March 17, 2014

NEW B&W PROTEST DOCS REVEAL PUSH TO BROADEN Y-12/PANTEX PROPOSALS

By ExchangeMonitor

The National Nuclear Security Administration should allow bidders on its Y-12/Pantex procurement to revise their cost savings proposals to reflect new conditions at the sites, according to a protest lodged by a Babcock & Wilcox-led team last week that paints the existing cost savings initiatives being used in proposals as “fictitious” and the actual cost savings numbers as “stale.” NW&M Monitor obtained a redacted copy of Nuclear Production Partners’ protest last week to the Government Accountability Office, and the 40-page document sheds more light on the latest salvo from unsuccessful bidders on the contract. The NNSA initially awarded the contract to Bechtel-led Consolidated Nuclear Security in January, but the GAO upheld protests by NP2 and a Jacobs/Fluor team, and the NNSA opened “limited discussions” earlier this month with bidders to give more information about their cost savings proposals. In doing so, the NNSA said it would “freeze” the initial proposals made by the three bidders to Sept. 5, 2012, and would not allow any new cost savings proposals or changes to any cost savings plans. In its June 17 protest, NP2 pushed for bidders to be allowed to amend any part of their proposals, arguing that the NNSA’s restrictions violate Federal Acquisition Regulations and create issues with cost savings initiatives and data that were proposed nine months ago. Bidders were allowed to update their proposals with 100 additional pages of narrative and three spreadsheets. “That will not result in a meaningful evaluation of offerors’ proposals,” NP2 wrote in the protest. “This will not result in offerors proposing cost savings initiatives based on reality.”

Of note, the NP2 team said that new budget realities are now facing Y-12 and Pantex with sequestration taking effect, and it said that headcounts at the sites have been significantly reduced since proposals were submitted. It also noted that the estimated cost for the Uranium Processing Facility has risen to as much as $11.6 billion, citing a GAO briefing about the possible cost based on less-than-optimal funding. “Indeed, given the different baselines that are now known to NNSA, offerors would have approached their cost savings initiatives differently and would have revised their cost savings incentive fees to account for increased risk and/or adjusted their proposed projections for cost savings,” the NPP team said.

The NP2 team also continued to take aim at former B&W employee Dan Glenn, whose departure from the company and subsequent appearance on the CNS bid led to a lawsuit and findings that Glenn misappropriated B&W trade secrets, including some information about Y-12/Pantex. NP2’s latest protest notes that Glenn’s misdeeds were largely revealed in January—after Source Selection Authority Michael Lempke completed his evaluation—and suggests later claims by the NNSA that it “may” examine information close-at-hand in making a new selection leaves too much wiggle room for it not to consider the information. “In connection with NP2’s prior protests, NNSA asserted that it properly had evaluated Mr.Glenn for integrity and trustworthiness,” the NP2 team wrote. “The close at hand information now known by NNSA shows that that evaluation was erroneous. Based on NNSA’s responses to questions, NNSA has reserved for itself the right to ignore the information that reflects negatively on CNS proposed Key Person Daniel Glenn. That is contrary to the law.”

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