Morning Briefing - May 14, 2019
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May 14, 2019

MOX Contractor, NNSA Set for Oral Arguments Over Fee-Interest Payment

By ExchangeMonitor

Oral arguments are set for May 23 between the contractor for the canceled Mixed Oxide Fuel Fabrication Facility (MFFF) and its customer, the National Nuclear Security Administration, over some $800,000 in interest the contractor says it is owed.

CB&I Areva MOX Services sued the National Nuclear Security Administration (NNSA) in 2016, and repeatedly afterward in cases that have been consolidated into the master lawsuit, for more than $200 million in damages and fines related to cancellation of the partially built plutonium disposal plant at the Savannah River Site in Aiken, S.C.

The arguments to be heard next week on a conference call between the parties and Judge Thomas Wheeler of the U.S. Court of Federal Claims concern an interest payment on more than $20 million in clawed-back fees MOX Services successfully recovered from the NNSA in July 2018. 

In March, after trying unsuccessfully to make NNSA cough up the interest payment, MOX Services asked the court to force the agency to pay.

The company says the Federal Acquisition Regulation, the branch of federal law that deals with government procurements, entitles it to interest payments on the roughly $20 million fee, which the NNSA improperly clawed in 2016 and sat on for about two years until MOX Services secured a summary judgment to recover the money.

The NNSA refused to pay interest on the roughly $20 million because the repayment “was a function of the successful appeal of a government claim [in court] rather than a successful contractor claim,” according to a Sept. 19, 2018, letter to the company from the agency appended to MOX Services’ motion to recover interest.

The MFFF was supposed to turn 34 metric tons of surplus weapon-usable plutonium into commercial reactor fuel as part of a U.S.-Russian arms control pact. After determining the project was too expensive, the NNSA pulled the plug last October and now plans an alternative dilute-and-dispose approach.