EM Procurement Chief Says Decision on Possible Rebid Coming ‘Soon’
Mike Nartker and Kenneth Fletcher
WC Monitor
9/5/2014
The Department of Energy appears to be in the final stages of deciding whether to rebid the Portsmouth D&D contract or exercise the five-year option remaining in Fluor-B&W Portsmouth, LLC’s current contract. Jack Surash, Deputy Assistant Secretary for Acquisition and Project Management in DOE’s Office of Environmental Management, largely declined to comment on the Department’s plans for the Portsmouth D&D contract during a business forum held with industry officials at DOE headquarters late this week, though he did say the Department would be making a decision “soon” on whether or not to recompete. Surash also appeared to acknowledge that DOE is taking extra time in making such a decision, saying the Department is “running a little bit behind.”
The DOE Office of Environmental Management typically begins planning for whether or not to rebid a contract approximately two years ahead of when the base period comes to an end; FBP’s current five-year contract is set to expire around the end of March 2016. Since winning the initial Portsmouth D&D contract in the summer of 2010, FBP has worked to transition the site from former leaseholder USEC, as well as to move forward with decommissioning activities at one of the former uranium enrichment plant’s three massive process buildings, reducing or replacing aging site infrastructure and planning for the possible construction of an on-site disposal cell, among other activities.
Contractor Performance, Changes in Work Could Help Influence Decision
However, among the factors that could influence DOE’s ultimate decision on whether or not to recompete the Portsmouth contract is what has been a steady decline in FBP’s annual fee performance since assuming control of the Portsmouth D&D project in 2011. For its first evaluation period, which ran March 29, 2011 to Sept. 30, 2011, FBP earned approximately 93 percent of the available fee; while in FY 2012 the contractor earned approximately 86.5 percent of the available fee. For FY 2013, FBP earned approximately 75 percent of the available fee—$12.23 million out of an available $16.04 million.
Another possible factor is what has been a significant change in how the Portsmouth D&D project will be carried out, largely driven by reduced available funding. DOE had initially sought to have all three of the Portsmouth Gaseous Diffusion Plant’s three former process buildings decommissioned and demolished by the time FBP’s 10-year contract came to an end. Most recently, FBP has been working to have one of three process buildings—X-326—ready for demolition by the time its base contract expires, though FBP Site Project Director Dennis Carr warned earlier this year that DOE’s Fiscal Year 2015 budget request was insufficient to meet that goal.
DOE Seeking ‘Anomaly’ in Anticipated CR to Help Prevent Layoffs
Also due to funding issues, the Portsmouth D&D project is facing the impending threat of significant layoffs that could go into effect as soon as next month. FBP has estimated it is facing a $110 million budgetary shortfall heading into FY 2015, and as a result the contractor has announced plans to eliminate a total of 675 positions out of the Portsmouth D&D project’s current workforce of approximately 1,900 employees through a mix of voluntary separations and involuntary layoffs.
The Portsmouth D&D project is funded through annual Congressional appropriations as well as by DOE providing FBP with stocks of surplus uranium, which the contractor sells, using the proceeds for work. However, the contractor has had to grapple with steadily declining uranium prices, decreasing the value of the material provided to help augment funding. In addition, DOE has announced plans to reduce the amount of excess uranium to be made available to help fund cleanup activities. While the Department had previously planned to provide up to 2,400 metric tons of material per year, DOE is now looking to provide up to 2,055 metric tons for cleanup purposes annually from 2014 through 2021. Some additional material may be available, though, if the National Nuclear Security Administration doesn’t use its full annual allotment of up to 650 metric tons per year.
In an apparent effort to help prevent some of the planned layoffs, DOE is reportedly pursuing an anomaly of $66 million in the anticipated Continuing Resolution lawmakers are expected to pass to continue to fund the government past Oct. 1 in the absence of completed FY 2015 appropriations bills, WC Monitor has learned. The Obama Administration submitted the anomaly request to Congressional appropriators. However, the bar for including anomalies in the planned CR is expected to be high, according to Congressional staff.
‘The Whole Community Faces Significant Economic Problems’
As the clock ticks down on the Portsmouth D&D layoffs, members of Ohio’s Congressional delegation, as well as local officials, have urged DOE to take action. The pending layoffs are “a critical issue,” Pike County, Ohio, Commissioner Blaine Beekman told WC Monitor late this week. “The whole community faces significant economic problems,” he said. Beekman warned that DOE runs the risk of significantly damaging relations with the local community near the Portsmouth site if the layoffs go into effect. “It’s going to have a tremendous negative effect,” he said. “It is going to jeopardize the relationship because it appears to the community here that we’re disassociated from the planning back in DOE.”
