Until he joined the newly spun-off BWX Technologies in late 2015 as chief operating officer, former NASA hand Rex Geveden hadn’t had much to do with nuclear anything since supporting fast-breeder reactor research during his student days at the Argonne National Laboratory.
That’s the sort of resume gap that was never likely to fly under the radar at a company that has only sharpened its focus on nuclear markets lately, and so it was late last year that one investor analyst (during a meet-and-greet conference call arranged right after Geveden’s promotion to CEO was made public) asked why an outsider had been made president and CEO of such an inside-baseball business.
Yet no less an authority than BWXT Executive Chairman John Fees — who once led both BWXT and its now-spun-off energy sister company, Babcock & Wilcox — answered than Geveden had experience “in spades” with complex technical programs, and plenty of familiarity with commercial businesses from his time as president of NASA contractor Teledyne Brown Engineering.
So it was that Geveden took the reins of a company that last year derived more than 80 percent of its revenue from sole-source contracts to build propulsion systems for U.S. nuclear submarines. Yet despite the obvious financial primacy of its submarine business, Geveden has steadfastly refused to paint BWXT’s other nuclear ventures as mere stepchildren of the naval-propulsion work.
A cross section of BWXT’s work for DOE includes — but is not limited to — decommissioning of the Portsmouth Gaseous Diffusion Plant in Piketon, Ohio, for the agency’s Office of Environmental Management, and nuclear operations and security at the Los Alamos National Laboratory in New Mexico.
“Strategically [they’re] very interesting to us and that’s the reason we play there,” Geveden (JEH-vuh-den) told Weapons Complex Monitor this week in an interview that touched on his plans to pursue more commercial and government business adjacent to BWXT’s core nuclear owner-operator capabilities.
Let’s start with your company’s work with DOE’s Office of Environmental Management. Some of your competitors look at their Cold War cleanup contracts as a dependable way to keep the lights on at headquarters. Does BWXT consider its work in the weapons complex this way?
So we don’t view this as a way to keep the lights on from a corporate perspective at all and I don’t think I’d ever put it in those terms. Those activities are strategically interesting to us because of how we face the market in DOE.
In that market, Environmental Management, but also in the other parts such as weapons labs management and operations, we’re somewhat unique. In fact, I would claim we are almost entirely unique in that market because we’re an owner-operator of nuclear facilities: we manufacture nuclear fuel, we manufacture nuclear components, we handle special nuclear materials.
Financially speaking, it’s an equity income situation for us, not an overhead-absorbing kind of activity.
What makes Environmental Management contracts must-bid work for BWXT?
We’re in the business of going and attacking markets where we think we can have success, and this is one such place. It fits what we do, it fits what we are. In particular, following the spinoff we’re actually as pure-play a nuclear company as you get, and there’s some strategic convenience behind being that pure.
Does BWXT plan to stay involved with the Environmental Management office throughout the remaining 50-plus years of Cold War nuclear cleanup? In the nearer term, what’s opportunities do you think you can get under contract in that market?
We’re absolutely committed to the market, and I can’t imagine any reason we would exit that market. I can’t make 50-year commitments for the company, but we’re in it to stay.
I’d be careful not to disclose any particular competitive opportunities that we’re in right now, but we evaluate every one of these things, and we feel like we’ve got competitive differentiation to offer to each one of these things.
It’s rumored BWXT is bidding as a lead on a follow-up Environmental Management contract for liquid-waste management at the Savannah River Site near Aiken, S.C. Is that true?
Ha! No comment on that one.
More generally, then, does BWXT intend now to bid more often as a prime or head team member on either DOE cleanup or national labs work?
We’ve always had a specific strategy that evolves for each opportunity. It depends upon how the teams are shaping up, it depends on what we want to do around the cost strategy, things we want to do around the technical strategy, and so sometimes we end up being, having 12.5 percent of the equity and sometimes we end up having 51 percent of it. I’m not trying to be generic about it. It’s always opportunity-specific.
So yes: There are going to be times when we’re on the majority position on those [joint ventures], and then there are going to be times when we’re going to be on a minority position on those JVs. And we’ll always do it in a way that makes the most strategic and competitive sense for us.
We’re really the only owner-operator functioning in that space in terms of having nuclear manufacturing facilities, nuclear operations that function under the BWXT flag and ownership. Since we have a portfolio in nuclear operations and a nuclear environmental management that we have to do for ourselves, we take that capability and we pivot it into other markets.
Would you say that’s the same approach your predecessor, Sandy Baker, took to this business?
There’s no fundamental change between the way Sandy viewed that and the way I view that.
Does BWXT have any ambitions to branch out further into commercial markets?
We have quite some ambition around commercial nuclear power, especially with what we’re doing in Canada. We did an acquisition at the turn of last year [of GE Hitachi Nuclear Energy Canada]. So that one’s a real growth engine for us.
What about commercial decommissioning and decontamination?
We’re looking at that one.
There’s maybe some very specific cases that would be interesting to us. One of the things that we did, and we haven’t talked much about it is, we made a decision over a year ago now to self-perform some D&D work that we needed to do at our [nuclear] fuel facility in Irwin, Tenn. There was an activity there called blended low-enriched uranium, the BLUE project we call it, and that was a downblending project there that was run on that site for a number of years.
For various reasons, we decided to self-perform that. And one of the reasons was we wanted to have commercial D&D credentials that we could develop. We’re about 15 months into that project, it is going superbly. We’re outperforming the cost and the schedule baseline and we’ll finish that up by summer or early fall and return that to a greenfield state, so that’s been an interesting and positive experience for us.
We’re looking at some specific commercial and government sites, D&D opportunities, apart from what is coming through the DOE opportunities. Some of them are interesting and some of them fit our experience base. But I think they’d have to be sort of specific to our background. We wouldn’t generically be going after large D&D activities.
How long before you might get involved with any of that commercial work?
A couple of them are within line of sight. Near-term opportunities. Almost everything that we do is long-cycle. Opportunities unfold in the range of six months to three or more years, depending on what’s going on. So even something that’s in the crosshairs right now would take a year to develop, something like that.
