Nuclear Security & Deterrence Monitor Vol. 26 No. 20
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Nuclear Security & Deterrence Monitor
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May 19, 2022

NNSA kills controversial award to manage main weapons production sites; plans multiyear extension for incumbent

By Dan Leone

In a blow to Fluor and Amentum, the National Nuclear Security Administration this week canceled a potentially 10-year, $28-billion contract for a joint venture of the two companies to manage the agency’s main nuclear-weapon production sites.

At the same time, the semiautonomous Department of Energy nuclear weapons agency announced it would extend the Bechtel-led incumbent at the sites, Consolidated Nuclear Security (CNS) for at least another two years at both sites, with an option for a third year, plus a pair of one-year options beyond that to keep managing Y-12 alone.

Its a landscape-altering reversal for industry after Novembers award, to the Fluor-led Nuclear Production One joint venture, of a combined Pantex/Y-12 contract that could have run a decade, with options. But losing bidders quickly protested the award, citing a conflict of interest involving — as reported first by the Exchange Monitor a former NNSA employee who joined a subcontractor of the Fluor team.

Finally this week, after an internal review that lasted all winter and spring, NNSA announced Monday in a press release that “cancellation of the solicitation and termination of the resulting award is appropriate to safeguard the integrity of the procurement process.”

The internal review followed protests by the losing bidders with the Government Accountability Office in December. One losing team was led by Bechtel, another by BWX Technologies.

Along with killing the award to Nuclear Production One, the NNSA announced that it will no longer allow one contractor to manage both the Pantex Plant in Amarillo, Texas, the main nuclear-weapons service center, and the Y-12 National Security Complex in Oak Ridge, Tenn., where the agency processes uranium for nuclear-weapon secondary stages.

Instead, as they were before the 2010 experiment to combine their operations to trim administrative costs, Pantex and Y-12 will again be managed under separate contracts for which the agency will solicit bids at some indeterminate point in the future, according to Monday’s press release.

As part of the process, NNSA will create separate federal field offices for Pantex and Y-12, which today are overseen by civil servants in the combined NNSA Production Office.

The NNSA, through a spokesperson, declined to share the final decision documents authorizing the cancellation of the award, citing procurement sensitive information contained within these document.

“We are committed to providing as much stability and transparency as possible as we do the hard work to put in place the contract structure we need for the workload ahead,” Jill Hruby, the administrator of the National Nuclear Security Administration wrote in an email to all hands the day the agency made its decision public.

Meanwhile, incumbent CNS will now receive its third extension at the sites since the contentious competition to replace the company began in 2020. When NNSA decided to boot CNS out of Pantex and Y-12 , citing failings in criticality safety and cyber security, among other things, the agency thought the incumbent would be gone by Sept. 30, 2021.

With the new extensions and options, CNS may wind up better for having been cancelled than it would have if the NNSA picked up all the options on the company’s contract in 2020. Those options could have kept CNS on site into fiscal year 2024, and the venture will do at least that well now, under the terms of the extension the NNSA posted online Tuesday.

CNS got its contract in 2012 but did not begin work at until 2014, thanks to a protest by the company now called BWX Technologies, which managed Pantex and Y-12 under separate contracts prior to the sites’ consolidation under CNS.

“Today, NNSA informed CNS it was canceling the contract competition and is taking steps to extend CNS’s contract,” a spokesperson for the incumbent wrote Monday in an emailed statement. “With the scope and importance of our work increasing, this will provide much-needed stability and allow us to remain focused on our most important task: delivering our vital national security mission for the nation.”

“Fluor is disappointed in the decision to cancel the previous award, but the company continues to see significant opportunities for new awards and growth across its market segments in 2022,” the company wrote in a statement posted online Tuesday. However, the NNSA’s “shift in strategy related to the combined management and operation of the Pantex Plant and Y-12 National Security Complex has not changed Fluor’s support for the NNSA. The company remains committed to the nation’s nuclear security through its existing and future contract work.”

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