The Energy Department Office of Environmental Management expects to speed Cold War cleanup by decades and save “$100s of millions” in life-cycle costs, according to the Donald Trump administration’s fiscal 2020 budget request.
The request, issued in March, would trim the DOE nuclear remediation appropriation, from $7.2 billion in fiscal 2019 to $6.5 billion in fiscal 2020, which begins Oct. 1.
The end-state philosophy is called a key “reform initiative” for contracting and an effort to reduce the EM program’s life-cycle estimate, which has increased to more than $369 billion – up over $100 billion from the liability estimate two years earlier, according to the budget justification and the Government Accountability Office.
“The principle idea is to pay more fee for early and under cost completion of work,” in an effort to replicate success made with cost-plus-incentive fee contracts used for closure sites such as the Rocky Flats weapons plant in Colorado, the budget request says.
The idea is to convert most of EM’s existing cost plus award fee contracts to cost-plus-incentive contracts focused on end states as they are recompeted over the next several years.
In the meantime, the cleanup office will seek to tweak existing contracts to include incentives for performance to the extent possible. The budget justification document indicates the status quo focuses too much on goals that don’t necessarily hasten project completion.
“A cogent overall strategy will be very important to the successful offeror,” according to DOE. “The contractors will have to make progress on difficult cleanup, not just less-challenging scopes of work,” even if this means not picking the cheapest contract option.
Two multibillion-dollar solicitations using end-state incentives were issued in February for the Hanford Site in Washington state – the Tank Closure Contract and the Central Plateau Cleanup Contract. Additional similar procurements are scheduled in 2019.
The Energy Department expects this approach to yield more innovative approaches to remediation.
