Bechtel National gives up its incentive pay for second half of 2012

By Annette Cary, Tri-City HeraldApril 1, 2013 

Bechtel National has voluntarily given up its incentive pay for the second half of 2012.

It was eligible to receive up to $6.3 million from the Department of Energy for its work to build the Hanford vitrification plant from July 1 through Dec. 31. It also had been eligible to receive $6.3 million in the previous six months, but DOE awarded it about half of that.

"During the second half of 2012, the project was in a state of evolution," Bechtel said in a statement. "(Bechtel) was willing to forego its fee for the period as a gesture of good faith in a way that keeps the project moving forward while demonstrating our commitment to the mission."

DOE ordered construction work ramped down or stopped at the plant's Pretreatment Facility and High Level Waste Facility in the second half of 2012 until more was known about technical issues that could affect the plant's safe operations.

In September, Energy Secretary Steven Chu spent several days in the Tri-Cities with a hand-picked group of experts to consider vitrification plant issues, primarily those associated with parts of the plant that will be too radioactive for workers to enter after work starts to glassify high-level radioactive waste. The waste is left from the past production of plutonium for the nation's nuclear weapons program.

In November he announced a plan to create more scientific teams to drill down on specific technical issues and make sure all technical issues had been identified. One of the members of Chu's team said then that some of the work to resolve technical issues could take several years to close out.

Among the most time-consuming is to perform full-scale mixing testing on some of the plant's tanks that will hold high-level radioactive waste to make sure the waste stays adequately mixed.

"We are mutually invested with DOE to make the final technical decisions and ensure the safe, efficient and compliant construction and operations," Bechtel said.

Bechtel is reimbursed for expenses to build and commission the vitrification plant. It also is rewarded for completing certain parts of the plant.

In addition, it may receive pay every six months based on a performance evaluation and measurement plan.

The plan covers Bechtel's success in meeting cost and schedule goals and also measures technical performance, which includes engineering, quality assurance, improvement in nuclear safety and other areas.

For the first half of 2012, DOE gave Bechtel National its lowest award payment to date, $3.1 million of a possible $6.3 million.

The payment was based on a low rating that at the time DOE said reflected a lack of closure on the path forward to address and correct issues. The rating reflected a decline in performance in engineering, quality management and procurement performance, according to DOE.

For the second half of 2012, there reportedly was disagreement within DOE on how well Bechtel met its performance evaluation and measurement plan goals.

A determination of what Bechtel should be paid was not completed for the last six months of 2012 after DOE accepted Bechtel's offer to give up its incentive pay.

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