DOE PROVIDES $40M TO PARSONS FOR SWPF CONSTRUCTION

By ExchangeMonitor

The Department of Energy late last week provided $40 million to contractor Parsons for construction of the Salt Waste Processing Facility at the Savannah River Site, resolving near-term funding concerns raised by the contractor. “The $40M was a fourth quarter allocation of construction funds provided as committed in the baseline and the contract. It supports continued construction progress,” DOE Savannah River spokesman Jim Giusti said in a written response yesterday. In late June, Parsons SWPF Project Manager Lou Jackson told DOE that the contractor would have to issue layoff notices to workers starting in early August unless the funding was provided, stating that the project would reach its $1.121 billion funding limit in October. “This would likely require Parsons to reduce the Construction craft workforce and significantly decelerate Construction activities,” Jackson wrote in a June 29 letter to DOE. DOE did not comment on the layoff possibility and Parsons did not respond to request for comment yesterday.

The funding issues for SWPF are tied to a revised estimate-at-completion for the project Parsons submitted in March. That places the total project cost of the SWPF at approximately $1.78 billion, an increase of $440 million from previous estimates, largely due to delays in the delivery and installation of key process vessels. Because Parsons has informed DOE that it cannot complete the project within baseline funding, in recent weeks DOE has worked to formulate guidance for future funding so that Parsons can complete a cost overrun proposal, Giusti said in late July.

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