KNOXVILLE, Tenn. — Barring unforeseen circumstances, the U.S. Energy Department’s Office of Environmental Management expects soon to award the potential 10-year, $6 billion support services contract for the Hanford Site in Washington state, an agency procurement official said Wednesday.
The Energy Department apparently recently informed Congress the contract was being awarded, only to reverse course and say the notice was issued in error.
The contract should be awarded “soon, soon,” not months from now, said Norbert Doyle, deputy assistant secretary for acquisition and project management at the nuclear cleanup office. That assumes there are no more unexpected developments, he added on the sidelines of the Energy, Technology and Environmental Business Association (ETEBA) Business Opportunities and Technical Conference.
Three Western Democrats on the Senate Appropriations Committee said in a Sept. 27 letter that DOE should hold off on releasing the multibillion-dollar contract until they get answers regarding a fraud lawsuit the Justice Department filed in February against a group of defendants that include current Hanford support services vendor Mission Support Alliance (MSA).
The Office of Environmental Management is drafting a reply to the letter from Sens. Dianne Feinstein (D-Calif.), Jeff Merkley (D-Ore.), and Patty Murray (D-Wash.), Doyle said.
“A couple of times we have been on the verge of issuing this” Hanford Mission Essential Services Contract, Doyle said during a morning presentation to the conference. “Things happen,” and issues must be addressed, he said, declining to elaborate afterward.
During a DOE business opportunities webinar from the conference on Thursday, Doyle again stressed the “landlord-type” contract should be out soon. The contract covers a wide variety of site-wide services, including emergency services, road maintenance, and management of the HAMMER Federal Training Center.
The senators’ letter suggests the Energy Department plans to award the new contract to “the very same contractor” – apparently meaning Mission Support Alliance, comprised of Leidos and Centerra Group.
Leidos has confirmed they are partnering under a new name, Hanford Mission Integration Solutions, to bid on a new contract that would take effect sometime after the current extension runs out in November. The companies would not say if there are other members in the team. Leidos said it has received no word of a contract award from DOE.
Among other things, the senators in their letter requested that Energy Secretary Rick Perry provide the criteria used to evaluate proposals for the follow-on contract, the status of the government’s case against the contractor, whether the litigation was considered in the award decision.
The Justice Department filed its suit in February against Mission Support Alliance, Lockheed Martin Corp., Lockheed Martin Services, and former Lockheed and MSA executive Jorge Francisco Armijo. The case involves alleged double billing and kickbacks between 2010 and 2015, during which time MSA was owned by Lockheed Martin, Jacobs, and Centerra Group.
The Justice suit alleges the defendants used false statements and withheld key information about anticipated profits in order for Lockheed Martin Services to receive the $232 million subcontract for DOE work at Hanford. The government claims Armijo and other MSA bosses were paid bonuses that were essentially kickbacks to make sure this happened.
Leidos acquired Lockheed Martin’s interest at MSA via a 2016 merger with a Lockheed subsidiary, then two years later it bought Jacobs’ interest in the Hanford joint venture.
The fraud litigation is ongoing in the U.S. District Court for the Eastern District of Washington.
Central Plateau Award Also Expected Soon
Following the Hanford Mission Essential Services deal, the next big contract award at the site will likely be for cleanup of the Central Plateau at the heavily contaminated former plutonium production complex. Jacobs subsidiary CH2M is the incumbent and recently landed an extension that could keep it around through September 2020. Doyle, however, suggested the follow-on contract could come “very soon,” without adding specifics.
The new Central Plateau award could be worth up to $12 billion over a decade. The current business, which started in October 2008, is worth about $6.4 billion to CH2M. The new contract will protect the Columbia River from contamination and complete demolition of the Plutonium Finishing Plant, among other missions.
Central Plateau will be the first major new contract issued under the “end-state model.” The new approach moves away from the 10-year, cost-plus approach where the scope of work is drawn up two years or more in advance, Doyle said. The new approach emphasizes indefinite delivery/indefinite quantity (IDIQ) agreements with many task orders that will be negotiated after a contracting partner is identified.
End states is meant to invigorate environmental remediation progress by focusing the orientation on specific tasks, making it easier for DOE to walk away from contractors if initial assignments don’t meet specifications. In exchange, contractors would receive increased fees for work done well. It does not apply to landlord services or paramilitary services contracts, Doyle noted.
The Energy Department in February issued requests for proposals for both Central Plateau and the Hanford Tank Closure Contract, a potential 10-year, $15 billion agreement. The incumbent tank contractor is AECOM-led Washington River Protection Solutions, which like CH2M, is working on an extension that could run through September 2020. The current business, including the latest extension, is worth an estimated $6.8 billion to WRPS since October 2008.
The new contract, for managing 56 million gallons of radioactive waste in 177 underground tanks and preparing the material for eventual vitrification at Bechtel’s Waste Treatment Plant, is probably several months away, Doyle said. He did not specify why it is taking longer than Central Plateau.
The No. 4 procurement priority at the Hanford Site is a potential $1 billion deal to run the 222-S Laboratory. Work is now split between a Veolia subsidiary, which provides laboratory analysis and testing of tank wastes, and WRPS, which does maintenance, support services, and other work as part of its tank operations.
Participants at the ETEBA conference in Knoxville asked when the draft request for proposals will be issued for cleanup of the nearby Oak Ridge Site, Doyle acknowledged. The Energy Department said in July it expected to have a draft RFP out by Labor Day.
“We understand that the community here is looking for that,” Doyle said. “We are working it.”
AECOM-led UCOR expects to finish decontamination and demolition of facilities at the East Tennessee Technology Park (ETTP) by the time its current nine-year, $3.2 billion contract ends in July 2020.
The next contract, which could be worth $6 billion, will shift attention toward remediation of contaminated areas of the Y-12 National Security Complex and the Oak Ridge National Laboratory. Speakers during the ETEBA conference noted the next round will include more work at classified areas where security requirements are tighter. Doyle did not venture a guess on when DOE would issue the Oak Ridge solicitation.
During the Thursday procurement webinar, some participants urged the Office of Environmental Management to continue publishing its schedule of major procurements during the year. The webinar participants said while the timetables in the schedule often prove overly optimistic, they do give the contractor community some insight into DOE’s procurement priorities.
Doyle acknowledged that the latest version of the schedule, issued in May, is outdated. The Environmental Management office hoped to have issued a couple of big contracts on it by now, he said.
