Salt Waste Processing Facility contractor Parsons and subcontractor EnergySolutions are locked in a dispute over Parsons’ decision to reverse course and return $20 million in provision fee to the Department of Energy, with EnergySolutions telling Parsons last week that it will not return its $6 million share of the fee, WC Monitor has learned. In response, Parsons has raised the possibility of issuing EnergySolutions a ‘stop work’ order on the project. Both Parsons and EnergySolutions declined to comment yesterday.
Last month, Parsons decided to no longer fight the Department’s request for the return of approximately $20 million in provisional fee due to cost overruns on the project. Primarily as a result of the delay in the delivery of a set of 10 vessels for the facility, Parsons developed and submitted last spring a revised estimate-at-completion for the project that increased its estimated cost by more than $400 million, to approximately $1.7 billion. Soon after the revised estimate was submitted, DOE requested the return of the approximately $20 million in provisional fee on the basis that Parsons was set to exceed the cost cap in its contract. Parsons initially rejected DOE’s request on a number of grounds, including that its contract does not require provisional fee to be returned over cost issues. However, the company last month reversed course, with SWPF Project Manager Lou Jackson stating: “Parsons is working cooperatively with the Department on arrangements for the repayment of provisional fee earned during Phase II of the SWPF project. We recognize the near term budget challenges of the Department and are taking this step to provide additional funds to the project to continue progress on the construction of SWPF.”