The National Nuclear Security Administration (NNSA) was wrong to withhold about $1 million in wage-related payments under a now-canceled contract to build a plutonium disposal plant in South Carolina, a federal judge ruled Friday.
The agency must now return the money withheld from MOX Services, prime contractor on the unfinished Mixed Oxide Fuel Fabrication Facility (MFFF), and figure out how much to pay the contractor going forward to reflect raises the company gave to 55 employees in 2015, Judge Thomas Wheeler wrote in an order handed down Nov. 9 in the U.S. Court of Federal Claims.
The NNSA has until Dec. 11 to inform the court how much it will pay MOX Services to amend the withholding, according to Wheeler’s order on a motion for summary judgment filed by MOX Services in July.
Wheeler sided with the company for procedural reasons, writing that the NNSA docked payments to MOX Services without any official notification, per federal law, that the government would disallow any contract costs associated with the raises.
“[T]he undisputed facts show that the Government failed to follow mandatory procedures for noticing a disallowance,” Wheeler wrote.
In 2013, before the NNSA decided to cancel the plant, one of MOX Services subcontractor-owners, CB&I, acquired another, Shaw. In 2015, CB&I gave raises to 55 former Shaw employees. The raises were part of a broader effort to match the salaries and job titles of former Shaw employees with those of comparable CB&I employees.
The NNSA said CB&I did not document any justification for those raises and, in 2017, started withholding a portion of the money owed to the company under the MFFF prime contract. The company said it provided the agency with all the existing documentation concerning the raises.
MOX Services was building MFFF to turn 34 metric tons of weapon-usable plutonium into commercial reactor fuel under a 2000 arms control pact with Russia. The NNSA canceled the contract Oct. 10; it plans to use another approach to eliminate the plutonium and to convert the plant to produce nuclear-warhead cores.
