Todd Jacobson
NS&D Monitor
3/07/2014
Nearly 14 months since the National Nuclear Security Administration first selected Bechtel-led Consolidated Nuclear Security for its Y-12/Pantex consolidated management and operating contract, transition to the new contractor has resumed. However, Babcock & Wilcox-led Nuclear Production Partners—which three times protested the NNSA’s selection—declined comment this week on its plans, leaving the door open that it could continue to challenge the award, perhaps in the U.S. Court of Federal Claims. Such a move, however, would not guarantee a stop to transition.
The transition period is expected to last four months, meaning CNS would formally take over the contract in July. CNS started transition for about 10 days in January of 2013 until B&W first protested the contract. “The CNS team submitted a very strong and credible solution for managing and operating the Pantex and Y-12 sites, and we are eager to begin implementing our proposal together with the dedicated employees of Pantex and Y-12,” CNS Executive Officer Jim Haynes said in a statement. “We look forward to partnering with the communities of Amarillo and Oak Ridge.” CNS is made up of Bechtel, Lockheed Martin, ATK Launch Systems, SOC LLC, with Booz Allen Hamilton and General Atomics as subcontractors.
Additional Members of Executive Team Announced
In addition to Haynes, CNS announced several other members of its executive team. Booz Allen Hamilton executive Michael Jones will head up transformation for the contractor, Lockheed Martin executive Darrell Graddy will lead mission support, and Bechtel official Carl Strock, who is currently serving as the UPF Project Director for B&W Y-12, will assume the same position for CNS. CNS spokesman Jason Bohne said longtime Bechtel executive Chris Midgett will head up transition for the contractor, with Glenn Kizer (Y-12) and Mac McNeil (Pantex) serving as his deputies at each site. “Our team has maintained a high state of readiness to effect a smooth transition and we are ready to begin work with the NNSA,” Haynes said. “We remain committed to high standards of safety, security, and efficiency as we deliver our work during transition and throughout the length of our contract.”
B&W Mum on Plans
B&W-led Nuclear Production Partners has not commented on its plans since the GAO released its decision denying its latest protest late last week. At the time, B&W Technical Services Group President George Dudich did not rule out continuing to fight for the contract. “Each of the NP2 protests raised issues that our team believed were valid,” Dudich said. “While we are disappointed with the GAO decision, we will evaluate the decision and consider our options. The B&W-led teams currently in place at Y-12 and Pantex remain focused on operating both sites safely and securely.”
But while transition has begun, B&W has been silent, and industry officials say the company is waiting for the redacted version of GAO’s protest decision to be released, which could come next week. Because of a protective order, only lawyers involved in the protest have read GAO’s decision, but key decisionmakers, like Dudich, are believed to have not read it yet. “It’s pretty easy to understand why they’d be waiting. A decision like that, you’d want to really see what the GAO said, beyond what the lawyers may be telling you,” an industry official told NS&D Monitor.
Plus, the industry official noted that with transition already underway, B&W might not gain anything by moving quickly toward a decision to continue to battle the NNSA over the contract. B&W spokeswoman Aimee Mills declined to comment on the company’s plans, but confirmed that company officials had not read the protest decision. “To my knowledge no one has read it,” she said.
‘A Pretty Big Hill to Climb’
Nuclear Production Partners argued in its latest protest that NNSA unfairly allowed CNS to alter its proposal, made mathematical errors in calculating the cost savings contained in its bid, and improperly evaluated CNS’ key personnel. In a statement, the GAO said it “concluded that the agency’s corrective action was consistent with the requirements of the Federal Acquisition Regulation and properly limited to address the specific defects in the prior source selection process. In addition, our decision rejected NPP’s various complaints about the substance of the agency’s evaluation and the source selection decision.”
Industry officials have suggested that B&W would have a tough time continuing its fight. While it could seek help in the U.S. Court of Federal Claims, which handles protest disputes, the company has a high bar to clear to first get an injunction stopping transition and then winning its case. “Going to federal court is an action that can be taken but think of what that says. It says the NNSA got it wrong twice and the GAO got it wrong twice. That’s a pretty big hill to climb,” the official said.
Hinting About the Courts?
In the past, however, B&W has hinted that it could seek refuge in the federal courts. In a May 30 letter to Contracting Officer Leticia Barela raising issues with the NNSA’s corrective actions after its first protest was upheld by the GAO, NP2 Chief Operating Officer Mary Pat Salomone suggested the courts could take a different view on one of B&W’s main claims, that initial Source Selection Authority Michael Lempke unfairly raised the scores of CNS during his evaluation because of his previous experience with Bechtel at the Office of Naval Reactors.
Bob Raines replaced Lempke as the SSA when the NNSA made its second award to CNS in November. “While GAO found that the SSA’s reliance on his personal knowledge to increase the corporate experience rating for CNS was proper, it is far from clear that the U.S. Court of Federal Claims would take the same view, especially in light of the [sic] these and other facts specific to the case,” Salomone wrote. “To an outside observer, the sequence of events, including the appointment of the SSA after completion of the evaluation, the SSA’s ‘re-evaluation’ and selection decision during the eight day period, and the SSA’s ultimate reversal in offeror rankings by increasing three of eight CNS adjectival ratings and applying additional discrimators in favor of CNS, could be viewed as highly unusual.”
