DOE NOW TO ALLOW PARENT COMPANY COSTS ON NEW PADUCAH CONTRACT

The Department of Energy has decided to reverse course and allow parent company costs to be reimbursed on the new Paducah deactivation contract. The change was announced in a set of questions-and-answers issued late last week on the final Request for Task Proposal for the new contract. One potential bidder had questioned DOE’s initial decision to not allow parent company costs given the amount of deliverables expected to be submitted soon after the new Paducah contractor is fully in place. “Meeting these deliverables will require the use of home office staff and yet, Section H.150 says that such support must be provided without fee. Considering the large number of deliverables and that the timetable is prior to actual hiring of local staff, please reconsider Section H.150, at least for activities during the first 90 to 120 days,” the potential bidder asked. In response, DOE said, “The RTP will be revised by an amendment to delete the clause at H.150, Parent Organization Support.”

DOE’s initial decision to not allow parent company costs was one of several provisions in the final RTP for the new Paducah deactivation contract to come under question by potential bidders. In a letter to a DOE contracting officer last week notifying the Department of its decision to stand-down proposal work, Bechtel reportedly cited concerns with the parent company cost language as one of its rationales for pausing its bid. Explaining the decision to not allow parent company costs, the final RTP’s initial clause said, “For on-site work, the U.S. Department of Energy (DOE) fee generally provides adequate compensation for parent organization (home office) expenses incurred in the general management of this Task Order. The general construct of this Task Order results in minimal parent organization investment (in terms of its own resources, such as labor, material, overhead, etc.) in the Task Order work.” It remains to be seen whether the change to the parent company language will be enough for Bechtel–which raised other issues in making its decision to stand-down its bid–to resume its work on the Paducah proposal. 

The full set of Q&As issued late last week can be found here. DOE said it expects to issue another set this week.