waste cleanup in the United States.

“In general, our contract vehicle that we use in EM is a cost-reimbursement contract,” Jack Surash, EM deputy assistant secretary for acquisition and project management, said in a question-and-answer session Monday morning during a panel discussion at the 2016 Waste Management Conference.

Surash was one of eight DOE EM officials who spoke on the well-attended two-hour panel, which directly followed a plenary session in which John Clarke, chief executive officer for the U.K.’s Nuclear Decommissioning Authority – one of the nation’s so-called non-departmental public bodies – described the impending transition away from cost-reimbursement contracts for cleanup of that nation’s largest nuclear decommissioning project, the Sellafield site near Cumbria.

Fully cost-reimbursable contracting “wasn’t representing value for money,” Clarke said. The U.K. government therefore decided to make Sellafield Ltd. into a wholly owned subsidiary of the Nuclear Decommissioning Authority, which will lead to elimination of about 350 jobs at the site and some 20 positions within the authority itself as some levels of bureaucracy are cleared away, the NDA chief said.

The biggest fixed-price deal anywhere near the DOE weapons complex is only peripherally related to cleanup: the roughly $950 million fixed-price deal Ameresco, of Framingham, Mass., got in 2009 to build a biomass power cogeneration facility at the Savannah River Site in South Carolina. Some smaller EM contracts also include fixed-price options. The Hanford Site 222-S Laboratory contract awarded to Wastren Advantage in 2015 is one such deal, Surash said. The deal, which has a two-year base period, is worth $44.6 million, including options, and calls for Wastren Advantage to analyze liquid waste in the Hanford tank farms to support the waste’s eventual solidification in glass at the Waste Treatment Plant under construction at the site by Bechtel National.

But future contracts for big-league EM cleanups — for example, the Los Alamos National Laboratory remediation work the office plans to put out for bid this year before Los Alamos National Security’s bridge contract runs out in 2017 — probably will not have significant fixed-price milestones, despite the allure such deals may present to budget conscious lawmakers on Capitol Hill, Surash said: “We’ll look, but I wouldn’t hold out a lot of hope at the prime level.”