WC Monitor
12/19/2014
WINNERS
Fluor: Fluor saw major contracting success this year, leading a team that won the Department of Energy’s new Paducah deactivation contract and being part of a team that won a new contract to manage the United Kingdom’s 10 Magnox nuclear power stations and two research reactor sites.
Huntington Ingalls Industries: HII completed this year its acquisition of S.M. Stoller Corp. (now rebranded as Stoller Newport News Nuclear)—an acquisition that may have been substantially paid for thanks to the number of contract extensions DOE has provided Stoller as the incumbent Office of Legacy Management support contractor given the time it has taken the Department to complete the still-ongoing follow-on procurement.
Hanford Waste Treatment Plant: While for years the Hanford Waste Treatment Plant has been seen as one of the DOE Office of Environmental Management’s main “problem children,” this year saw the project make significant progress on several fronts. DOE authorized project contractor Bechtel National to resume ‘full production engineering’ at the WTP’s High-Level Waste Facility after substantially resolving technical issues, allowing work to proceed to finalize the design of the facility. Bechtel National also saw a significant boost in its fee performance for its work at the vit plant in the first half of this year. The improvements could help increase confidence in DOE’s new framework for Hanford’s tank waste cleanup mission that envisions an early start to the WTP’s Low Activity Waste Facility and the production of actual vitrified waste.
MOX: Savannah River’s Mixed Oxide Fuel Fabrication Facility has managed to come back from near-death after the Administration attempted to halt construction of the plant and put the project into a “cold standby” while it searched for alternatives for plutonium disposition. The move sparked fierce opposition from South Carolina officials and lawmakers who saw the Administration’s action as an attempt to circumvent Congressional authority. Despite tight budgets across the board, the FY’15 spending bill came up with $150 million more than DOE’s MOX request and specifically directs continued construction of the plant.
Activist Shareholders: This year saw activist shareholders make significant changes in the operation of two major DOE contractors. After shareholder JANA Partners, LLC, was able to make several changes to URS’ board of directors, the company was subsequently acquired by AECOM in a deal worth approximately $6 billion. And after shareholder Starboard Value was able to add a member to Babcock and Wilcox’s Board of Directors, the company has begun moving forward with a split of its power generation business from its government and nuclear operations group—a move the company has said is intended to create greater value for shareholders.
LOSERS
WIPP/National TRU Program: For years the Waste Isolation Pilot Plant was DOE’s poster child with a clean track record and supportive public, and EM hailed progress on transuranic waste programs at sites across the weapons complex. That all changed in February, when an underground fire and radiation release shut down the repository and ground the national TRU program to a halt. Subsequent investigations found a litany of management issues at WIPP by DOE and URS-led contractor Nuclear Waste Partnership. DOE has levied a $2 million fee reduction against the contractor and New Mexico fined DOE $17.7 million for 13 violations uncovered at WIPP. DOE said restarting full-scale WIPP operations could cost up to $551 million and take until 2019.
Los Alamos National Laboratory: LANL has borne the brunt of the fallout from the WIPP radiological release after a drum processed at Los Alamos was linked to the incident. New Mexico fined DOE $36.6 million for 24 LANL violations largely related to waste processing and warned of bigger penalties on the way, DOE moved to break out Los Alamos cleanup work from University of California and Bechtel-led Los Alamos National Security’s contract, and four cleanup managers at LANL were relieved of their duties. To round out the year, in November former LANL Deputy Director Beth Sellers was suspended from doing government work after a probe found she didn’t notify officials of a potential conflict of interest regarding sole-source work awarded to her husband.
EnergySolutions: EnergySolutions this year was unsuccessful in holding onto the contract to manage the United Kingdom’s Magnox sites, resulting in a substantial loss of revenue for the company. In addition, EnergySolutions was the subcontractor to LANS at the Los Alamos National Laboratory responsible for processing transuranic waste—material linked to the radiological release that occurred at WIPP early this year that led to the shutdown of the facility.
DOE-State Relations: Relations between DOE cleanup programs and states around the complex hit a low point in 2014. New Mexico levied an historic $54 million fine related to violations at WIPP and Los Alamos. Meanwhile, DOE and Washington State headed to court over milestones in the Hanford consent decree. On the other side of the country, South Carolina officials threatened up to $150 million in fines could be coming due to delays in high level waste cleanup. Can DOE turn things around in 2015, or will it end up in a deeper hole?
Idaho Integrated Waste Treatment Unit: DOE and contractor CH2M-WG Idaho struggled this year with getting the Idaho IWTU up in operation, and as a result missed a commitment to the state of Idaho to begin waste processing by Sept. 30 and appear to be all but certain to miss a commitment to have all of the remaining liquid waste processed by the end of this year. While the facility this month reached a significant milestone in the startup process by beginning testing with waste simulant, it appears that months of additional testing is set to occur before actual waste processing can begin. And it remains to be seen when DOE will be able to complete the liquid waste processing.
Bidders on the DOE Office of Legacy Management Support Services Contract: This year could have been the year the long-running procurement came to an end, after DOE chose for a second time to award the new contract to Portage after taking corrective action in response to an earlier protest. However, DOE’s decision prompted new protests from Navarro and the team of WAI-Stoller, and with Navarro ultimately successful in its protest, DOE was forced to evaluate bids for a third time. To date it remains to be seen when DOE will make a new award decision, or whether that decision will be the final one.
ON THE FENCE
Bidders on the new ICP Core Contract: Companies interesting in bidding on DOE’s new Idaho Cleanup Project (ICP) Core contract obtained a major concession from DOE this month when the Department announced plans to drop from the contract a cost cap that would have made the successful bidder responsible for all costs going forward once the target cost for the new contract had been exceeded by $150 million. However, several provisions still remain in the draft RFP for the new contract that may give potential bidders pause, such as all fee being provisional to the end of the contract, and it remains to be seen if DOE will make further changes to the final RFP.
Celebrate 10 Years of WC Monitor’s Winners and Losers List With a Look Back:
2013
2012
2011
2010
2009 (No List Prepared)
2008
2007
2006
2005
