March 17, 2014

DOE, PARSONS FINALIZE SWPF CONTRACT MODIFICATION FOR CONSTRUCTION

By ExchangeMonitor

The Department of Energy and Parsons yesterday signed a long-awaited contract modification for construction of the Salt Waste Processing Facility. The modification largely follows an agreement-in-principle reached in April between the parties. DOE Savannah River Site spokeswoman Amy Caver said in a statement that the modification “caps American taxpayer liability and ensures this important project will have the funding needed to complete construction safely. The contract modification caps the total amount of funding the Department will pay to Parsons for completion of construction at $540 million, and includes incentives to reduce costs and meet or accelerate the revised targeted construction completion date of December 31, 2016.”

The contract modification sets a target cost for the facility at $530 million, and DOE and Parsons will split any cost overrun up to $20 million beyond that cap. Parsons will be fully responsible for any costs over $550 million. It offers incentive fee in a number of areas, including completing construction before October 2016, and retaining key personnel through the completion of related milestones. The modification only covers construction, while commissioning and startup will likely be addressed in a subsequent contract change. The change was needed after lengthy delays in the delivery of key vessels for the plant caused cost increases and schedule delays, which had a regulatory startup commitment of October 2015.

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