Morning Briefing - May 06, 2019
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May 06, 2019

MOX Services Sues for $53M Over Savannah River MOX Plant Fees

By ExchangeMonitor

The Department of Energy’s contractor for the now-terminated plutonium recycling facility at the Savannah River Site in South Carolina is suing to recoup what it says is nearly $53 million the federal government failed to pay for its work.

CB&I AREVA MOX Services said in its May 2 lawsuit that the Energy Department’s semiautonomous National Nuclear Security Administration (NNSA) “forced” the contractor to take a financial loss while constructing the Mixed Oxide Fuel Fabrication Facility (MFFF). The company is seeking the money in the U.S. Court of Federal Claims (CFC).

MOX Services said that from 2016 to 2018 it accrued $530 million in “hotel load” costs,” management and administrative expenses not directly related to construction. “While NNSA reimbursed most of MOX Services’ incurred costs under the cost reimbursement contract at issue, NNSA refused to modify the contract in a way that enabled MOX Services to earn fee for its work,” MOX Services’ attorneys wrote in the complaint. “In FY16 – FY18, MOX Services performed approximately $530 million in out-of-scope work, the costs of which DOE characterized as hotel load, and was paid no fee on this work.”

MOX Services said it is entitled to 10 percent of the $530 million, or $53 million, under federal laws that cover cost reimbursements in government contracts. The contractor attempted to recoup the dollars in two claims: a $35 million claim for costs accrued in fiscal 2016 and 2017, and a $17.9 million claim filed in fiscal 2018.

The NNSA denied the first claim on Jan. 31 of this year. The agency is still reviewing the second claim, but MOX Services said it expects that will also be denied. “Over these three fiscal years, NNSA effectively forced MOX Services to perform tremendous amounts of out-of-scope work that incurred hotel load costs at a guaranteed loss,” the complaint says.

MOX Services is also seeking interest. It is unclear how much interest and how it will be determined.