The Energy Department published its justification May 31 for contracting a Centrus Energy subsidiary to demonstrate high-assay low enriched uranium (HALEU) production without competitive bidding.
The federal government wants to deploy a 16-machine cascade at the Portsmouth Site in Ohio to demonstrate production of 19.75% enriched uranium fuel by June 2022 using domestic technology. Centrus’ American Centrifuge Operating LLC unit is the only entity capable of meeting that goal, DOE said.
The Centrus unit is already subleasing space at the Piketon, Ohio facility where it developed the now-cancelled American Centrifuge demonstration. This sublease, which is set to expire this month, is expected to be extended about three more years.
In addition, Centrus Energy filed a report with the Securities and Exchange Commission the same day saying its affiliate has reached a “letter agreement” with the Energy Department worth $6.4 million in payments to the companies while the parties work on a definitive contract by Oct. 31.
The ultimate contract is expected to be an incrementally funded, cost reimbursable contract through June 1, 2022 with DOE shouldering up to 80% of the project costs.
Urenco USA, which runs a uranium enrichment plant in Eunice, New Mexico, is part of a company based in the United Kingdom, and its technology, “is not U.S.-origin,” DOE wrote Friday. Therefore, the Urenco product “could not be used for any U.S. defense purposes.” Sen. Martin Heinrich (D-N.M.) has urged DOE to consider the Urenco facility in New Mexico for some of the business.
In January, DOE’s Office of Nuclear Energy at the Oak Ridge Site in Tennessee announced its intention for Centrus to get the sole-source contract to demonstrate production of HALEU suitable for a range of civilian and defense applications. There were no responses to the notice of intent, the agency said. There was one email received by the secretary of energy’s office touting a laser isotope separation technology, but it is not ready to meet the agency’s schedule requirements.
In 2038, the semiautonomous National Nuclear Security Administration will need a new source of low-enriched uranium in order to create tritium to maintain the explosive power of U.S. nuclear weapons.
The Energy Department outlined its justification of a contract “by means other than full and open competition” in a posting Friday on a federal procurement website. The venture is the only U.S.-owned and -controlled entity with a Nuclear Regulatory Commission license that would enable it to meet the timetable.
The total estimated value of the work is not expected to exceed $115 million. U.S. Sen. John Barrasso (R-Wyo), who represents a major source of domestic uranium, has criticized Centrus’ proposed sole-source contract from DOE’s Office of Nuclear Energy.
