The Department of Energy on Tuesday formally canceled the liquid waste management procurement for the Savannah River Site in South Carolina, citing “significant changes” to requirements at the facility and its own acquisition strategy.
That is the crux of a one-page letter sent to the three bidders on what could have amounted to a decade-long $6 billion contract: Fluor Westinghouse Liquid Waste Services, Savannah River EcoManagement, and Savannah River Technology & Remediation.
Termination of the long-running solicitation leaves the current SRS liquid waste contractor, AECOM-led Savannah River Remediation, in place for the time being. Whatever vendor ends up with the work could assume assume responsibilities now handled by Savannah River’s operatoions and management prime, Fluor-led Savannah River Nuclear Solutions.
The Energy Department “gave careful consideration to the changes in the LW program and related nuclear material disposition missions that have occurred at SRS since the solicitation was originally issued in 2016,” according to the Tuesday letter from Contracting Officer Aaron Deckard.
While Deckard did not elaborate, there have been ongoing talks on whether the department’s Office of Environmental Management or semiautonomous National Nuclear Security Administration should be the ultimate “landlord” for the site. The Environmental Management office now oversees the site management contract, which includes some nuclear-weapon work for the NNSA. The two DOE branches have said a joint committee could make recommendations on the future of Savannah River early this year.
It’s possible the Energy Department could fold the liquid waste management function into the management and operations contract, some suggest. About a dozen years ago the Energy Department had everything at SRS under one contract, one industry source noted Tuesday.
Savannah River “is not the same site” as it was just three years ago, the same source said. The Mixed Oxide Fuel Fabrication Facility has been terminated and the plant is to be converted for production of fissile nuclear-warhead cores, which will result in new waste streams. The original RFP for liquid waste management also assumed the contractor would be operating the Salt Waste Processing Facility (SWPF) by now, and that facility is not yet online, he added.
To ensure maximum reduction in environmental risk and financial liability, the agency said in the Tuesday letter it wants a single contractor in charge of the “inter-related” L-Basin, H-Canyon, and liquid waste operations. L-Basin holds spent fuel assemblies from domestic and international research reactors, and H-Canyon is a hardened nuclear chemical separations plant. Both L-Basin and H-Canyon are now under the SRNS management and operations contract, which has been extended through July.
How the liquid waste cancellation might ultimately affect the management contract is not yet clear. A DOE procurement schedule for the operations contract does not list a target date for a contract award.
In addition, the Energy Department decided use of its new end-state contracting model would result in maximum progress in SRS cleanup. The new approach envisions using a single-award, indefinite-delivery/indefinite-quantity (IDIQ) contract for each acquisition which could include both cost-reimbursement and firm-fixed-price task orders. The DOE believes such arrangements offers it more flexibility than traditional management and operations contracts in order to expedite remediation.
“Because of the magnitude of the technical and programmatic changes, issuance of an amended solicitation is not appropriate nor in the Government’s best interest,” Deckard wrote in the letter, obtained by Weapons Complex Monitor.
Additional information on any follow-on procurements at SRS will be issued at a later date, according to Deckard.
An Energy Department spokesperson said Wednesday Savannah River Remediation would be retained past the expiration of its current contract extension on March 31. There was no official word on the length of such an extension.
The AECOM-led firm is working under a third piecemeal extension since its original $5 billion, eight-year contract ended in June 2017. The Energy Department is looking to bridge the interim period between the end of March and whenever a new vendor is selected for a combined nuclear material and liquid waste contract.
This could be a significant extension, sources said Wednesday.
Logic would dictate that SRR will get more than a few months to give the Energy Department enough time to plan how to incorporate operations now currently under two different contracts, said Rick McLeod, president and CEO of the Savannah River Site Community Reuse Organization, which promotes economic development around SRS.
The current SRR work involves processing 36 million gallons of radioactive waste into a more stable form for disposal, along with closing underground storage tanks that now hold the waste. In addition to AECOM, the contractor consists of Bechtel, CH2M, and BWX Technologies.
When DOE began the new procurement in 2016, the SRR teams split into two camps.
In October 2017, the department awarded a new $4.7 billion contract to Savannah River EcoManagement, led by BWXT and featuring Bechtel and Honeywell. The BWXT team submitted the low bid, followed by a $5.5 billion proposal from Fluor-Westinghouse and an offer of just under $6 billion from the AECOM-CH2M team.
Both losing teams protested the contract, and the Government Accountability Office in February upheld the AECOM-CH2M case that the Energy Department had not properly vetted the viability of the winner’s technical approach to converting liquid waste into more a stable form.
In spring 2018, the Energy Department sought updated offers from all three bidders.
The bidders did not say much publicly after the cancellation. Bechtel called the decision “disappointing,” but added it will still work with DOE on its revised plans at SRS. Likewise, Fluor said it will continue to work with the department in the weapons complex. AECOM and BWXT declined comment.
One industry source lamented DOE canceled this contract so close to the finish line. It is safe to assume each team spent millions of dollars, and tied up key personnel for years, in pursuit of business that did not materialize. “It’s frustrating,” he said.
