At Least Two Bidders Going After Job
Mike Nartker
WC Monitor
4/17/2015
With a little less than a month to go before bids are due for the new Idaho Cleanup Project (ICP) Core contract, it appears that the Department of Energy will see some competition for the job. At least two bidders are believed to be competing for the new Idaho contract—AECOM and a team led by Fluor that reportedly includes CH2M, according to industry officials. Fluor has long been seen as among the most likely to bid on the new contract. AECOM declined to comment on the issue late this week.
The new ICP Core contract is intended to replace the two current cleanup contracts at DOE’s Idaho site—one held by CH2M-WG Idaho (made up of CH2M and AECOM) that covers most cleanup work at the site; and one held by Idaho Treatment Group (made up of B&W, AECOM and EnergySolutions) that manages the Advanced Mixed Waste Treatment Project. CWI and ITG’s contracts are each set to expire at the end of September, but DOE notified both contractors last month that it planned to extend the contracts to align with the award of the new ICP Core contract. The new contract is anticipated to be worth approximately $1.5 billion over five years.
Potential Bidders Had Been Concerned Over Initial Versions of Planned Contract
While the new Idaho contract represents one of the few major near-term business opportunities in the DOE cleanup program, there have been questions as to how many companies would choose to actually bid on the job since DOE issued an initial draft Request for Proposals that was met with concern from potential bidders. Initially, as many as four teams were believed to be interested in pursuing the new contract, but nearly all potential bidders made it clear that they could not bid on the contract as outlined in the initial draft RFP because of concerns over provisions that would make the winning contractor liable for costs above the target cost combined with uncertainties in the work scope to be performed.
In apparent response, DOE made several changes to the planned contract, such as removing a provision that would have made contractors responsible for all costs going forward once the target cost for the new contract had been exceeded by $150 million. DOE also significantly modified the planned fee structure for the contract from an approach that largely kept all potential fee for the new Idaho contract from being final until the end of the job, to one that ties a “substantial portion” of fee to schedule milestones that if completed on time, becomes final and not subject to potential clawback, with some cost incentive fee still to be kept from being final until the end of the contract.
Following the release of the final RFP for the new contract last month, acting cleanup chief Mark Whitney said he was “comfortable” with the expected level of competition for the contract. “With the release of the RFP … and the proposals anticipated within the next 60 days we hope the final RFP is structured in a way to encourage as much competition as possible,” Whitney said in testimony before the House Energy and Water Appropriations Subcommittee, adding that “we think that is how you get value for the government, the more competition the better.”
