While BWX Technologies lost out on a multibillion-dollar remediation contract at the Hanford Site in Washington state, President and CEO Rex Geveden said Tuesday he is optimistic about a “robust” pipeline of potential Energy Department projects.
“Unfortunately, we were not awarded the Hanford Central Plateau Cleanup contract,” Geveden said during the Lynchburg, Va.-based company’s quarterly earnings call with financial analysts.
The Energy Department in December awarded the potential 10-year, $10 billion remediation contract to a corporate team led by AECOM’s Management Services division, which subsequently became the separate company Amentum. The other members of the joint venture are Fluor and Atkins.
Geveden did not reveal any names of other members of BWXT’s unsuccessful Central Plateau bidding team, nor did a company spokesman after the call.
BWXT still hopes to land an upcoming contract to manage 56 million gallons of radioactive tank waste at Hanford, a former production complex for plutonium used in the U.S. nuclear arsenal. The DOE Office of Environmental Management could issue the multibillion-dollar contract this spring, with work starting three months later, Geveden said.
But he siad that award will likely be slowed by protests filed against both the Central Plateau award and the potential 10-year, $4 billion Hanford support services contract issued in December to a Leidos-led team. The general consensus across the weapons complex is the protests against the two major contracts will gum up the DOE procurement pipeline.
BWXT is not a party to either protest, the company confirmed Friday.
The Central Plateau contract is protested by a Bechtel-led group that does not include BWXT. A Huntington-Ingalls-led group protesting the services contract, DOE discouraged contractors from seeking both due to potential conflicts of interest.
The company received good news Feb. 21 when the Energy Department announced plans to keep the incumbent Fluor-BWXT team on for up to two years beyond March 2021 as the decommissioning vendor at the Portsmouth Site in Ohio.
BWXT is also likely to be in the hunt for the potential 10-to-15-year, $21 billion Savannah River Integrated Mission contract in South Carolina, Geveden said. The Energy Department is accepting comments on a contract that includes management and disposition of 35 million gallons of Cold War-era liquid radioactive and chemical waste at SRS, as well as some other nuclear materials operations. Geveden said he expects the contract will be awarded by the end of the year.
While BWXT is a member of the Amentum-led waste management incumbent, Savannah River Remediation, it headed its own team that actually won a $10-year, $4.7 billion waste management award in October 2017. But following a successful protest by a rival and refreshed bids by applicants, the Energy Department canceled that procurement a year ago.
Other DOE contracts that BWXT could pursue include the Idaho National Laboratory cleanup program and the Savannah River Site management and operation contract, both of which could be awarded in 2021, Geveden said.
BWXT Enjoyed Strong 2019
BWX Technologies took in $501 million of revenue during the fourth quarter of 2019, a 5% uptick over $478 million a year earlier.
In addition, the company reported late Monday that revenue of nearly $1.9 billion for the 12 months ended Dec. 31 set a new record and represented a 5% increase from $1.8 billion during 2018.
Those numbers were good for $244 million in net income for 2019, or $2.55 per diluted share, beating 2018’s net income of $227 million, or $2.27 per diluted share. Quarterly net income was $61.4 million, or $0.64 per diluted share, up from $21.9 million, or $0.22 per diluted share.
The company’s focus in 2020 will be continued capitalization of its Navy franchise while ramping up production on the nuclear propulsion system for the Columbia-class ballistic missile submarines.
The BWXT Nuclear Services Group, which includes the company’s work for the Energy Department’s nuclear weapons complex, reported operating income of $5.6 million for the quarter. That was down from $9.2 million a year earlier, chiefly because of lower contract income, according to the release. The segment reported full-year operating income of $14.2 million, dropping $6.1 million from 2018’s $20.3 million due largely because of contract completions and other factors.
The Nuclear Operations Group (NOG), which produces naval nuclear reactor components and other equipment for the Navy and the National Nuclear Security Administration (NNSA), earned about $72 million income for the quarter, down from $91 million for the same period of 2018. Its overall 2019 income was $298 million, compared to $271 million in 2019.
The Nuclear Power Group reported $17.3 million in income for the quarter, improving on the $13.6 million reported for the last three months of 2018. Annual income rose to $53.8 million from 2018’s $52.3 million.
BWXT earnings per share for 2020 could grow to $2.80 per share from $2.62 in 2019, the company said.
Separately, a spokesperson for the NNSA said the semiautonomous DOE nuclear weapons agency is still negotiating a deal for BWX Technologies subsidiary Nuclear Fuel Services to purify enriched uranium for U.S. weapons programs starting early this decade.
The NNSA last summer announced its intent to award a sole-source uranium purification contract to Nuclear Fuel Services. Around 2023, the agency plans to shut down existing uranium purification systems in Building 9212 at the Y-12 National Security Complex in Tennessee. The NNSA plans to replace Building 9212 by December 2025 with the under-construction Uranium Processing Facility.
A Nuclear Fuel Services purification contract would give the NNSA a hedge against running out of uranium metal if there are problems making the swap on time.
ExchangeMonitor reporter Dan Leone contributed to this article.
