The August doldrums in Washington weren’t quite as quiet as in past years, and there was plenty of news during the ExchangeMonitor’s annual publication break. As chronicled in the Weapons Complex Morning Briefing, here are a few stories we’ve been following.
NNSA Sticks With Plan to Increase Plutonium Limit in Los Alamos Rad Lab
To support a manufacturing effort crucial to future U.S. nuclear arms-modernization programs, the National Nuclear Security Administration (NNSA) still plans to drastically increase the amount of plutonium permitted inside a building at the Los Alamos National Laboratory in New Mexico, according to a recently completed environmental review.
In a final environmental assessment dated July 18 and posted online the week of Aug. 1, the NNSA said it will still shift much, but not all, planned analysis of future plutonium pits produced at Los Alamos to the lab’s Radiological Laboratory/Utility/Office Building (RLUOB) from its Plutonium Facility (PF-4).
To support the higher workload at the building, the NNSA plans to increase the amount of plutonium-equivalent material allowed in RLUOB by roughly tenfold, to 400 grams from just under 40 grams. That would allow the Department of Energy agency to install new analytical chemistry and materials characterization equipment in that newer, relatively cleaner facility, rather than PF-4.
Modifying the RLUOB to handle more plutonium would involve installing “additional enclosures and equipment,” the NNSA said. That would take eight to 10 years. In its fiscal 2019 budget request, the agency estimated recategorizing the facility would cost roughly between $210 million and $340 million.
Besides the investment and the time required, the NNSA’s plan requires reclassifying RLUOB as a Hazard Category 3 nuclear facility from its current designation as a radiological facility. Before it could do that, the agency was required under federal law to examine the environmental affects of the reclassification. That Energy-led effort resulted in the just-published environmental assessment, as a result of which the agency was able to issue what is known officially as a finding of no significant impact: a Department of Energy declaration that expanding RLUOB’s plutonium storage capacity would have no great effect on the environment, and that the agency does not have to do any more environmental reviews of its plan.
As recently as 2015, the NNSA contemplated doing much of the Los Alamos National Laboratory’s (LANL) plutonium analysis at PF-4. The facility is supposed to become the lab’s production hub for plutonium pits in 2026, when it is slated to begin cranking out 30 of the fissile warhead cores each year.
BWXT Anticipates No Great Financial Impact After Botching Welds for Columbia-Class Subs
Botched welding jobs on 12 missile tubes for the Navy’s next-generation ballistic-missile submarines should not materially affect tube vendor BWX Technologies’ bottom line this year, CEO Rex Geveden said Aug. 7.
But it is “too early to tell” whether the gaffe will prevent BWXT from winning more subcontracting business from General Dynamics Electric Boat (GDEB), prime contractor for the Columbia-class submarine program, Geveden said on a conference call with investor analysts. The CEO said he expected another award opportunity in the first quarter of 2019.
BWXT self-reported bad welding on the 12 common missile compartment tube assemblies to both GDEB and the Navy during the quarter ended June 30. The company delivered seven balky tubes to GDEB, while another five remain in the vendor’s factory in Mount Vernon, Ind., Bill Couch, a spokesperson for Naval Sea Systems Command, said by email Aug. 7.
BWXT Nuclear Operations built the 12 troubled tubes under a roughly $75 million Block II Common Missile Compartment tube assembly subcontract awarded by GDEB in April 2017. The company is under contract for 26 tubes, Couch said. It expects to finish building the tubes in 2021, according to a press release announcing the Block II subcontract award.
BWXT’s internal inspections were not rigorous enough to catch the bad welds before some tubes shipped out, Geveden said on the call.
“Some welding indications were not caught in the inspection,” Geveden said. “I don’t view it as a welding quality issue, I view it as an inspection technique issue.”
The Navy plans to replace 14 current Ohio-class subs with 12 Columbia-class boats.
The Department of Energy’s contribution to the submarine fleet, the W76 warhead, is slated to be ready by 2020, more than a decade before the first Columbia-class sub would head out on patrol in 2031. The agency’s semiautonomous National Nuclear Security Administration (NNSA) plans to finish its W76 life-extension program in the federal 2019 fiscal year, which begins Oct. 1 and ends Sept. 30, 2019.
During fiscal 2019, assuming Congress passes a DOE appropriations bill by September’s end, the NNSA will start modifying an unspecified number of W76 warheads to create the low-yield W76-2. The NNSA’s share of the low-yield modification is expected to cost $125 million or so over two years. The White House requested $65 million for fiscal 2019, and Sen. Dianne Feinstein (D-Calif.) has said the weapon will cost another $60 million in fiscal 2020.
BWXT Revenue Up, Net Income Down, in 2Q
BWX Technologies on Aug. 6 reported revenue of $439 million for the second quarter of 2018, a 7.1 percent improvement over the $410 million it brought in a year ago.
Net income at the Lynchburg, Va., government contractor came in at $60.7 million ($0.60 per share). That was down slightly from $61.3 million ($0.61 per share) in second-quarter 2017.
The company’s Nuclear Services Group, which includes business with the Energy Department cleanup office and the semiautonomous National Nuclear Security Administration (NNSA), reported operating income of $3.5 million for the second quarter, down from $15.4 million in the same period of 2017. The major difference was a favorable $7.9 million legal settlement for the prior-year period, BWXT said.
Management reiterated its 2018 fiscal guidance for earnings per share of $2.45 to $2.55.
BWXT Technologies is a junior partner on outgoing Los Alamos National Laboratory management and operations contractor Los Alamos National Security. The company is also a junior partner on Lawrence Livermore National Laboratory management and operations contractor Lawrence Livermore National Security.
S.C. Prepares to Defend MFFF in Appeals Court; Says DOE Can’t Wish Plutonium Away With ‘Magic Words’
The South Carolina attorney general has revealed most of the argument he will use to convince a federal appeals judge that a lower court was right to stop the Department of Energy from canceling construction of an over-budget plutonium disposal project at the Savannah River Site.
In an appellee brief filed Aug. 10 with the U.S. Fourth Circuit Court of Appeals, South Carolina Attorney General Alan Wilson defended a U.S. District Court’s ruling in June requiring DOE to proceed with the Mixed Oxide Fuel Fabrication Facility (MFFF), which the agency wants to turn into a factory to produce plutonium nuclear-weapon cores.
Refuting an earlier DOE brief filed with the appellate court, Wilson said the District Court had all the information it needed to order an injunction preventing the agency from halting construction of MFFF, which CB&I AREVA MOX Services is building under a contract with the agency’s semiautonomous National Nuclear Security Administration.
Wilson also maintained that DOE violated U.S. law by announcing plans to close the MFFF before evaluating the environmental effects of an alternative plutonium-disposal strategy. The top South Carolina law-enforcement officer noted DOE was not freed from its obligation to conduct the environmental review simply because it exercised an option, provided to the agency last year by Congress in the 2018 National Defense Authorization Act, to opt out of construction.
In a footnote, Wilson likened that opt-out to using “magic words” that allowed DOE to cancel the project simply by promising Congress the agency had some other way of removing weapon-usable plutonium from South Carolina.
The MFFF was supposed to be done in 2016 and cost about $5 billion. MOX Services now estimates the plant will cost $10 billion to complete by 2029. The Energy Department estimates it will cost $17 billion and take until 2048, and so wants to instead dilute the plutonium elsewhere at Savannah River, then bury the material deep underground at DOE’s Waste Isolation Pilot Plant near Carlsbad, N.M.
The parties are scheduled to present oral arguments in the appeals court on Sept. 27.
Labor Dept. Advisory Group for Sick Nuke Workers Staffed Up Again
After letting it sit empty for most of the first term of the Donald Trump administration, the Labor Department has restaffed a small advisory group that helps the Department of Labor process medical claims from workers sickened at U.S. nuclear-weapon sites.
The Advisory Board on Toxic Substances and Worker Health advises the Labor Department’s Division of Energy Employees Occupational Illness Compensation. Labor Secretary R. Alexander Acosta appointed 12 new members July 16, after allowing the board to go unstaffed after the terms of the previous members expired in February.
The members will serve two-year terms that expire July 15, 2020, a Labor spokesperson said by email Aug. 8.
The new board members are slated to meet this fall, according to the group’s website. There was no date for the meeting at deadline Friday for Nuclear Security & Deterrence Monitor.
The new members, grouped into three categories in accordance with federal regulation, are as follows.
Scientific Community:
John Dement, Duke University Medical Center
George Friedman-Jimenez, Bellevue Hospital Center, NYU School of Medicine
Marek Mikulski, University of Iowa
Kenneth Silver, East Tennessee State University
Medical Community:
Manijeh Berenji, Boston Medical Center
Victoria Cassano, Performance Medicine Consulting
Steven Markowitz, Queens College, CUNY School of Public Health
Carrie Redlich, Yale School of Medicine
Claimant community:
Kirk D. Domina, Hanford Atomic Metal Trades Council
Ron Mahs, International Association of Heat and Frost Insulators and Allied Workers, Local Union 46
Duronda Pope, United Steelworkers
Calin Tebay, Hanford Beryllium Program
Designated Federal Officer:
Douglas Fitzgerald, Department of Labor, director Longshore and Harbor Workers’ Compensation, Office of Workers’ Compensation Programs.
New to the board are: Berenji, Mahs, Mikulski, and Mahs. The rest of the members return from the inaugural board convened in 2016.
The White House created the Advisory Board on Toxic Substances and Worker Health in June 2015, at Congress’ direction. The board is authorized through Dec. 19, 2024, and will automatically disband after that, unless Congress acts. Lawmakers have already extended the board’s sunset date once; the group was originally scheduled to disband in 2019.
Judge Sets Oral Arguments For Nearly $45M in MFFF Fees
The next incremental legal argument in a $200-billion-plus lawsuit over alleged mismanagement of a federal arms-reduction construction project in South Carolina is set for Sept. 11, court papers filed Aug. 1 show.
The arguments were set in an order from U.S. Court of Federal Claims Judge Thomas Wheeler and will cover seven former cases now consolidated into a 2016 lawsuit filed by CB&I AREVA MOX Services: prime contractor for the National Nuclear Security Administration’s (NNSA) Mixed Oxide Fuel Fabrication Facility (MFFF).
The plant, designed to turn 34 metric tons of weapon-usable plutonium into commercial reactor fuel under a U.S.-Russian arms-control pact, is billions of dollars over budget and at least a decade behind schedule. The NNSA and MOX Services blame one another for this.
The arguments scheduled for next month will cover roughly $45 million in MOX Services’ claims over denied costs, withheld fees, and damages from breach of contract.
Wheeler, after oral arguments this spring, ordered the NNSA to return more than $20 million in clawed-back fees to MOX Services. The argument and subsequent ruling arose from a motion for summary judgment the company made last year.
The lawsuit is scheduled to go to trial in 2019, but there could be more motions for summary judgment before then, and therefore additional monetary claims judged ahead of the trial through either briefings or oral arguments.
“Particularly given the number of cases consolidated for a single trial, Plaintiff anticipates filing additional motions for summary judgment as the record supports the same,” MOX Services stated in a July 31 joint preliminary status report.
The NNSA wants to cancel the MFFF. It would use other facilities at Savannah River to process the plutonium into a form that can be stored at the Department of Energy’s Waste Isolation Pilot Plant in New Mexico. The agency would then convert the MFFF for production of plutonium nuclear-warhead cores. South Carolina has sued to block the DOE plan.
SRS Paramilitary Draft RFP Could be Issued This Summer
The Energy Department could issue a draft request for proposals this month for a paramilitary security services contract at the Savannah River Site in South Carolina, according to a recently updated list of major procurements.
The final RFP for the contract, forecast to be worth $1 billion to $3 billion, is expected to go out by the end of this calendar year, the schedule shows. Centerra-SRS holds the current 10-year, $1 billion contract, which expires on Oct. 7, 2019.
The company has indicated it expects to compete for a subsequent contract at the 310-square-mile site, which is home to DOE nuclear weapons and environmental remediation programs, along with the Savannah River National Laboratory. The agreement would include safeguarding assets overseen by the Environmental Management office and DOE’s semiautonomous National Nuclear Security Administration (NNSA).
About three dozen people participated in an industry day last August in Augusta, Ga., to learn more about the potential contract. The Energy Department also received 35 questions last year in response to a request for information.
During a procurement presentation July 31 in Washington, D.C., Norbert Doyle, deputy assistant secretary for acquisition and project management for DOE’s Environmental Management office, stressed the paramilitary nature of the contract, which extends well beyond providing security guards. The Energy Department has indicated the work involves law enforcement at SRS, protective forces, canine handlers for explosive detection, and 24/7 staffing of perimeter barricades.
NNSA Contractor Replaces Retiring Execs
Consolidated Nuclear Security (CNS) replaced three recently retired executives effective immediately, the management and operations contractor for the National Nuclear Security Administration’s main weapons-production sites announced Aug. 6.
The Bechtel-led company appointed Doug Freund vice president for operations support; Ed Rogers vice president for business management and transformation; and Jason Trichel manager of internal audit, ethics, and employee concerns.
Freund, previously at Lockheed Martin Space Systems supporting the U.K.-based Atomic Weapons Establishment, replaces Darrell Graddy.
Rogers has been with Bechtel for two decades, most recently supporting the U.K. Defense Equipment and Support agency. He replaces Doris Heim.
Trichel, replacing Jim Nobles, previously led internal audit and enterprise risk management for energy, investing, and real-estate conglomerate Hunt Consolidated of Dallas.
Earlier this decade, citing the cost-saving potential of the deal, the National Nuclear Security Administration (NNSA) combined the previously separate management and operations contracts for the Pantex Plant in Amarillo, Texas, and the Y-12 National Security Complex in Oak Ridge, Tenn.
CNS won the unified contract in 2014, and the government has since spent about $10 billion on the pact, which including options runs through March 31, 2024. The contractor will be on the job at least through June 30, 2021, under a two-year option the NNSA picked up in late March.
Oak Ridge Security Contract Extended Until End of Year
The Energy Department has extended the contract for the current security provider for the Oak Ridge Reservation in Tennessee through the end of the year.
After a bid protest against the follow-on contract, the Energy Department said Aug. 10 it intends to keep Reston, Va.-based National Strategic Protective Services on the job from Sept. 22 until Dec. 30. The firm currently provides security police and special response teams to protect Oak Ridge, and its employees already have the needed high-level security clearances for the work, DOE said.
“To attempt to do a short-term contract with anyone other than the incumbent could potentially disrupt the protection of the ORR to an extent that would put national security at risk,” DOE said in announcing its intent to do a sole-source contract modification.
National Strategic Protective Services, a joint venture of Triple Canopy and Securiguard, has provided protective force services at Oak Ridge since March 2013.
The company is responsible for protection of Oak Ridge Reservation sites including the East Tennessee Technology Park, the Oak Ridge National Laboratory, and the Joe L. Evins Federal Building, according to the NSPS website.
AECOM Sets Revenue Record in Quarter
Department of Energy contractor AECOM reported a 13-percent rise in revenue in its latest quarter, to $5.1 billion from $4.6 billion a year ago, setting a new quarterly record for the company.
Net income for AECOM’s fiscal third quarter came in at $61 million, or $0.37 per diluted share, down from the year-ago figures of $101 million and $0.64.
The Los Angeles-based engineering and infrastructure company reported a total backlog of $54 billion for the first nine months of fiscal 2018, 16 percent more than the $46 billion reported for the first nine months of fiscal 2017.
AECOM’s Management Services segment, which manages its Energy Department contracts, recorded $936 million in revenue during the quarter, compared to $856 million a year ago. The business pulled in $2.7 billion in revenue for the nine months ending June 30, more than the roughly $2.5 billion for the same stretch of 2017.
Operating income from Management Services for the recent quarter was $66 million, basically flat with the same time last year.
AECOM is a junior industry partner on outgoing Los Alamos National Laboratory management and operations contractor Los Alamos National Security, and a junior partner on Lawrence Livermore National Laboratory management and operations contractor Lawrence Livermore National Security.
Energy Department Taking Comment on Nuclear Safety
The Energy Department is taking public comment until Oct. 9 on a proposal to revise certain regulations for nuclear safety management across its facilities, according to a notice of proposed rulemaking published Aug. 8 in the Federal Register.
“The proposed revisions reflect the experience gained in the implementations of the regulations over the past seventeen years,” according to the notice from DOE’s Office of Environment, Health, Safety and Security. Aspects of the Nuclear Safety Management rule, governing DOE and its contractors, were implemented between 1994 and 2001.
The regulations cover facilities owned or leased by the Department of Energy where radioactive work takes place, such as research, testing, disassembly of equipment, or transporting nuclear material.
The Energy Department wants a successor document with “up-to-date research, data and DOE experience with implementation,” the Federal Register notice says. That would involve improved ways to categorize hazards, approve safety documentation, and approach “the unreviewed safety question process,” now defined by a four-part method including accident probability.
Three public meetings are scheduled near DOE sites during September:
- Sept. 6 at the Albuquerque Marriott in Albuquerque, N.M.;
- Sept. 25 at the Oak Ridge Associated Universities, Pollard Technical Conference Center, in Oak Ridge, Tenn.; and,
- Sept. 27 at Business and Education Building at the University of South Carolina-Aiken, in Aiken, S.C.
The DOE contact for the rulemaking is Garrett Smith with the Office of Nuclear Safety, at [email protected].
The proposed notice of rulemaking passes muster with regulatory reform executive orders issued by President Donald Trump, DOE said in the 16-page document. Trump issued orders in January and February 2017 calling for managing cost of government regulation, and to identify rules in need of updating or elimination. The proposed DOE rule seeks to remove provisions “considered duplicative or of little value,” according to the Federal Register notice.
