Fluor-BWXT Portsmouth will continue cleaning up the former Portsmouth uranium enrichment facility for at least two-and-a-half more years, under a contract modification with the Energy Department that took effect this week.
It is simultaneously a vote of confidence and a bit of tough talking to the conglomerate from the Energy Department, which approved a five-year option period on top of a five-year base when it awarded the contract in 2010. Now, DOE has split the option into a pair of two-and-a-half-year options, according to a contract modification approved Tuesday and released publicly Thursday.
The modification is the product of nine months of negotiations during which Fluor-BWXT Portsmouth was unable to secure a guarantee for five more years of work. Together, the options show the cost of the cleanup work the company is charged with at the site — including decontamination and decommissioning of the site’s three main gaseous diffusion process buildings, and groundwater cleanup — has increased by about $1 billion since the deal’s award, according to the latest contract modifications.
“While FBP has met all performance requirements, the Department has identified opportunities for improvement,” a spokesperson with DOE’s Portsmouth/Paducah Project Office said Thursday. “The decision to exercise the contract option for 30 rather than 60 months will allow sufficient time for DOE to evaluate the effectiveness of program improvements while also promoting accountability and incentivizing excellent performance.”
“We’d obviously love to have a five-year contract, but we understand the 30-month options and DOE wants to make sure we earn the second 30 months,” a Fluor-BWXT Portsmouth spokesperson said Thursday.
The first of the two options in Fluor-BWXT Portsmouth’s updated contract is worth just under $870 million and keeps the company on the job through Sept. 30, 2018. The second option, which would extend the work through March 28, 2021, is worth just over $695 million. Combined, the options are potentially worth slightly more than $1.55 billion to the company.
That puts the total possible value of the contract at more than $3.1 billion over 10 years. When the deal was announced in 2010, it was valued at about $2.1 billion over a decade.
However, DOE may not actually spend exactly that much money on the work. As with the base contract, both two-and-a-half-year options include contractor award fees the department can clip at its discretion, and indefinite-quantity, indefinite-delivery task orders DOE may not actually place.
Costs rose as DOE added work to the pact, and Fluor-BWXT Portsmouth developed better estimates for the remainder of the work based on cleanup it has already completed at the site, the company spokesperson said.
The overriding priority for Fluor-BWXT Portsmouth during the option period just triggered is having the X-326 building “cold and dark” by June 30, 2017, the spokesperson said Thursday. The 60-year-old building, which enriched uranium for nuclear weapons and later for reactors, would have to be torn down by the end of the second option period in spring of 2021, according to the newly modified contract.
Fluor, based in Irving, Texas, leads the Fluor-BWXT Portsmouth partnership, which includes among others junior partner BWX Technologies of Lynchburg, Va. The consortium took over cleanup work at the Portsmouth site in 2011 from LATA/Parallax Portsmouth.
