Richland — The Department of Energy has notified Mission Support Alliance that it will extend its contract to provide support services across the Hanford nuclear reservation for three more years.

The contract extension is valued at an estimated $950 million.

Mission Support Alliance began work under a five-year contract, with a three-year and then a two-year extension option for a total of 10 years.

The initial five-year contract period ends May 25, 2014.

With about a year and a half left on the five-year contract award, DOE needed to either start work on rebidding the support services contract or on exercising its option for the first extension.

“Clearly, MSA is doing a very good job,” Doug Shoop, deputy project manager for the DOE Hanford Richland Operations Office, said Monday. MSA is a limited liability company formed by Lockheed Martin, Jacobs Engineering Group and WSI, formerly Wackenhut Services.

DOE is pleased with MSA’s good safety record and the numerous efficiencies it has found to provide services across the state, he said.

MSA told employees in a memo Monday that it had saved the federal government more than $110 million.

MSA holds a first-of-a-kind contract for the entire DOE complex, DOE officials have said.

As Fluor Hanford’s contract expired, DOE broke its assignment into two projects, hiring CH2M Hill Plateau Remediation Co. to take over central Hanford cleanup and groundwater operations and hiring MSA to provide sitewide services.

That includes utilities, roads, information technology, operation of the HAMMER training center, security, fire services, site business management, information management and portfolio management.

DOE wanted to have a contractor solely focused on such infrastructure matters to match the right size of infrastructure to the work being done and improve processes, Shoop said.

MSA found efficiencies, such as creating a central warehousing system rather than having each Hanford contractor run a separate warehouse system, Shoop said.

Fewer people now are needed to store and distribute supplies and equipment than previously, he said.

MSA also has focused on information technology improvements, including transitioning to a computer system that relies on the cloud and small computer desktop components called “thin clients” that communicate with a centralized server.

Information no longer is stored or processed on personal computers with the new system.

The new system reduces hardware costs and improves energy efficiency.

In addition, MSA has switched Hanford to a voice over internet protocol, or VOIP, system to replace its antiquated phone system.

That’s allowed some buildings to be shut down and increases energy efficiency. Shoop said.

More cost savings are expected from a recent switch of some work done by Pacific Northwest National Laboratory to MSA, Shoop said.

All 10 areas that MSA has taken over — such as dosimetry, cultural resources and environmental and other monitoring — will be done at the same cost or at less cost by MSA, said Frank Armijo, MSA president.

“We reduced the active footprint and ensured critical services like water, power, roads and sewer services are right-sized and appropriate for 2015 and beyond,” Armijo said in a memo of thanks and congratulations to employees.

MSA has made changes as DOE prepares to complete most environmental cleanup of the land along the Columbia River by 2015.

Part of the goal of shrinking the size of Hanford is to save money on infrastructure, including roads, water, fire protection and electrical service.

MSA expects to retain the same number of firefighters but could close two of its four fire stations, Armijo said.

At the same time it will need to modernize services such as water supplies and increase power for future cleanup operations, such as the start of operations at the vitrification plant, he said.

Some of the site’s infrastructure is 50 or 60 years old, Armijo said.

MSA recently began operating a new sewage treatment center in central Hanford, which includes the 200W Biosolids Handling Facility and Evaporative Lagoon.

The portfolio management of the MSA budget is continuing to mature, Shoop said.

MSA is assigned to break Hanford work into discrete pieces to help DOE with “what if” scenarios as it looks at how to manage its annual budgets.

MSA is proud not only of reducing energy use, but also of reducing the number of vehicles in its fleet and using more than 20 percent hybrid vehicles, he said.

Part of MSA’s success has come from developing a customer service culture that employees have adopted with innovation and teamwork, he said.

It’s used the Lean Six Sigma program to take a look at how work is done, finding the steps that are not valuable and streamlining work, he said.

MSA started work at Hanford with 2,100 employees, which grew to 2,200 employees as MSA supported contractors doing work with $1.96 billion of economic stimulus money.

Current employment now is 1,700 to 1,800 workers, Armijo said.

MSA also was one of the new Hanford contractors that have provided new employees a 401(k)-style retirement plan rather than the more expensive Hanford pension plan under terms of its contract with DOE.

Details of the contract extension will not be worked out until the final six months of the five-year contract period.

No major changes to the contract terms under the extension are anticipated, Shoop said.