BWX Technologies President and CEO Rex Geveden sounded confident Wednesday that a partnership led by his company will retain a 10-year contract for liquid waste management at the Energy Department’s Savannah River Site in South Carolina – even after the Government Accountability Office upheld a competitor’s protest against the deal.
In a redacted version of its Feb. 8 decision, the GAO last week said the Energy Department had not done enough to verify the technical approach for waste processing, put forward by BWXT with partners Bechtel and Honeywell, would work.
The Savannah River Site has stored about 35 million gallons of radioactive nuclear waste in 43 underground tanks. The bid protest argued the BWXT-led group would significantly depart from prior practices when it comes to the “concentration” of the waste while it is being processed.
The CEO of the Lynchburg, Va.-based company broached the issue during a quarterly earnings call with Wall Street analysts.
BWXT’s “Nuclear Services [Group] has been awarded more than $8 billion in contract value over the past year, and while the protest for the $4.7 billion Savannah River liquid waste contract is still pending, we are working with our customer through the process in order to resolve as quickly as possible so that transition work can begin,” Geveden said.
The Energy Department awarded the contract in October, and it quickly drew protests from the two losing teams. The GAO sustained hte protest from an AECOM-CH2M team, awarding it reimbursement of legal fees, but dismissed the protest from a Fluor-Westinghouse partnership.
Geveden did not elaborate on the matter, and none of the financial analysts asked him about it during the call. The Energy Department has declined to reveal, so far, what action it will take following the GAO decision. The auditing agency has said DOE should, at a minimum, ensure the winner’s technical approach actually functions as intended.
The Nuclear Services Group, which includes BWXT’s business with the DOE Office of Environmental Management and the semiautonomous National Nuclear Security Administration, is experiencing “a resurgence,” Geveden said.
NSG manages complex projects for the U.S. government and the commercial nuclear sector. Among its work for DOE: BWXT is a partner in Nuclear Waste Partnership, manager of the Waste Isolation Pilot Plant in New Mexico; partners in management of the NNSA’s Los Alamos National Laboratory in New Mexico; and has teamed with Fluor for cleanup of the Portsmouth Gaseous Diffusion Plant in Ohio.
Also during the call, Geveden noted the company’s U.S. Navy business remains strong. The company said this week the U.S. Naval Nuclear Propulsion Program had, during the fourth quarter, picked up contract options worth $492 million for BWXT’s supply of naval nuclear propulsion parts. BWXT’s Nuclear Operations Group is the only maker of naval nuclear reactors for U.S. submarines and aircraft carriers. The NOG unit also provides uranium downblending for the NNSA.
BWXT Reports Revenue Growth for Quarter, Year
BWXT said Tuesday it earned $430 million in revenue during the fourth quarter of 2017, a 6.5 percent increase over the $404 million it took in during the same period in 2016.
BWXT said its revenue for the full year was $1.69 billion for 2017, an 8.8 percent improvement over $1.55 billion in 2016.
The company reported a net quarterly loss of $16 million, or $0.16 per share, compared to net income of $34 million, or $0.34 per share, in the fourth quarter of 2016. BWXT said its results took a $55 million hit largely because of tax reform. One-time non-cash deferred asset write-downs were the culprit, according to management.
Earnings per share (EPS) for the full year came in at $1.47, compared to $1.76 in 2016. BWXT expects its company-wide earnings per share for 2018 will be between $2.45 and $2.55.
BWXT’s Nuclear Services Group “continued to leverage our environmental management credentials to win new key multi-billion-dollar contracts, including the Savannah River Site liquid waste services contract and the Los Alamos National Laboratory legacy cleanup contract,” Executive Chairman John Fees said in a prepared statement.
Stoller Newport News Nuclear (SN3) is the lead partner with BWXT on the LANL contract awarded in December, which is worth $1.39 billion over 10 years, with options.
The Nuclear Services Group’s operating income was $5.8 million for the fourth quarter of 2017, up significantly from $1.3 million in the prior-year period. Full-year segment generally accepted accounting principles operating income for the group was $23.1 million, an 89.9 percent increase from $12.1 million in 2016.
Nuclear Services Group revenue for the quarter was $37 million, compared to $33 million in the fourth quarter of 2016. Annual revenue was $137 million in 2017, moderately up from $128 million in 2016.
