The prime contractor for the National Nuclear Security Administration’s (NNSA) Y-12 and Pantex sites spent about $30 million from 2016 to 2018 to create consolidated business information systems it says will save the government nearly $3 billion over the life of a 10-year site management contract, according to the Government Accountability Office.
That is less than the roughly $35 million the NNSA and contractor Consolidated Nuclear Security thought they would spend in the first of multiple phases in a project to consolidate previously separate administrative and financial systems — among others — at the Y-12 National Security Complex in Oak Ridge, Tenn., and the Pantex weapons-assembly plant in Amarillo, Texas.
The first phase of what the company dubbed the “Business System Modernization Project” included “consolidation of financial, human resource, and supply chain management processes and systems,” according to the Government Accountability Office report.
In a controversial move aimed at saving money, the NNSA in 2014 merged management of Y-12 and Pantex under a single contract awarded to the Bechtel-led Consolidated Nuclear Security. With options, the company’s contract runs 10 years, with an average annual value of roughly $2 billion.
Consolidated Nuclear Security plans to finish combining business systems at Y-12 and Pantex by 2020, the GAO said in a Jan. 31 report.
The NNSA and its contractor have yet to work out how much money the consolidation has saved since 2014. In the fiscal 2019 National Defense Authorization Act, Congress ordered the GAO to calculate those savings . The GAO did not say in the report when it might publish the overall cost savings Consolidated Nuclear Security has so far achieved.
As part of its merger and transformation plan, Consolidated Nuclear Security estimated its cost reduction proposal could save the government about $310 million between fiscal 2014 and fiscal 2019, which ended on Sept. 30. The five-year base period on the company’s contract runs out June 30, 2019, and the NNSA has already picked up a two-year option through June 2021.
For fiscal years 2020 and 2021, Consolidated Nuclear Security estimates its cost reduction plan will save the NNSA a little more than $55 million. The company could earn up to roughly $110 million in fees over the two-year option period.
Members of Congress have pressed the NNSA for details about how much money the combined Y-12 and Pantex contract has saved, because savings are a condition of the agency picking up Consolidated Nuclear Security’s options. There are two more options remaining on the pact: one for two years and one for a single year.
