Project Receives a Boost in FY’15 Budget
Kenneth Fletcher
WC Monitor
3/21/2014
After protracted talks on a path forward for commissioning and startup of the Salt Waste Processing Facility, contractor Parsons has submitted to the Department of Energy a cost-share proposal that is believed to be the company’s ‘best and final offer’ for the startup work, WC Monitor has learned. The proposal will soon be sent to DOE Deputy Secretary Dan Poneman for review. DOE and Parsons reached an agreement-in-principle last June on the construction portion of the plant, with the next step in contract talks an agreement on startup. But the parties still have not been able to reach an agreement on that portion, though DOE’s fact finding process for the talks begin in September, and formal negotiations began in December. Reviews have warned that delays beyond the fall of last year could lead to issues at the project.
The SWPF is part of DOE’s plans to greatly increase the rate of liquid waste processing at the Savannah River tank farms in order to support high-level waste tank closure. However, DOE and Parsons have had to negotiate a new contract for the project since Parsons submitted a revised estimate-at-completion in March 2012. That increased the project’s total cost by more than $400 million largely due to subcontractor delays in delivery of key components, which breached the cost cap and made a new contract necessary. The new agreement reached last year covered only construction and pushed out completion of the facility from 2014 to late 2016, with commissioning and start-up to be covered by a future agreement. Parsons this week referred request for comment to DOE, which did not respond.Will Delay Hurt Commissioning Work?
A recent DOE Construction Project Review called for completion of commissioning and startup talks by Oct. 31, 2013, in order to “prevent further deterioration of critical resources necessary to transition from construction to operations,” adding that further delay could “adversely affect both project cost and schedule performance with loss of experienced commissioning and test personnel anticipated” (WC Monitor, Vol. 24 No. 38). But Ken Picha, the Office of Environmental Management’s Deputy Assistant Secretary for Tank Waste and Nuclear Materials Management, said in January that had not been an issue (WC Monitor, Vol. 25 No. 2). “Our [Federal Project Director] hasn’t mentioned anything about an imminent loss of folks. I think they were being prudent in their recommendation or admonition to try and get things wrapped up as soon as we can, but I know that we would be informed if there was imminent loss of some of the key folks,” he said.
DOE Proposes $15M Increase for Construction Funds
Meanwhile, the SWPF saw a boost in funding for construction in the Department’s Fiscal Year 2015 budget request, the details of which were released this week. DOE requested $107 million for construction of the plant for FY’15, about $15 million more than the current enacted level. It also requested $28 million in FY’15 to support other project costs, about $5 million less than the enacted level. However, due to the lack of a startup plan, the budget did not forecast funding needs beyond FY’15. “An Independent Government Cost Estimate is currently being conducted,” the budget request states. “When negotiations with the contractor for commissioning are also completed, the project will be rebaselined and a new cost and completion date will be established.”
