Mike Nartker
WC Monitor
8/29/2014
The Department of Energy appears to be on track to meet a goal to have a final cost and schedule baseline for D&D efforts at the Separations Process Research Unit completed by the end of September, a DOE official told WC Monitor this week. The new baseline could help finally resolve how DOE and contractor URS will allocate responsibility for the costs incurred at the SPRU D&D project following a set of contamination incidents that occurred in 2010 and significantly disrupted work. Since the fall of 2012, the Department has been using an “interim baseline” submitted by URS, according to DOE’s Fiscal Year 2015 budget request, which notes, “In January 2013 the contractor began implementation of a slower rate of progress than required by the interim baseline and working to a URS baseline, which has not been shared with or validated by DOE.”
In a written response late this week, Candice Trummell, a spokeswoman for the DOE Office of Environmental Management, said, “DOE continues to negotiate with URS on the SPRU D&D project and cannot comment on when a baseline will be approved by DOE and URS management.” URS declined to comment on the issue this week, referring questions to the Department.
Contract Mod. Made URS Responsible for Some Costs
The SPRU D&D project entails the removal of two buildings used in the 1950s to research chemical processes for separating plutonium and uranium from irradiated materials. The project was initially expected to be completed in 2011, but in the fall of 2010 a set of contamination incidents occurred during open-air demolition activities at one of the two SPRU buildings that resulted in the spread of low levels of contamination to the broader Knolls Atomic Power Laboratory, where SPRU is located, as well as to a local river.
In response to the contamination incidents, in 2011 DOE moved to reach a contract modification with URS to set up a cost-sharing approach for completing work. That approach entails DOE being responsible for all project costs up to $105 million; DOE and URS splitting all costs incurred from $105-145 million; and URS being fully responsible for covering all costs exceeding $145 million. Since the contract modification was finalized, though, URS has been pushing back against being held responsible for significant portions of the costs to date incurred at SPRU, which have included, among other issues, addressing the impacts of bad weather at the site.
URS Puts SPRU D&D Costs at Currently $280 Million
In its latest earnings report, released earlier this month, URS said the total project cost for the SPRU D&D project has increased to $280 million as of July 4. “In April 2013, WGI Ohio submitted claims against the DOE pursuant to the Contracts Disputes Acts seeking recovery of $118 million in unfunded requests for equitable adjustments (“REAs”), including additional fees on expanded work scope. Through July 4, 2014, the DOE has approved one of the REAs for $1 million and has authorized $34 million of additional funding primarily related to the hurricane-caused impacts,” the earnings report states.
The report adds, “As of July 4, 2014, WGI Ohio has recorded $99 million in accounts receivable for project costs incurred to date in excess of the DOE contracted amount that may not be collected unless and until the claims are favorably resolved. In addition, due to continuing delays and disagreements about the responsibilities for the scope of the remaining project completion costs, WGI Ohio is unable to determine its portion of the remaining project completion costs, which may exceed $300 million.”
When Will Work be Completed?
It remains to be seen when D&D work at the SPRU site will actually be completed. While DOE’s FY 2015 budget request included a goal to have work done at the site that year, the Department has recently said that URS is at risk of missing that schedule. “Although it is possible to complete the project by the end of Fiscal Year 2015, the work is currently not progressing at a pace to support completion by the end of 2015,” a DOE spokesperson said in a written response to WC Monitor last month. “Although URS continues to make safe and steady progress at SPRU, DOE is not satisfied with URS’s overall performance on the cleanup at SPRU. Work is not proceeding at an optimal pace, however at this point URS is funding the project as a result of exceeding the negotiated contract cost cap,” the spokesperson said.
