The U.S. Department of Energy and the contractor hired to build a now-terminated plutonium recycling plant at the Savannah River Site in South Carolina are seeking a joint dismissal of nine lawsuits the company filed against its employer over the past four years.
Filed Wednesday in the U.S. Court of Federal Claims, the stipulation of dismissal makes good on a Nov. 19 announcement that the two parties had inked a comprehensive settlement that wiped the slate clean on the MOX project. The lawsuits totaled $281.6 million and largely involved claims from MOX Services that the Energy Department had not adequately paid for work conducted on the Mixed Oxide Fuel Fabrication Facility (MFFF).
The one-paragraph entry requests dismissal of the cases, which have been consolidated into one lawsuit, and says each party will cover their respective expenses associated with terminating the case. The entry does not give details on the costs to date.
MOX Services is the plaintiff in each case arising from its work on the MOX plant, which was intended to convert 34 metric tons of weapon-usable plutonium into commercial fuel for nuclear power plants, per the terms of a U.S.-Russian nonproliferation agreement.
Federal Claims approval of the shared motion would leave several other lawsuits between the two sides in that court and in the U.S. District Court of South Carolina. It is unclear why the others are not mentioned in the status report, but the NNSA reported in its Nov. 19 announcement that the settlement “resolves all contract litigation and covers the cost of contract closeout.”
An NNSA spokesperson added Thursday via email that U.S. Department of Justice will file a similar dismissal request for its fraud case against the contractor in the Court of Federal Claims. “This will conclude all contract litigation with MOX Services,” the spokesperson said.
The agency would not reveal the value of the settlement, but the Aiken Standard reported a value of $186 million.
Lawsuits have been a byproduct of the various issues at the MOX project, with the Energy Department previously alleging mismanagement and fraud by its contractor. MOX Services has consistently denied those claims, while arguing that the federal agency has withhold dollars for work that it should have received.
The agency hired MOX Services in 1999 to build and operate the MFFF. The Energy Department spent over $5 billion before terminating the unfinished project in October 2018. Prior to that, the agency attempted to shutter MOX multiple times, but Congress continued providing funding for construction.
The project was initially estimated to cost $17 billion, covering construction, operations, and facility decommissioning. Cost projections ballooned to at least $51 billion, due to design and construction mismanagement and a lack of adequate funding. The NNSA now plans to downblend the plutonium into a form safe for disposal at the Waste Isolation Pilot Plant in New Mexico.
The NNSA-MOX Services joint status report confirms they have ended their contract at Savannah River.
Following that, several, now-consolidated, lawsuits are presumable to be dismissed.
In August 2016, MOX Services sought $202.2 million in performance fees and incentive fees DOE had allegedly failed to pay. Specifically, the contractor said the agency refused to compensate for expenses the company accrued while preparing cost and schedule adjustments to the contract. Those costs should have been allowable under the U.S. Code of Federal Regulations, according to MOX Services. But the Energy Department disagreed, stating that the contractor was mischaracterizing the letter of the law.
In December 2017, MOX Services appealed an Energy Department finding that the contractor had accrued $34 million in unallowable costs that had to be paid back to the NNSA.
In January 2018, MOX Services accused DOE of wrongfully trying to recoup $507,307 in labor costs. The Energy Department said the contractor should not have received the payments because annually required labor and cost estimates submitted to the agency were incorrect. The contractor countered in its lawsuit that DOE did not set stipulations for the estimates prior to the submission.
A fourth suit filed in April 2018 alleged that DOE breached its contract by failing to pay MOX Services for costs associated with changing the scope of the work. The agency allegedly told the company to change its method for producing fuel rod assemblies, but did not fully compensate the contractor for the expense associated with the change in course.
MOX Services sought $37.2 million in a fifth complaint filed in May 2018, saying the Energy Department failed to fully compensate the company for its work, did not properly reimburse the company for subcontracts, and caused MOX Services to lose award fee dollars by changing the scope of the contract.
In another lawsuit filed that month, MOX Services appealed a DOE decision that the company had breached its contract by not submitting employee and salary records. MOX Services said the Energy Department’s request for records should be limited to the performance scope of the work, and that salary records should not be included.
MOX Services sought $572,330 in a June 2018 complaint in the Court of Federal Claims, in which the company again alleged DOE was withholding payments that should have been deemed allowable. MOX Services actually won that suit on Jan. 29 of this year, and DOE was ordered to pay $1.23 million plus another $30,200 in interest.
It is unclear if the department actually paid that money or why this suit is included in the consolidation since a judgment was handed down.
In an eighth lawsuit filed in November 2018, MOX Services sought to recover $326,681 in travel costs for an employee who was based in Massachusetts. The employee accrued the six-figure sum over a seven-year stretch, from 2009 to 2016, traveling to and from the Savannah River Site.
The final suit mentioned in the joint report was filed in February of this year. It alleges the Energy Department owed MOX Services $526,895 in accrued labor and materials costs. The department claimed those costs were unallowable because they were for rework that the agency should not have to pay, according to the complaint. Electrical rework was required at the facility after the DOE Inspector General’s Office found that the original work was not up to agency standards.
MOX Services is a subsidiary of McDermott International following its 2018 acquisition of Chicago Bridge and Iron, or CB&I. That company had purchased MOX Services’ previous parent, Shaw AREVA, in 2013. Shaw AREVA had inked a $2.6 billion deal with DOE to build the Savannah River Site facility starting in 2007 and oversee its startup.
MOX employment at the site included more than 2,000 workers at one point. That number dwindled to about 350 employees by late August, following the October 2018 termination of the project. Though the project was nixed, the MFFF still had obligations to shutter the facility before leaving the site for good.
The same NNSA spokesperson said last week that the contractor has no current responsibilities at SRS. The person further clarified that statement Thursday, adding that under the agreement, MOX Services will close out its remaining subcontracts, vendor agreements, and other obligations. Remaining activities to shutter the MOX facility will be handled by the SRS management and operation contractor, Savannah River Nuclear Solutions.
