Fluor Chairman and CEO David Constable expects the Department of Energy’s National Nuclear Security Administration to decide on a new management contractor for the Pantex Plant in Texas in the second or third quarter of this calendar year.
Constable made the comment during a Tuesday earnings call with Wall Street analysts. The Fluor chief is also happy that DOE’s Environmental Management branch plans to extend the existing decontamination and decommissioning contract held by a Fluor-BWX Technologies team at the Portsmouth Site in Ohio.
“We are expecting an award [for Pantex] I’d say second quarter to third quarter 2024, but before the election” on Nov. 5, Constable said. “That’s maybe the best timing I can give you there,” he said in response to an analyst’s question. Fluor has confirmed it’s in the running and is believed to be partners with BWX Technologies on a team pursuing the standalone Pantex contract. With options, the prized Pantex award could last decades and be worth $30 billion.
Jill Hruby, the head of the National Nuclear Security Administration, told an Exchange Monitor conference recently that a new Pantex contractor might be in place in November.
Fluor anticipates the Portsmouth extension “to be funded later this year,” Constable said. DOE has not said how much the Portsmouth extension will be worth. Currently valued at $5 billion, work on the Fluor-BWXT Portsmouth contract started in August 2010.
DOE has announced the award of a successor Portsmouth environmental contract, worth about $5.9 billion, to a team of Amentum, Fluor and Cavendish, back in July 2023. But transition to the new team has not started yet due to delays in DOE’s award of a companion contract that affects both Portsmouth and the Paducah Site in Kentucky, which includes conversion of depleted uranium hexafluoride.
The government contracts in Fluor’s Mission Solutions segment can be “lumpy” and slow to turn over, Constable said, but added they can run 10-to-20 years. Fluor benefitted from the process in September 2022 when DOE approved a potential five-year extension for the Fluor-led prime at the Savannah River Site in South Carolina, the CEO said. The Savannah River contract is now valued at $24 billion.
At the Monitor’s annual Nuclear Deterrence Summit, Hruby said the NNSA, which is taking over as the Savannah River landlord in 2025, planned this spring to start a competition for a management and operations contractor to replace Savannah River Nuclear Solutions.
Fluor earnings fell during the fourth quarter of 2023, ended Dec. 31.
Net earnings for the fourth quarter ended Dec. 31, 2023, reflected a net loss of $21 million or $0.12 a share, down from net earnings of $9 million, or $0.01 in the year-ago quarter. Quarterly revenue was $3.8 billion, up year-over-year from $3.7 billion.
Quarterly segment operating income for the Mission Solutions segment where Fluor coordinates its Department of Defense and DOE joint ventures, was $31 million, up from $20 million a year ago, Fluor said in a press release. Segment revenue was $646 million, up from $509 million in the year-ago period.
For 2023 as a whole, Fluor earnings were $139 million, down from $145 million in 2022. Annual revenue was $15.5 billion, up from $13.7 billion in the prior year.
Mission Solutions reported an operating profit of $116 million in 2023, down from $136 million in 2022, due in part to delays and a cost increase “on a weapons facility project,” according to the release. Fluor did not identify the owner of the project. Full year Mission Solutions revenue was $2.7 billion up from $2.3 billion a year earlier, Fluor said.
Fluor is currently the lead partner in environmental cleanup joint ventures at the Department of Energy’s Portsmouth Site in Ohio and the Paducah Site in Kentucky. It also heads the management and operations contractor at the Savannah River Site in South Carolina and is an integrated subcontractor to the prime at the National Nuclear Security Administration’s Los Alamos National Laboratory.
