BWX Technologies still hopes its team can win the multibillion-dollar liquid waste management contract for the Energy Department’s Savannah River Site in South Carolina, executives said Aug. 7.
The Lynchburg, Va., company partnered with Bechtel and Honeywell in Savannah River EcoManagement, which last fall initially won a 10-year, $4.7 billion contract to take over the waste work. It resubmitted its bid in the second quarter after the Government Accountability Office in February upheld a protest from an AECOM-CH2M team that had competed for the deal.
The Energy Department is considering revised bids from all three original teams. The third is a Fluor-Westinghouse partnership.
“We still continue to expect a decision on that contract by the end of September of this year and we remain optimistic about the pipeline of future bids [for other DOE work],” David Black, BWXT senior vice president and chief financial officer, said during the company’s quarterly earnings call with financial analysts.
The company had built the Savannah River Site liquid business into its income projections for 2018 prior to the successful protest being filed, said BWXT President and CEO Rex Geveden. The protest is effectively delaying the eventual award by nearly a year, from October 2017 to September 2018, he added.
The second DOE bid award would be followed by a 90-day transition from the current contractor, AECOM-led Savannah River Remediation, of which BWXT is a member, Geveden noted. Revenue from the BWXT-led EcoManagement liquid waste contract would not make a real impact on the balance sheet until 2019.
On a related note, DOE on Tuesday released a draft solicitation for the SRS management and operations contract that could be worth nearly $15 billion over 10 years.
BWXT is also a junior member of the Battelle-led team that in April scored a five-year, $5 billion management contract extension at the Idaho National Laboratory. The extension keeps the venture at INL through September 2024. The management contract covers work across the DOE mission, including nuclear science and technology. It does not include the Idaho Cleanup Project, a separate contract held by Fluor Idaho.
Likewise, Newport News Nuclear BWXT-Los Alamos (N3B) in April assumed a $1.4 billion, 10-year contract for legacy cleanup operations at the Los Alamos National Laboratory in New Mexico. The work includes tearing down and cleaning up old structures as well as protecting a key regional aquifer.
BWX Technologies on Aug. 6 reported revenue of $439 million for the second quarter of 2018, a 7.1 percent improvement from the $410 million it brought in a year ago.
Net income at the government contractor came in at $60.7 million ($0.60 per share). That was down slightly from $61.3 million ($0.61 per share) in second-quarter 2017.
The company’s Nuclear Services Group, which includes business with the Energy Department cleanup office and the semiautonomous National Nuclear Security Administration (NNSA), reported operating income of $3.5 million for the second quarter, down from $15.4 million in the same period of 2017. The major difference was a favorable $7.9 million legal settlement for the prior-year period, BWXT said.
The company also announced completion of its purchase of Sotera Health’s Nordion medical isotope business. The deal involves about 150 Nordion employees and two facilities: Nordion’s primary medical isotope production facility in Ontario and an isotope processing site in British Columbia.
Management reiterated its 2018 fiscal guidance for earnings per share of $2.45 to $2.55.
