The Department of Energy has once again demanded the return of $20 million in provisional fee paid to Salt Waste Processing Facility contractor Parsons, reiterating its requirement for the immediate repayment of the money in a July 2 letter, obtained by WC Monitor. “Based on Parsons submittal of the updated Estimate of Completion on March 30, 2012, it now appears highly improbable that Parsons will achieve any costs, milestones or throughput incentives as outlined in the contract,” DOE wrote. “Therefore, the provisional fee payments constitute contract debts … i.e. amounts paid to Parsons to which Parsons is not currently entitled under the terms and conditions of the contract.”
Parsons has until July 16 to formally dispute the debt, if it believes the “amount is invalid or the amount is incorrect,” an action the contractor appears likely to take. The dispute over the provisional fee stretches back to April and in previous correspondence with DOE on the matter, Parsons rejected DOE’s assessment on a number of grounds, including that its contract does not require provisional fee to be returned over cost issues and that it remains uncertain whether Parsons has indeed breached the cost cap in its contract. DOE, for its part, has rejected the contractor’s arguments, noting in the most recent letter that if the debt is not paid, the Department “may initiate procedures … to offset the debt against any payments otherwise due Parsons.”
Parsons’ new estimate for SWPF, which was submitted in March and is still undergoing review by DOE, places the total project cost of the SWPF at approximately $1.78 billion, an increase of $440 million from previous estimates. The cost increase is tied largely to the lengthy delay Parsons experienced in the delivery of a key component of the facility—a set of 10 large vessels—as well as subsequent productivity impacts among other factors. All 10 vessels have since been delivered, and the last four arrived at Savannah River and were installed in June.