Under its initial seven-year contract at the Idaho site, CWI’s ability to earn fee was tied primarily to its ability to complete work at or under the contract’s target cost. Late last year, DOE provided the contractor a final fee determination of approximately $257 million. However, DOE’s final fee determination was approximately $32 million less than what CWI had requested. The disagreement between the two sides reportedly stems over how certain costs were allocated on the contract. CWI came under question over how it allocated some G&A and fringe costs between target and non-target work after it received a significant infusion of Recovery Act funds, as well for how it allocated some costs tied to the Sodium-Bearing Waste Treatment Facility/Integrated Waste Treatment Unit project, and as a result saw its fee lowered by several million dollars.
According to the Department’s final fee determination, CWI came in approximately $394 million below the contract’s final target cost, resulting in the contractor earning approximately $118 million in incentive fee (based on a 30-70 savings share with the government); and a target fee of approximately $189 million. However, the contractor lost more than $45 million for delays in completing the SBWT/IWTU and for failing to complete the processing of the remaining liquid waste at the Idaho site by the time its initial contract ended. CWI also lost slightly more than $1 million for worker safety and health issues.
