Parsons has asked Energy Department officials to retract a notice of concern that claimed significant mismanagement in the company’s work to start up the multibillion-dollar Salt Waste Processing Facility (SWPF) at the Savannah River Site in South Carolina.
In an April 6 letter obtained by Weapons Complex Monitor, Parsons SWPF project manager Frank Sheppard said the March 7 notice of concern was “inappropriate” because the company is well within the timelines and costs established in the contract with the department.
In fact, many of the issues DOE addressed in its notice stem from the department deviating from the contract, Sheppard wrote in the letter addressed to Pamela Marks, the federal project director for the facility, and Samuel Stewart, a contracting officer with DOE’s Savannah River Operations Office.
Sheppard said the Energy Department made “broad, negative assertions” about the state of affairs at the facility, including the department’s stance that it might take three extra months for SWPF to reach Critical Decision 4 (CD-4), the phase in which operations can begin. But, according to Sheppard, Parsons is on pace to meet its contractual date to begin operations — even if that’s not the December 2018 date that has been advertised.
Parsons holds a $2 billion DOE contract awarded in 2002 to design and build the Salt Waste Processing Facility, and to operate it for one year. The deal is set to expire on Sept. 30, 2020. The facility will treat the site’s salt waste, a byproduct of Cold War nuclear weapons operations, for disposal.
Construction was completed in June 2016 at a cost of $2.3 billion. At that time, the Energy Department declared the December 2018 startup date, which was expected to allow enough time for testing and commissioning.
In the March notice, Marks and Steward wrote that Parsons underperformed in various areas, including employee management, following safety protocols, and taking corrective actions in a timely manner. These and other issues have invalidated the current project baseline and have pushed the SWPF startup projection back to March 2019, according to the DOE officials.
Despite these issues, Sheppard was told Parsons should still try to meet the December deadline. The company was supposed by April 7 to submit a “return to green” recovery plan that includes a current baseline and explains how it would be achieved.
Neither Parsons nor DOE will provide the original baseline, or details of the new document.
The April 6 response letter is not a “return to green” plan, but rather a “plan of action to optimize project delivery schedule,” Sheppard wrote. He chose that wording because submitting a return to green plan would be “inconsistent with our actual schedule compliance and we will instead use the more appropriate term.”
Before delving into how the contractor would optimize the schedule, Sheppard first addressed issues with the notice of concern. He wrote that, under the contract, Parsons is supposed to complete testing and commissioning and have the facility ready for DOE operational readiness review (ORR) by March 31, 2019. That corresponds to a June 1, 2019, start of operations, according to Sheppard. “Parsons considers it inappropriate and inconsistent with the principles of good-faith partnering to receive a letter of concern incorrectly asserting that Parsons is not performing in accordance with the contract schedule terms when the dates cited remain within the contract target date for schedule fee incentives,” Sheppard wrote.
He added that the December target date was a “best case scenario that does not account for any of the risks associated with an SWPF first-of-a-kind nuclear facility start-up.” Once risks are factored in, SPWF startup could come as late January 2021, according to the contract.
Sheppard also challenged other aspects of the notice of concern. While the DOE notice says the forecast schedule has changed due to the contractor’s actions, Sheppard wrote that DOE significantly contributed to schedule changes by taking actions that were inconsistent with the contract. For example, the department limited the amount of work Parsons could perform while implementing its corrective action plan for hazardous energy control. Then, the agency’s review of the plan took longer than the 30-day allotment.
Sheppard acknowledged there are issues at SWPF, such as the need to replace a positioner that helps control valves at the facility. But when it comes to the long list of issues detailed in the notice, “DOE assertions are generally incorrect and mischaracterize the overall project performance,” he wrote.
In regards to the “plan of action to optimize project delivery schedule,” Sheppard outlined a few things the contractor is doing. For example, Parsons is performing SWPF testing simultaneously with other duties to reduce the amount of time it will take to start up the facility. Also, management has directed a local senior manager to oversee schedule performance and work integration.
Near the close of the letter, Sheppard wrote that Parsons on March 27 delivered a “credible and realistic plan” to achieve SWPF operations. In the letter, details of the schedule are limited. It simply states that Parsons has hired a scheduler and a cost engineer to help stay on track with the baseline.
The Energy Department this week said only that it is working with Parsons to resolve performance issues and other “concerns” that are an internal matter.