Mike Nartker
WC Monitor
2/7/2014
Although Fluor-B&W Portsmouth, LLC, saw a drop in fee for its work at the Portsmouth Gaseous Diffusion Plant in Fiscal Year 2013, the contractor is currently on track for “excellent performance” this fiscal year, according to FBP Site Project Director Dennis Carr. “We are performing very well in the areas for which we are being measured this fiscal year. Right now we are at a level of obtaining maximum fee percentage. Obviously it comes down to what things may occur between now and the end of the fiscal year, but right now, we’re on a trajectory for excellent performance this year,” Carr told WC Monitor late this week.
In FY 2013, FBP earned approximately 75 percent of the available fee—$12.23 million out of an available $16.04 million—consisting of fee tied to a set of Performance Based Incentives (PBIs) and fee tied to subject performance categories, according to information the Department of Energy released this week. While DOE said in its one-page fee scorecard that FBP “did meet the majority of performance goals and objectives” in FY 2013, the contractor’s most recent evaluation marks the latest in a steady decline in fee performance since it assumed the Portsmouth D&D contract in 2011. For its first evaluation period, which ran March 29, 2011 to Sept. 30, 2011, FBP earned approximately 93 percent of the available fee; while in FY 2012 the contractor earned approximately 86.5 percent of the available fee (WC Monitor, Vol. 24 No. 8).
The DOE Portsmouth/Paducah Project Office did not respond to interview requests, or requests for additional comment, on FBP’s FY13 fee evaluation this week, though the Department’s scorecard did note that the contractor “performed well in several areas” last fiscal year. Carr said that DOE’s FY 2013 fee evaluation was “a reasonable reflection” of the contractor’s performance that year, but also said that he believed the decrease in earned fee in the last two years is not “a reflection of deteriorating performance.” He said, “I think you have to step back and say, ‘Where do these fee plans come from?’ They’re not something that continues from one year to the next. Every year you negotiate new PBIs, and those PBIs are based upon what you know at the beginning of the year.”
Could Contract Extension Be At Risk?
FBP’s latest fee evaluation comes as the Department has begun considering whether or not to exercise a five-year contract option to keep the contractor in place at the Portsmouth D&D project; and as a Fluor-led team is competing for a new contract to provide deactivation services at Portsmouth’s sister facility, the Paducah Gaseous Diffusion Plant in Kentucky, a decision on which is expected sometime this year (WC Monitor, Vol. 24 No. 34). When asked if he was concerned if FBP’s fee performance could have an impact on DOE’s decision whether or not to exercise the Portsmouth contract option, Carr said, “We need to make performance now, today,” adding, “I can’t say whether it’s going to be a factor. I don’t know what all the factors are going to be considered in that decision. I, obviously, want to achieve at the highest levels, and we’re focused on that right now for this year in our new fee plan for this year—obtaining excellent performance this year.”
Some PBIs Not Completed in FY 2013
The bulk of FBP’s FY 2013 fee consisted of approximately $9.18 million (81.8 percent) of the available fee tied to a set of 17 Performance Based Incentives. Of those, FBP “successfully completed” 11, “partially completed” two and “did not complete” four, according to DOE. In a Jan. 31 letter to FBP, obtained by WC Monitor, DOE Portsmouth/Paducah Project Office Manager Bill Murphie wrote, “The completion of 81.8% of the objective performance based incentive work is indicative of very good performance on the physical work in the field. In particular, FBP successfully removed 53 (out of 200) cells of enrichment equipment from the high assay X-326 uranium enrichment process building, packaged and shipped over 32,000 cubic meters of waste and materials to nine different treatment and disposal facilities, and completed demolition and disposal of the Portsmouth Coal-fired Steam Plant.”
According to Carr, FBP failed to fully complete some of the PBIs because of changed conditions. “Things changed as we went through the year and precluded us from being able to obtain them. Prior years, we didn’t have that issue,” he said. “We took our best run at them. Things changed and we weren’t able to accomplish them safely by the end of the year.” As an example, Carr cited FBP’s work on Portsmouth’s X-530 switchyard. “When we began down the path, we had a certain design
concept, and we revised that design concept to actually a simpler design, but we had to go back to the design table. We got through that process, went out into the field to execute the project, and what we found is when we got there, there was undiscovered asbestos within the electrical equipment that was not identified because it was at that time energized.” As a result of the asbestos discovery, Carr said, “we had to stop and do a re-plan on the entire job to bring in trained asbestos crews to be able to mitigate the asbestos. By the time we got through that, there was no way to complete the job.”
Contractor Gets ‘Good’ Ratings
FBP also earned approximately $3.05 million (63.4 percent) in fee—and received ratings of “good”—for its performance in two “subjective” categories of performance: Quality and Effectiveness Performing the DOE Mission and Decontamination and Decommissioning to include Project Management; and Quality and Effectiveness in Performing Environmental, Safety, Health and Quality and Regulatory, according to DOE. In his letter, Murphie praised FBP for exercising “effective cost and schedule control against the FY13 approved work plan and the approved baseline, as evidenced by the cost and schedule performance indicies maintaining a ‘green’ status throughout FY13.”
Murphie also noted, though, that “DOE continues to observe a basic weakness in developing, planning, scheduling, and integration of documents for DOE. For example, the Life Cycle Baseline was submitted on schedule, but DOE rejected the initial submittal because of inadequate and obsolete discussions of scope and inadequate basis of estimates.” In addition, he wrote, “FBP’s management of regulatory documents requires some improvement.”
And while FBP lost approximately $250,000 in fee over safety concerns (WC Monitor. Vol. 24 No. 13), the contractor’s safety performance has improved, Murphie wrote in his letter. “FBP addressed these issues with additional management focus and resources and systematically developed a wide array of FBP safety programs and initiatives. DOE has closely observed and examined FBP’s safety performance in FYI3, and concludes that safety performance has improved,” he wrote. Murphie also wrote, though, “The Department continues to regard the delay in the establishment of a validated Integrated Safety Management System (ISMS) program as a significant negative factor,” and added, “FBP must resolve the delays in establishing ISMS and work to establish a strong safety culture at the site.”
Carr largely declined to comment on DOE’s subjective assessment, saying he expected to receive more information from the Department early next week. “Obviously we thought we did better, but until I get their debrief, I need to kind of get a sense of what their considerations were.” Concerning safety, Carr said FBP has declared its readiness for DOE to perform an assessment of its ISMS program. “I think that’s going to be a significant game changer,” he said. “Now we will be under a compliant ISMS-based system. That’s number one. I think that process has also helped to pare down our internal processes and make them more efficient.”
No ‘Skyline Changes’ Planned in FY 2014
Going forward this fiscal year, FBP plans to continue with its efforts to deactivate Building X-326 through the removal of convertors and other equipment from another 75 of the cells in the building, according to Carr. FBP also intends to conduct “a substantial shipping campaign” of waste from Building X-326 and other nuclear materials at Portsmouth, as well as work to “fix up some of the facilities” at the site, Carr said. “We need to be able to get a more hardened infrastructure here that can withstand the harsh winters that we’re having here. This year, it’s been a struggle getting through the winter because of the condition of some of the facilities,” he said.
Carr noted, though, that FBP does not plan to pursue actual facility demolition this year due to funding. In the FY14 omnibus spending bill approved by Congress, funding for cleanup activities at Portsmouth received a significant boost from what DOE had requested—$137.6 million compared to $91.8 million. However, Carr said that Portsmouth’s funding level this year is “essentially equivalent” to the previous year because the additional funding from Congress offsets a significant drop in the price of uranium, which the Department provides to FBP to also help fund cleanup activities at Portsmouth. “You aren’t going to see skyline changes this year because we don’t have the funding level, given those other three priorities, to focus on teardowns. We are going to get out of three facilities in anticipation of funding next year to be able to tear down facilities. … But this year’s priorities do not include demolition activities,” Carr said.
Carr also said FBP is currently on schedule to complete the deactivation of Building X-326 and have it ready for demolition by Fiscal Year 2016, though he warned that schedule is dependent on funding levels the contractor receives next year. “I’ll be quite frank—it comes down to where we land in the funding for FY15,” he said. “This year is going to keep us on track. That’s my number one goal—to be there.”
