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 company going forward to reflect raises given 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. The judge said NNSA violated federal law by docking payments to MOX Services without providing any official notification that the government would disallow 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 onetime Shaw employees with those of comparable CB&I personnel.
The NNSA said CB&I did not adequately justify 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 salary increases.
MOX Services was building MFFF to turn 34 metric tons of weapon-usable plutonium into commercial reactor fuel under an arms control pact with Russia signed in 2000. The NNSA canceled the MFFF contract Oct. 10; the agency now plans to convert the plant into a factory to produce nuclear-warhead cores, and find another means of disposing of surplus plutonium.
That alternative disposal method is called dilute-and-dispose. The NNSA plans to chemically weaken the plutonium at planned Savannah River facilities, mix it with concrete-like material called stardust, and bury the mixture at the Department of Energy’s Waste Isolation Pilot Plant near Carlsbad, N.M.
