PHOENIX — Major cleanup contractors working across the Energy Department’s weapons complex bemoaned contracting trends at DOE’s Office of Environmental Management that, they say, have made it harder to justify bidding on cleanup work.
“I think there’s still a strong case, but I can tell you, it’s getting more and more difficult every day,” Kenneth Camplin, vice president and chief business development officer for BWX Technologies, said during in a panel discussion at the 2016 Waste Management Conference alongside representatives of eight other DOE contractors.
BWXT has a reliable business backbone in Its virtual monopoly producing reactors for the U.S. Navy via DOE National Nuclear Security Administration contracts, but the company also handles cleanup work for EM. One example is the Fluor-BWXT partnership, DOE’s cleanup prime at the former uranium enrichment site at Portsmouth near Piketon, Ohio
Camplin and other executives worried that DOE cleanup work has become increasingly subject to unpredictable expenses in the past decade or so, including from change orders handed down from the customer, or by increasingly subjective award fee criteria that allows DOE to reduce fees for reasons contractors sometimes struggle to understand.
The Waste Treatment Plant (WTP) Bechtel is building for DOE at the Hanford Site near Richland, Wash., to treat 56 million gallons of waste left over from Cold War plutonium production is the poster child for perilous change orders, according to Michael Graham, a general manager with the San Francisco-based company.
WTP was supposed to come online in 2019, but that plan was scuttled after DOE decided in 2012 that technical challenges were likely to delay processing of more noxious high-level Hanford waste. The plant now will not start treating all the liquid waste until the 2030s, with low-level waste treatment slated to come online by 2022.
“WTP’s been through a lot of changes,” Graham said. “We ought to keep our foot to the floor and get the damn thing done.”
Over at the Savannah River Site, the location of DOE’s other major legacy liquid-waste cleanup, a greater agency emphasis on subjective award fee criteria has worried the site’s prime contractor, Savannah River Nuclear Solutions (SRNS).
SRNS CEO Carol Johnson said the company’s management and operations site contract used to pay about 80 percent of its annual award fees based on objective measures — quantifiable things such as on-time completion of construction milestones — and about 20 percent based on subjective criteria — how well, or not, a federal official believes the contractor performed unquantifiable tasks, such as program management. That mix was “about right,” Johnson said during the panel.
In fiscal 2015, however, subjective fee criteria doubled to cover about 40 percent of the total possible award fee, which is “really hard” to plan for, Johnson said.
Industry representatives also scratched their heads over DOE’s internal bid evaluation criteria, a process into which contractors have little insight, but which can drag out awards.
William Morrison, chief operating officer of EnergySolutions, recalled one proposal DOE took so long to review that “by time contract finally awarded, the person we had identified as key personnel was ready to retire.”
Nevertheless, Morrison, like most of his industry peers on the dais, seemed ultimately optimistic about doing business with DOE. “I don’t think our process here at DOE is broken,” Morrison said.
