Bechtel National (BNI) has been placed under new federal restrictions on issuing subcontracts and making large purchases following a routine audit of its purchasing systems by the Pentagon’s Defense Contract Management Agency.
The business is the U.S. government-focused branch of global engineering and project management provider Bechtel. Among its current work is construction of the Waste Treatment Plant at the Hanford Site in Washington state, which will convert millions of gallons of radioactive waste into a glass form for disposal.
On July 20, Bechtel issued an internal “Procurement & Subcontracts Compliance Bulletin” with the subject head “Disapproval of BNI Purchasing System” for its employees at the Waste Treatment Plant. The bulletin said that without an approved purchasing system, Bechtel National must obtain consent from the Department of Energy Office of River Protection contracting officer for key purchases at Hanford. Those include fixed-price agreements valued at $150,000 or more and all flexibly priced agreements, such as those in which expenses are reimbursed based on labor hours or costs. “We will continue this practice as long as the BNI purchasing system remains disapproved,” DOE said in a statement.
“An audit this past February identified concerns with procedures for documenting purchases from subcontractors and notifying the government in a timely way, among others,” said Bechtel spokesman Fred deSousa. “We completed the requested updates to our procedures in April, but there has been a delay in accumulating enough sample data to validate the changes to the government’s satisfaction.”
Bechtel National continues to add documentation to purchases and is working with the government to resolve validation concerns, deSousa said.
The audit covering Bechtel National procurement at multiple locations across the nation found some of the checked subcontracts did not have required documentation, including paperwork verifying that the subcontractor had not been suspended or debarred from performing federal work. Some records lacked sufficient specificity, and Bechtel National in some cases did not follow its policy of giving the federal field office overseeing the project 24-hour notice of a subcontract award.
The Pentagon audit covered all Bechtel National government subcontracting, including subcontracting at chemical weapons destruction sites in Colorado and Kentucky. The company’s work at the Waste Treatment Plant appears to be the only DOE project affected by the disapproval of BNI purchasing systems, however.
Consolidated Nuclear Security – the management contractor for DOE’s Y-12 National Security Complex in Oak Ridge, Tenn., and the Pantex Plant in Amarillo, Texas — is led by Bechtel but does not use a Bechtel purchasing system. Bechtel National also holds a subcontract under Consolidated Nuclear Security for construction of the Uranium Processing Facility on the Y-12 grounds but has received no direction on restrictions to its subcontracting requirements there.
“We anticipate no detrimental impacts to ongoing work at the Waste Treatment Plant or any other project,” deSousa said.
The nearly $17 billion Waste Treatment Plant will process a large portion of the 56 million gallons of radioactive waste held in underground tanks at Hanford, a byproduct of the site’s history of plutonium production. Under federal court order, DOE has until 2023 to begin treating low-activity waste and must have the plant fully operational by 2036.
