Kenneth Fletcher
WC Monitor
3/27/2015
As the Department of Energy’s Office of Environmental Management moves away from the use of management & operating contracts, the head of DOE’s Savannah River Operations Office said last week that he is “a fan” of how the site’s M&O contract has performed during budget uncertainties. There are only two M&O contracts left in EM—the SRS M&O held by Savannah River Nuclear Solutions and the Waste Isolation Pilot Plant contract held by Nuclear Waste Partnership. “I’m a fan of the M&O contract, especially in our current budget cycles where we’ve been decades without a firm budget at the start of the fiscal year,” DOE-SR Manager Dave Moody said last week at the Waste Management conference in Phoenix. “When you don’t know what your budget is going to be until halfway through the fiscal year, the M&O construct gives you the greatest ability to modify the deliverables of what your expectations are from your contractor and negotiate those real time without really having to enter into equitable adjustments and other kinds of contract modifications.”
The SRNS contract covers nuclear materials work at H-Canyon, as well as the tritium facilities, transuranic waste cleanup, some of the environmental remediation work and a host of other site support activities. Currently Fluor-led SRNS is operating under a contract extension that ends in September 2016. The site’s liquid waste cleanup operations are conducted by AECOM-led Savannah River Remediation, whose option periods expire in early 2017.
In general, EM is moving away from the use of M&O contracts, EM Deputy Assistant Secretary for Acquisition and Project Management Jack Surash said at the Waste Management conference. “I think that what I would call ‘traditional contracts’ are much more rigorous, a much harder complex tool for us as feds to use. But I believe what we’re getting is worth it,” he said. “I think we’re seeing increased performance. Don’t get me wrong—I’m not trying to say anything bad about M&Os. But I just think that with where the program is at, I would see us continuing on that journey.”
AECOM’s Taylor: DOE Should ‘Absolutely’ Consider Dropping SRS M&O
James Taylor, general manager of AECOM Nuclear & Environment, said last week that DOE should “absolutely” consider moving away from an M&O contract at Savannah River. “M&Os, we promise the world. It’s whoever can build the best dream, and once you get in there, it’s an M&O, so they can change the scope, they can have your focus switch from what it is to over here, so you’re never, at the end of the day, required to deliver what you promised just because of the structure of an M&O,” Taylor told WC Monitor on the sidelines of the Waste Management conference. He added: “To me, if you want to get work done, you’ve got to tell them what you want done, get it down in writing and hold them accountable to it, and that’ll give you the highest probability of accomplishment.”
Target cost contracts have been “hugely successful” at cleanup projects at the River Corridor, Idaho and Mound, Taylor said in remarks at the conference. The performance-based cost-plus-incentive fee contracts have also worked very well to save money and drive down costs, Taylor said. If the tritium work moved over to the Y-12/Pantex contract, SRS could use a cost-plus-award fee type for the rest of SRS cleanup, he added.
SRNS’s Johnson: Savannah River Requires Different Contracting Model than Cleanup Project
However, SRNS President Carol Johnson, who previously headed the River Corridor cleanup project at Hanford, argued that Savannah River should be kept as an M&O contract. “River Corridor cleanup was a very defined scope with defined end points. It was much clearer—we were cleaning up and we were going to be done with the River Corridor,” Johnson said. “The work we do in the Savannah River nuclear materials space doesn’t have necessarily a clearly defined end state. There are missions for the long term, and in some cases we don’t really know what they are. So it requires a different kind of contracting model than a traditional environmental cleanup project.”
