Between at least 2009 and 2014, the Energy Department’s Office of Environmental Management and Hanford Waste Treatment and Immobilization Plant (WTP) contractor Bechtel National, Inc., “had not always” properly executed procurement and material management activities at DOE’s Office of River Protection (ORP), according to a Nov. 16-completed DOE inspector general report released yesterday.
Among the IG’s findings were that sometimes Bechtel and ORP failed to identify nonconforming items resulting from vendor errors in a timely manner, did not quickly resolve nonconforming items after they were identified, and failed to recover costs from vendors after they made errors. For example, in 600 of the 1,365 nonconformances the IG reviewed, Bechtel did not identify the issue until at least two years after items arrived on site. Moreover, in 22 percent of those total reviewed cases, DOE did not resolve issues until a year or more after they became known, the report states. Additionally, Bechtel failed to get reimbursed for costs stemming from its amelioration of vendor-created errors, according to the report. “In many cases Bechtel either canceled efforts to recover the costs or recovered only a portion of the costs incurred to resolve the nonconformance, often due to the length of time that had transpired,” the report states. For example, Bechtel recovered only $29,100 of $138,822 in direct costs incurred for rework performed on High-Level Waste duct support welds.
EM concurred with the IG’s five draft recommendations, which recommended that DOE Assistant Secretary for Environmental Management Monica Regalbuto direct the ORP manager to ensure: (1) that Bechtel fully comply with procurement policies that address weaknesses named by the IG; (2) that the WTP prime contractor “considers all factors” as appropriate in determining priorities for resolving nonconforming parts and procedures; (3) that Bechtel executes corrective actions for found weaknesses and monitors their implementation; (4) that ORP inserts federal acquisition language into Bechtel’s WTP contract that establishes a “timeliness” of performing inspections of supplies, services, and resolving noncompliances; and (5) that ORP strengthen oversight by giving more emphasis to the timely identification and resolution of nonconformances and the back-charging of subcontractors and vendors.
But in her Sept. 29 written response to the IG’s draft report, Regalbuto also challenged the accuracy of some of the report’s comments, claiming that the IG did not provide appropriate context for its assertion that Bechtel “was unable” to show that vendors had fixed or submitted revisions for faulty calculations associated with the sizing of an uninterruptable power supply (UPS) at WTP. “This citation…does not acknowledge that on November 17, 2010, the WTP Contractor removed the UPS batteries from the original order placed with its vendor,” Regalbuto wrote. “That action eliminated the need for the vendor to resolve the battery calculations.”
The IG had the second and last say in the final report, insisting that while more context could have been added, the issue remained serious even with that context. “Specifically, the Department’s comments omitted the fact that the batteries were not removed from the original order until 3 years after the calculations were first submitted to Bechtel by the vendor in August 2007,” the IG final report states. A vendor resubmission of the calculations should have taken 10 working days, but no action was taken in that three-year period to resolve the issue, and Bechtel did not follow its procedures to follow up on its request for revision.
Furthermore, responding to an issue cited by the draft report that appears to have been deleted from the final IG review, Regalbuto countered another finding which she said implied that Bechtel used one material acceptance plan (MAP) for the procurement of two vessels being fabricated by different vendors. In actuality, she wrote, Bechtel was procuring both vessels from the same vendor, yet the contractor “rectified” the problem when it removed one of the vessels from the original vendor’s scope of work, and then awarded it to a separate vendor with a different MAP. Although Bechtel did not have a MAP in place when it made the second award, its procedures allowed it to install a new MAP afterward. “These actions resulted in rectifying the issue and rendered it obsolete with no impact to mission cost or schedule,” Regalbuto wrote.
Between DOE’s award of the WTP contract to Bechtel in 2001 and the end of fiscal 2014, Bechtel had procured approximately $4 billion in parts and materials for plant construction.
Jobs