Half of Bechtel National’s Fee Tied To Self-Identifying Issues
Mike Nartker
WC Monitor
3/07/2014
PHOENIX, Ariz.—A new approach to how Bechtel National can earn fee at the Hanford Waste Treatment Plant that seeks to encourage the contractor to do more to identify issues and concerns is paying dividends, Department of Energy and contractor officials said here this week. DOE could as early as this week issue Bechtel National its fee determination for the second half of 2012, during which 50 percent of the contractor’s fee was tied to BNI’s ability to self-identify issues before they were discovered by the Department. “It has had every bit of the effect that we intended it to have,” said Kevin Smith, head of the DOE Office of River Protection, at this year’s Waste Management Symposia. “If I have a facility rep … out and they find something the same time their BNI colleague does, it is an arm wrestling match for the BNI person to report it because they want the credit,” Smith said. DOE plans to continue the approach of tying 50 percent of Bechtel National’s fee to its ability to self-identify issues for the first half of this year, Smith told WC Monitor on the sidelines of the meeting.
For the second half of 2012, Bechtel National can earn a total of $6.3 million in fee, of which $5.3 million is tied to project management performance and $1 million is tied to cost performance. Of Bechtel National’s total fee, $3.5 million is tied to an “award fee objective” of “critical self analysis/assessments/discovery/action,” according to DOE’s performance management plan. The objective’s criteria includes “effective self identification” of performance issues in time to implement effective corrective actions; “comprehensive and effective extent of condition reviews”; and “critical self analysis leading to action and learning,” the plan states.
Bechtel National Project Director Peggy McCullough also praised the results of the new approach to fee and its emphasis on self-discovery of issues “It’s been very helpful to me personally to reinforce that in the organization because a key part of transparency … is you don’t want overreaction to something that’s not yet decided, completed or solved. So in order to be transparent with your customer, what you don’t want is when you come forward and say, ‘Hey we have found an issue,’ if you get an overreaction, human tendency is you don’t want to bring it forward next time,” McCullough told WC Monitor on the sidelines of the meeting. “So the fact that DOE has included that in the award fee criteria let me turn around and say to the employees that this is important to the customer, and they’re going to work hard to respond appropriately to in-process information recognizing that we haven’t concluded yet and we’re working the issues. Honestly, I think our employees have seen it. They’ve seen the difference in the way ORP is responding. That’s an important part to the reinforcement to the employee population.”
Bechtel National Working to Address Quality Issues
In her remarks at this week’s meeting, McCullough outlined a number of steps Bechtel National is taking to address long-standing quality assurance concerns at the WTP (WC Monitor, Vol. 25 No. 6). Such actions have included changing how corrective actions are performed after Bechtel National learned that previous corrective actions did not go through “the same planning process” now used at the vit plant, McCullough said. “The ability to estimate and resource the work to accomplish the corrective action didn’t go through our project controls tools. So over the course of years, what this resulted in was a waning in the final stages of completing those actions,” she said. “So we’re completely revamping the way we approach corrective action in terms of being very deliberate in making the decision in what to undertake, what’s reasonable, what’s effective and then making sure that it’s adequately estimated, scheduled and put into the baseline so the progress can be tracked to completion.”
Bechtel National is also working to improve accountability for corrective actions by shifting responsibility to line organizations instead of functions, McCullough said. “The importance of that can’t be understated because the understanding of how critical an issue is, how urgent it is relative to a plant that’s 60 percent completed in the field, has to be made by the individuals that control the budgets, the priorities and the resources on a daily basis,” she said.