Hanford contractor earns $3.1M for vit plant; lowest award payment yet

By Annette Cary, Tri-City HeraldOctober 1, 2012 

Bechtel National has earned its lowest award payment yet for work on the Hanford vitrification plant, according to information from the Department of Energy.

It was eligible to earn $6.3 million for work on the project for the first six months of this calendar year, but DOE gave its contractor $3.1 million or just less than 50 percent of the possible award payment.

The award was based on ratings for cost and project management, both of which came in at just under 50, or "satisfactory," on a scale of 1 to 100. Any score from 1 to 50 is rated satisfactory.

The low rating "reflects the lack of closure on the path forward to address and correct issues," said Carrie Meyer, spokeswoman for the Department of Energy.

The project management score was brought down by a numerical rating of 5 for engineering and a numerical rating of 45 for nuclear safety.

The cost score was brought down by a numerical rating of 20 for factors that included the estimate at completion, management reserve funds and variances.

"We accept the Department of Energy's fee determination and are working closely with the department on the issues," said Suzanne Heaston, Bechtel spokeswoman.

Bechtel is building and commissioning the $12.2 billion plant to treat up to 56 million gallons of radioactive waste now held in underground tanks for disposal. The waste is left from the past production of plutonium for the nation's weapons program.

Award payments are intended to provide motivation for excellence in contract performance, Meyer said.

The award money recognized an improvement in safety and health performance, which rated 85 or "very good," and positive steps taken in nuclear safety and quality culture, which rated a 65 or "good," Meyer said.

But it also recognized a decline in performance in engineering, quality management and procurement performance, she said.

DOE's Hanford Office of River Protection is working with Bechtel to identify and correct the causes of the low rating," Meyer said.

The previous rating, for the past six months of calendar year 2011, was 71.3, and the cost performance rating was 57, both of them falling in the "good" category. Then Bechtel collected an award payment of almost $3.9 million out of a possible $6.3 million.

Among events in the first six months of 2012, DOE had instructed Bechtel to develop a proposed new cost and schedule estimate for the vitrification plant in February, as it became apparent the current cost estimate of $12.2 billion and planned start of operations in 2019 likely were unrealistic.

Then in June, DOE said the new cost and schedule estimates could not be prepared yet because technical issues that could affect the safe and efficient operation needed to be addressed.

In May, an audit completed by the DOE Office of Inspector General said tanks installed in the vitrification plant did not always meet quality assurance or contract requirements.

In March, DOE sent Bechtel a letter saying it was concerned about the cumulative impact of issues it had identified. That included the most recent issue, DOE's surveillance of the project's management of design and safety margins, which make sure the design has enough conservatism for the plant to operate as required.

However, DOE also said in June that it was encouraged by steps Bechtel National was making to improve its nuclear safety culture, which includes making sure that workers feel free to bring up technical issues that could affect future safe operations of the plant and that those issues are addressed.

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