The Department of Energy has broken off talks with Salt Waste Processing Facility contractor Parsons on a potential cost cap or fixed-price contract for the project, leaving SWPF without a clear path forward, WC Monitor has learned. The talks, which have been conducted directly between Deputy Secretary of Energy Dan Poneman and Parsons Chief Executive Officer Charles Harrington, had been focused on reaching some sort of agreement on a funding level, contract structure, and baseline that would see the project finished and into its initial startup and operations period. With those talks now ended, a small group of Parsons and DOE personnel has been tasked with developing a baseline to complete construction and submitting it within 30 days. Notably, though, DOE has yet to provide a projected funding level to guide the baseline—the group is expected to propose a level roughly in between the “unconstrained case” of $240 million that Parsons said earlier this year could result in completing construction within two years and the $80 million DOE has been using as a planning level for the project that would result in completing construction in 2023 or beyond.
When asked about the breakdown in negotiations yesterday, DOE spokeswoman Kristen Ellis said: “DOE remains committed to ensuring the continued safe progress on the Salt Waste Processing Facility. Options to complete SWPF in as cost-effective and timely manner as possible are being developed and evaluated. Due to procurement sensitivities we will not discuss particulars of ongoing or upcoming negotiations with our contractors.” For its part, Parsons declined to comment.
DOE and Parsons have been working on developing new estimates for the project since early this year, following lengthy delays in the delivery and installation of several key vessels to the plant. The SWPF is designed to exponentially increase the capacity for processing salt waste stored in high-level waste tanks at Savannah River for disposition, and is a critical part of plans to close out the remaining 47 tanks on site in time to meet regulatory commitments. The 10 key vessels for the SWPF were installed earlier this year after delays linked to subcontractor issues. But as a result of the delays, Parsons developed a new estimate-at-completion this spring that increased total costs by $440 million, to $1.78 billion, to open the plant in time to meet an October 2015 regulatory commitment for startup. Since then, Parsons and DOE have repeatedly clashed over what approach to take with funding and schedule for the facility.
