Contractor Hits New Low in Fee
Mike Nartker
WC Monitor
3/21/2014
Bechtel National is moving forward with a management reorganization at the Hanford Waste Treatment Plant that the contractor said late this week is intended to help make “needed performance improvements” and “clarify roles, responsibilities and interfaces” between Bechtel National and its major subcontractor on the project, URS. The new approach will have Bechtel National and URS each “responsible to manage its own assigned scope with its own responsible managers,” with Bechtel National to directly manage a number of functions, including environmental, fire safety, radiological safety, criticality safety and nuclear safety, according to a message BNI Project Director Peggy McCullough sent to employees. URS will continue to manage commissioning, operations and readiness, and will directly manage operations training and procedures, full-scale testing, URS Human Resources and URS Business Services, with Mark Lindholm to become Manager of Commissioning & Operations, according to McCullough’s message. Lindholm previously held the title of Manager of Nuclear Safety, Commissioning & Operations.
The reorganization also entails the creation of two new organizations responsible for safety. One will be led by Dick Nugent who will hold the new position of Manager of Environment, Safety and Health. “The consolidated ES&H function will be responsible for all aspects of environmental, safety and health management, as well as construction site radiological controls and fire protection program implementation,” McCullough said. Nuclear safety and criticality functions will be “consolidated and restructured” in the new Nuclear Safety Engineering organization, according to McCullough, with R.T. Brock to hold the new position of Manager of Nuclear Safety Engineering. “Project nuclear safety and criticality safety personnel will functionally report to R.T. and will be deployed as appropriate to the integrated project teams and facility management. This will be responsive to the concerns expressed by the DOE and others regarding better integration and coordination of nuclear safety and design engineering,” McCullough said, adding, “R.T. has more than 25 years of experience in the management and operation of nuclear facilities in the DOE complex and has served in a variety of senior management positions within DOE, NNSA and the contractor community.”
WC Monitor first reported last month that Bechtel National was considering reorganizing management at the Hanford vit plant with an eye toward reshaping the Environment and Nuclear Safety organization (WC Monitor, Vol. 25 No. 6). That organization was headed by Donna Busche, who held the key personnel position of E&NS manager, until she was terminated by URS last month. Busche has alleged she faced harassment and retaliation for raising safety concerns—allegations both Bechtel National and URS have denied. During a Senate subcommittee hearing last week, James Taylor, General Manager of URS’ Global Management and Operations Services unit, said Busche was terminated for “cause” due to her behavior. “It was brought to my attention through our employee concerns program where we had employees that filed complaints against Ms. Busche’s conduct and behavior. We investigated those. We validated those concerns,” Taylor said. Bechtel National has said it had no role in Busche’s termination.
Bechtel Earns 48 Percent of Available Fee
Meanwhile, Bechtel National earned only 48 percent of the fee available for the second half of 2013 for its work on the WTP, according to information the Department of Energy released this week. In total, Bechtel National earned $3.025 million out of an available $6.3 million in award fee, according to a DOE award fee scorecard. Bechtel National’s previous low mark for fee performance was 49.6 percent, which the contractor earned for its work in the first half of 2013 and the first half of 2012. Bechtel National agreed to forego all fee for the second half of 2012.
In a March 11 letter to McCullough, ORP Manager Kevin Smith wrote, “BNI’s continued improvement in transparency and customer service orientation was very pronounced during the end of the performance period. With continued emphasis on these, BNI should continue to improve performance during the next evaluation period.” In a message to employees, McCullough said, “Over the next several weeks, we will be seeking increased understanding of the details underpinning our areas for improvement to ensure that we learn and act upon these areas to continue to increase our customer’s satisfaction. With their encouragement regarding the improvements we are making in several key areas and feedback on areas for improvement, WTP is well positioned for future success and even better performance evaluations.” Bechtel National declined to provide additional comment beyond McCullough’s message.
Majority of Fee Tied to Ability to Self-Identify Issues
The bulk of the fee Bechtel National was eligible to receive for the second half of 2013—$3.5 million—was tied to the contractor’s ability to self-identify and address issues in a new management approach Smith put into place last year upon taking over as head of ORP (WC Monitor, Vol. 24 No. 28). Of that $3.5 million, Bechtel National earned $1.715 million, according to DOE’s scorecard. Among the “key positives” listed in the scorecard was Bechtel National’s “significant improvement in transparency” and improvement in self-identification of issues. DOE also noted, though, in its “areas for improvement” that Bechtel National had struggled with “internal metrics/evaluation on quality of self assessments to understand effectiveness” and that “many” of the contractor’s corrective action plans “required significant rework to be fully comprehensive.”
In his letter, Smith noted, “For this period, BNI was rated rigorously against its ability to be transparent and to self identify issues and implement the necessary corrective actions. It is also important to note this is the first award fee determination I have made using the new criteria, and it reflects a high-level of rigor in the assessment.”
At this year’s Waste Management conference, both Smith and McCullough praised the results of the new management approach, with Smith saying he planned to continue to tie about half of the fee Bechtel National can earn to its ability to self-identify issues for the first six months of this year. “If I have a facility rep … out and they find something the same time their BNI colleague does, it is an arm wrestling match for the BNI person to report it because they want the credit,” Smith said. McCullough said that “the fact that DOE has included that in the award fee criteria let me turn around and say to the employees that this is important to the customer, and they’re going to work hard to respond appropriately to in-process information recognizing that we haven’t concluded yet and we’re working the issues. Honestly, I think our employees have seen it. They’ve seen the difference in the way ORP is responding. That’s an important part to the reinforcement to the employee population.”
Low Scores for Quality Assurance, Project Leadership
Also in its latest fee determination, Bechtel National earned low ratings in the areas of quality assurance, which has long been an issue of concern; and project leadership/management. For quality assurance, Bechtel National earned only 35 percent of the fee available—$280,000 out of an available $800,000—with DOE citing as an area of improvement, “initial phases of defining and implementing key improvements in quality assurance and corrective action programs.” DOE did note as a key positive, though, Bechtel National’s management changing focus “to provide direct attention to quality assurance program/independent audits.”
For project leadership/management, Bechtel National only earned 28 percent of the fee available—$280,000 out of $1 million. DOE praised Bechtel National for having “successfully mitigated Continuing Resolution and finding new vendors,” as well as for making changes to “baseline processes and procedures to ensure better alignment with contract requirements.” As areas of improvement, though, DOE cited the fact that Bechtel National was “behind in key project deliverables to support high-level waste facility issue resolution”; “insufficient progress” made in developing plans to resolve technical issues in several systems; and the contractor “not effectively mitigating schedule impacts,” among others.
In a written response late this week, ORP spokeswoman Lori Gamache said, “As BNI’s customer, DOE-ORP places strict demands for performance and correlates those demands to its grading determination. Since the rating period from July 1–December 31, 2013, BNI has made progress in providing key project deliverables, which supports the resumption of limited production engineering on HLW [the High-Level Waste Facility] and a planned conditional authorization to proceed with engineering, procurement and construction activities this summer.” She also said, “The schedule for some project activities has slipped. Some risks were realized which resulted in some cost and schedule impacts to the project. BNI is continuing to work on resolving these issues, and the Department will continue to ensure resolution as part of resuming full production engineering on HLW.”
WTP Safety Performance ‘Best in Project History’
Bechtel National did the best in the category of environmental/safety/health, for which it earned 75 percent of the fee available—$750,000 out of $1 million. DOE noted several key positives in this area, including Bechtel’s efforts to improve the nuclear safety culture at the WTP; completion of design basis accident documents and the fact that the WTP received DOE Voluntary Protection Program ‘Star’ recertification safety award. “Project and construction site safety performance is the best in project history,” DOE’s scorecard states.
