BWX Technologies President and CEO Rex Geveden said Tuesday the U.S. Energy Department should soon issue one multibillion-dollar contract at the Hanford Site in Washington state, while another probably won’t arrive until mid-2020.
“In the coming weeks we expect to hear about the Hanford Plateau Central Cleanup contract for which we are competing,” Geveden said during his company’s quarterly earnings call. He did not handicap BWXT’s chances.
The chief executive did not say why he expects the Central Plateau award to come months before the Hanford Tank Closure Contract, which BWXT is also pursuing. Both procurements hit the street last February, with bids due by March.
The most recent Energy Department nuclear cleanup procurement schedule, issued in May, anticipated that both awards would have been made about three months ago.
The potential 10-year, $12 billion contract for Central Plateau remediation covers demolition of Hanford’s Plutonium Finishing Plant and other high-hazard facilities, along with cleaning up plumes of underground contaminants before they reach the Columbia River. Jacobs subsidiary CH2M holds the current award, worth $6.4 billion since it began in October 2008. The vendor is working under an extension that could run through September 2020.
The other contract, potentially worth $15 billion over 10 years, would cover continued management of 56 million gallons of radioactive and chemical waste stored in 177 underground tanks. The material is one legacy of decades of plutonium production at Hanford for U.S. nuclear weapons.
Washington River Protection Solutions, a joint venture between AECOM and Atkins, holds the current award. The business has been worth $6.8 billion to WRPS since October 2008. The vendor is working under an extension good through September 2020.
Lynchburg, Va.-based BWXT also plans next year to compete for cleanup contracts at the Savannah River Site in South Carolina, the Oak Ridge Site in Tennessee, and the Idaho National Laboratory, Geveden said.
In addition, the BWXT chief thinks the Energy Department could issue a draft solicitation in late 2020 for management and operation of the Savannah River Site. Fluor-led Savannah River Nuclear Solutions (SRNS) is running SRS under a 14-month extension through September 2020. The Energy Department also can exercise two more one-year options that could keep SRNS on the job through September 2022.
A BWXT-led joint venture won a 10-year, $4.7 billion liquid waste management contract at the Savannah River Site in October 2017. But the victory was short-lived: In February 2018, the Government Accountability Office upheld a bid protest from a rival team that said DOE failed to properly vet the winner’ technical approach to waste treatment. After taking refreshed proposals from the three bidding teams, the Energy Department canceled the procurement in February 2019. BWXT remains a minority member of the incumbent liquid waste contract, AECOM-led Savannah River Remediation.
In addition, BWXT plans to compete in the next 24 months for business at the Pantex in Texas and the Y-12 National Security Site in Oak Ridge, Tenn., both currently operated under one contract held by Consolidated Nuclear Security. The CNS contract, which started in March 2014, would be worth $22 billion over 10 years if all options are exercised. Before CNS, BWXT predecessor Babcock & Wilcox operated Y-12 and Pantex.
BWX Technologies is a minority partner at several other DOE facilities, including the operator of the Waste Isolation Pilot Plant in New Mexico and on the cleanup team for the Portsmouth Site in Ohio.
BWXT Hits Record Quarterly Revenue
BWX Technologies on Monday reported a company record for quarterly revenue – $506 million for the three-month period that ended Sept.30, an 18.9% jump from $426 million a year ago.
The company reported $74.8 million in net income, or $0.78 per diluted share, compared with $77.9 million, or $0.78 per diluted share, in the prior-year period, according to a Monday earnings press release.
“All three segments delivered solid operating performance in the quarter resulting in record consolidated revenues,” Geveden said in the release.
BWXT’s Nuclear Operations Group (NOG), which manufactures naval nuclear reactors and other equipment, also set a quarterly record with revenue of $394.5 million, up 23.5% from the same period of 2018. The company attributed the spike to a favorable contract adjustment originally expected in the fourth quarter, along with resolution of past problems with welding on submarine missile tubes.
The Nuclear Power Group (NPG), which provides engineering, construction, parts, and repairs for nuclear power plants, recorded $84.4 million in revenue, a 6.6% increase from the third quarter of 2018. That was largely due to increases in component refurbishment projects in Canada. Operating income under generally accepted accounting principles was $9 million in the third quarter, down 1% from a year earlier.
The Nuclear Services Group (NSG) segment, which serves the Energy Department weapons complex, reported operating income of $5.5 million for the third quarter, down from $6.5 million in the prior-year period. Improved operating performance was more than offset by contract completions and the rising cost of government bid proposals.
The company increased its 2019 earnings guidance from $2.50 to $2.55 per share.
