Bechtel National this week pushed back against a Department of Energy Office of Inspector General audit report that questioned the reliability of the contractor’s cost estimates for the Waste Treatment and Immobilization Plant at the Hanford Site in Washington state.
“We believe that the report overlooks relevant factual data that is essential for consideration prior to forming conclusions,” a Bechtel spokesperson said in a statement emailed to Exchange Monitor. “We stand by the quality of our work products and respect the oversight responsibilities of the [Office of Inspector General] and our DOE customer.
“We remain transparent and will continue to strive to exceed expectations,” Bechtel said.
In September 2020, Bechtel and an Amentum predecessor admitted no wrongdoing but paid a nearly $58 million penalty to resolve claims they overbilled DOE for work at Hanford. In last week’s report the Inspector General (IG) expressed continuing concerns over the reliability of cost for the multi-billion-dollar plant to solidify radioactive tank waste in a glass-like substance.
The audit report by DOE’s Office of Inspector General analyzed how Bechtel calculated an updated cost baseline proposal for the Waste Treatment and Immobilization Plant and found the company’s estimate lacking.
After a year-long audit, concluded in May 2022, the IG was still not sold on the reliability of the data Bechtel used to estimate costs at the plant. According to the 32-page report, the IG suspects the company’s key labor cost projections could be off by anywhere from 3% to 47%.
“We identified several weaknesses related to Bechtel’s labor hour estimates,” the IG said. The labor-hour estimates account for approximately $1.8 billion of the total proposed $4.5 billion project costs evaluated.
The increased hours and costs occurred because DOE “did not ensure Bechtel’s methods were consistent with industry standards or best practices,” IG said in the report.
Bechtel’s plant construction contract, currently valued at $15.5 billion, started in December 2000 and is scheduled to run through December 2024. DOE and Bechtel plan to start up Direct-Feed-Low-Activity-Waste solidification in 2025.
In comments appended to the IG’s report, a DOE official said the agency “does not endorse the report’s conclusions” that Bechtel’s labor cost projections improperly benefitted the contractor or disadvantaged the taxpayer. DOE, however, “recognizes the IG recommendations and has largely addressed the recommendations,” read the comments by Robert Irwin, a manager with the agency’s Office of River Protection at Hanford
The IG made eight recommendations designed to improve Bechtel cost estimates. DOE concurred with three, disagreed with four and partially concurred with one.
