The Energy Department and Parsons are saying little about their recent spat over missed deadlines at the Savannah River Site’s Salt Waste Processing Facility (SWPF), including whether the federal agency has begun imposing up to $33 million in penalties against the contractor.
One milestone has already passed: a March 31 deadline for Parsons to submit a declaration of readiness to proceed so the Energy Department can start its operational readiness review at the SWPF: a facility that, once ready for operations, will treat millions of gallons of radioactive salt waste stored in more than 40 underground storage tanks at the DOE facility near Aiken, S.C.
The Energy Department told Parsons in a March 19 letter that it would charge the contractor $3 million per month in disincentive fees for the missed deadline, capped at $18 million. In addition, the agency said Parsons is close to maxing out the allotted funding for the testing and commissioning phase of SWPF readiness, which could result in another $15 million penalty.
“It is DOE’s position that we will enforce the current contract as written in the language above,” DOE Contracting Officer Justin Speering wrote in his letter to Frank Sheppard, Parsons senior vice president and SWPF project manager.
The Energy Department and Parsons were asked this week if those fees have been levied; if so, how they were levied — whether by outright payment from the contractor, subtractions from its regular fee, or other means; and if Parsons would pursue legal action since it has claimed that DOE is not within contractual standing to levy fines.
In an emailed response, Parsons said: “At this time Parsons has no further comment.”
A Savannah River Site spokesperson followed suit, stating: “Due to the procurement sensitivity of this issue, DOE has no further comment since we did provide a response.”
Parsons was hired in 2002 to design, build, test, and start up SWPF no later than January 2021. Both parties still expect to meet that goal, though they missed a previously declared startup date of December 2018 and are instead aiming for December of this year.
In the March 19 letter, obtained by Weapons Complex Monitor, Speering wrote that testing and commissioning of the SWPF was supposed to cost no more than $380 million. He said Parsons was close to surpassing that amount, but DOE would not say how much has been spent to date or when overruns would officially begin.
Parsons fought back on the cost overruns and missed deadlines, in an undated, draft response to the March 19 letter, also obtained by Weapons Complex Monitor.
In that letter, the contractor said it has had to push dates back for the readiness declaration multiple times due to unforeseen equipment issues, such as last year’s replacement of more than 400 control valves at the SWPF. The Energy Department has not taken those issues into account when assessing penalties, Parsons wrote.
