Morning Briefing - June 13, 2018
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June 13, 2018

Judge Says NNSA Must Return $20M in Reclaimed Fees to MFFF Contractor

By ExchangeMonitor

A federal judge ruled Tuesday that the National Nuclear Security Administration (NNSA) must return some $20 million in fees its clawed back in 2016 from the prime contractor on the unfinished, over-budget Mixed Oxide Fuel Fabrication Facility (MFFF).

In a series of filings since consolidated in the U.S. Court of Federal Claims, CB&I AREVA MOX Services sued the NNSA in 2016, seeking some $200 million in fees and damages for the Energy Department agency’s alleged mismanagement of the project.

Last year, in a motion for summary judgment, MOX Services asked Judge Thomas Wheeler to grant a quick partial award of roughly $20 million in the case: fees the company said the NNSA improperly clawed back in 2016. Wheeler on Tuesday ordered the agency to return the money, essentially accepting the contractor’s argument that the NNSA could not make a decision on fee awards until MFFF was complete.

“Regardless of which party is responsible for the increased costs and schedule delays, none of the contract provisions permits the NNSA to claw back provisional incentive fees before the completion of the MFFF,” Wheeler wrote.

The NNSA had argued it could reclaim the fees after the end of the contract’s first option period, which lapsed in 2016.

The partial award ordered Tuesday is not the end of the case. MOX Services and the NNSA are set to take the matter to trial in 2019.

The MFFF was designed to turn 34 metric tons of surplus weapon-usable plutonium into commercial reactor fuel under an arms-control pact with Russia. The facility, put under contract in 1999 and under construction since 2007, was supposed to be finished in 2016 and cost around $5 billion. Now, MOX Services estimates it will take at least until 2029 to finish MFFF and cost about another $5 billion.

The NNSA wants to turn the MFFF into a facility to produce fissile nuclear-warhead cores called plutonium pits.