Jeremy L. Dillon
RW Monitor
2/27/2015
While the Army Corps of Engineers prepares to finalize the Request for Proposal for the Shallow Land Disposal Area in Armstrong County, Pa., potential bidders have raised concerns this week over the lack of indemnification for the contract. Without indemnification, many major companies may stay away from lucrative cleanup work due to the risk the site poses, officials said this week. “If you went to one of the town hall meetings, you would hear the public cry for the top nuclear companies to come in and take that project on,” an industry executive told RW Monitor this week. “The Corps believes its stable of FUSRAP contractors will bid this without indemnification. The big guys don’t want to bid without indemnification. DOE has Price-Anderson, but the Corps doesn’t have anything like that. I question whether they will be able to get the top contractor base in there to bid this job without providing some kind of indemnification.”
The SLDA site is one of the larger projects in the Corp’s Formerly Utilized Sites Remedial Action Program (FUSRAP). According to a recently released proposed Record of Decision, the cost of the cleanup has jumped to $350 million under an increased 46 month timeline after the government halted the project in 2011. FUSRAP said it suspended the work then after the on-site contractor deviated from the Corps’ material-handling procedures and that a large amount of unanticipated complex material was found on site. A Nuclear Regulatory Commission Inspector General report from last year revealed that the Corps’ remediation plan for the SLDA site “grossly underestimates” how much radioactive material remains on site while a lack of documents inhibits the government’s ability to know exactly what is buried on site.
According to another industry official, a smaller contractor would not be able to complete the complex cleanup work, especially given the indemnification issues. “They ran into nuclear material, and they are going to need substantial contractors to deal with this stuff. To do so, they need to address nuclear indemnification,” the official said. “They probably do have enough contractors to bid it without indemnification, but they aren’t the guys you want handling that material.”
Public Law 85-804 As Compromise?
While the Corps does not have Price-Anderson to insure contractors dealing with nuclear materials, it can invoke Public Law 85-804, a provision that provides indemnification for contracts dealing with hazardous and nuclear materials. However, as a policy, the Army does not grant indemnification automatically in these cases, which prevents FUSRAP’s ability to offer the insurance at SLDA. A contractor, though, under PL 85-804 can apply to the Army’s Contract Adjustment Board for indemnification. In this way, if the contractor can prove the merit of indemnification for the SLDA cleanup, the Army can grant it. Outside of that appeal, FUSRAP will continue to operate under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). The Corps did not respond to calls for comment on the issue of indemnification at SLDA this week.
The Corps is currently working on amending the Record of Decision for the site, with a completion date set for this summer. Following the ROD amendment completion, the agency plans to issue a Request for Proposals for the remediation contract for the site this summer and award the new contract by early 2016. On-site infrastructure construction is planned for 2016, and the Corps hopes to begin excavation in 2017.
