Contract Initially Valued at Approx. $67 Million
Mike Nartker
WC Monitor
2/20/2015
The total cost to complete D&D activities at the Separations Process Research Unit (SPRU) site could approach $400 million, project contractor AECOM reported last week. To date, the contractor has incurred a total project cost of approximately $300 million, and “due to significant delays and uncertainties about responsibilities for the scope of remaining work, final costs necessary to complete this project may exceed $100 million,” AECOM said in its first quarter 2015 financial results.
The SPRU D&D project entails the removal of two buildings used in the 1950s to research chemical processes for separating plutonium and uranium from irradiated materials. In 2007, the Department of Energy awarded URS (since acquired by AECOM) a four-year contract worth approximately $67 million for the project, which was to have been completed by the end of 2011. In the fall of 2010, though, a set of contamination incidents occurred during open-air demolition activities at one of the two SPRU buildings that resulted in the spread of low levels of contamination to the broader Knolls Atomic Power Laboratory, where SPRU is located, as well as to a local river. The contamination incidents helped to stall work at SPRU for approximately two years, and led to changes in how D&D would be performed at the site, chiefly through the addition of enclosures constructed around the buildings with ventilation systems. DOE now expects the SPRU D&D project to be completed by September 2018.
Responsibility for Final Costs Still to be Determined
Also in response to the 2010 contamination incidents, DOE subsequently moved to modify its contract with URS to set up a cost-sharing approach for completing work. That approach entails DOE being responsible for all project costs up to $105 million; DOE and URS splitting all costs incurred from $105-145 million; and URS being fully responsible for covering all costs exceeding $145 million. Since the contract modification was finalized, though, URS has been pushing back against being held responsible for significant portions of the costs to date incurred at SPRU, which have included, among other issues, addressing the impacts of bad weather at the site.
In December 2014, AECOM submitted claims against DOE “seeking recovery of $103 million, including additional fees on changed work scope,” the contractor’s latest earnings report states, adding that it “can provide no certainty that it will recover the DOE claims and fees submitted in December 2014, as well as any other project costs after December 2014 that WGI Ohio is obligated to incur including the remaining project completion costs, which could have a material adverse effect on the Company’s results of operations.” Last month, AECOM withdrew previous claims submitted for costs at the SPRU D&D project, leaving only those submitted in December 2014 before DOE.
AECOM ‘Continuing to Make Steady Progress’
DOE and AECOM each largely declined to comment late this week on the current state of negotiations on a final cost-and-schedule baseline for the SPRU D&D project. However, both stressed that work is moving forward at the site. “AECOM is working safely and continuing to make steady progress at SPRU,” DOE Office of Environmental Management spokeswoman Candice Trummell said in a written response.
Outlining the current status of the project, AECOM spokesman Keith Wood said in a written response, “In building H-2, 90 [percent] of the building characterization is complete, contaminated piping removal in Cells 1, 2, 3 and 5 was completed and the tank vault planks and piping were removed in two vaults.” Wood also said, “In building G2, 98 [percent] of the building is characterized and we have completed piping removal in cells 2, 3 and 4. Phase I work which includes shielding installation and piping removal is complete and work continues in cell 5 for venting, draining, and pipe removal. Work continues on sectioning, lowering and waste packaging of the remaining pipe run in the G2 tunnel.”
