CB&I AREVA MOX Services, the contractor managing construction of the Mixed Oxide Fuel Fabrication Facility near Aiken, S.C., said in a new letter to the National Nuclear Security Administration that the agency is attempting to terminate the project through a campaign of consistent obstruction.
NS&D Monitor obtained the March 8 letter, a response to the NNSA’s stinging fiscal 2016 performance evaluation of the contractor, from a source on Capitol Hill. It was signed by Rex Norton, the contractor’s vice president of contracts and supply chain management, and addressed to Lance Nyman, the lead contracting officer at the NNSA’s Savannah River Site Office.
“When we first reviewed NNSA’s evaluation narrative last year, we were shocked at the hostile and unbalanced tone of the document, which contained numerous assertions that are at variance with the facts and made no mention of the obstacles NNSA has thrown up to the efficient construction of the facility,” the letter said. It contrasted NNSA’s review with that of the Nuclear Regulatory Commission, which early this month gave the contractor a positive review for its construction of the facility.
The NNSA late last month released the fiscal 2016 evaluation, in which CB&I AREVA earned just 8.9 percent of its possible award fee for the last budget year, in part due to “unsatisfactory” cost, schedule, and technical performance.
“The contractor was unable to balance project technical baseline requirements with other elements of project performance, such as cost and schedule,” the evaluation said, calling the contractor’s claim that the facility is over 70 percent physically completed “patently false.”
The U.S. Army Corps of Engineers projected last year that the facility would cost $17.2 billion to complete by 2048, while the contractor estimates it will cost $10 billion by 2029 – a variance largely attributed to differing assumptions on the escalation of costs throughout the project.
An industry observer told NS&D Monitor previously that the NNSA’s evaluation seemed like “an Obama-era review of a project Obama officials tried ending but Congress repeatedly continued,” indicating that the Trump administration may take a different approach and allow the project to continue.
The White House fiscal 2018 budget outline, released Thursday, makes no specific reference to the MOX project. A more detailed spending proposal is expected in May.
The MOX facility is being built to eliminate 34 metric tons of weapon-usable plutonium under a nuclear nonproliferation deal with Russia. The previous administration tried to terminate the project, proposing in its place an alternative plutonium dilution and disposal method it said would shave off billions and dollars and years of work. However, Congress continued to fund MOX.
“Unfortunately, daily interference and obstruction by NNSA’s Acquisition and Project Management organization continues crippling construction, slowing physical progress, significantly increasing costs, and creating unnecessary delays,” the contractor said in the latest letter.
It gave several examples of these issues, alleging that the NNSA’s commissioning of studies on MOX –presumably on the approach to plutonium disposition – featured “little to no involvement of the contractor to provide input or to perform factual accuracy reviews.” Norton said the agency has changed the MOX contract to prohibit contractor personnel from discussing the project externally and with community groups, which he said is at odds with community relations practices at other NNSA sites.
The letter also noted that the NNSA has required that it approve all construction procurements worth more than $500,000 and equipment procurements more than $150,000, while in the past only those over $15 million required agency approval. “This has significantly hampered the procurement process and resulted in numerous procurements being denied,” it said.
The contractor added that with an appropriate level of annual funding, “we believe we have approximately $3 billion to go to complete the MOX facility” and “would like to work with you to resolve our differences on this project so we can fulfill our contractual obligations to finish the job as quickly and efficiently as possible and place the plutonium disposition facility in service to meet our national security goals.”
CB&I spokeswoman Gentry Brann said by email this week that “the letter does not necessarily reflect the views of CB&I and that we are committed to working closely with the new Administration to ensure a successful completion of the MOX project.”
AREVA Nuclear Materials spokesman Curtis Roberts previously said the company disputes the assertions in the NNSA’s performance evaluation and remains focused on “finding a mutually aligned approach, as requested by Congress, to complete this important nonproliferation project.”
The NNSA did not offer a comment by press time.
