CH2M sold. New owner must resolve Hanford conflict of interest

The sale of CH2M has left new owner Jacobs Engineering Group with a conflict of interest at Hanford.

It is negotiating to divest its part ownership of one of the Hanford nuclear reservation’s prime contractors after its purchase of CH2M became final on Monday, according to Mission Support Alliance.

As part of the deal, Jacobs acquired the CH2M Hill Plateau Remediation Co. contract, a prime contract covering central Hanford environmental cleanup, cleanup of contaminated groundwater and some remaining work at Hanford near the Columbia River.

But the owners of the Mission Support Alliance are prohibited under their Department of Energy contract from conducting work under other key contracts.

Mission Support Alliance provides sitewide services at Hanford, including security, emergency response, fleet and road maintenance, utilities and information technology.

It also provides portfolio management, which helps DOE make informed decisions on environmental cleanup work across all contracts to save money, evaluate alternatives and meet legally required cleanup deadlines and standards.

Jacobs is in talks with Leidos, the key owner of Mission Support Alliance, and its other owner, Centerra Group, to resolve its conflict of interest, according to Mission Support Alliance.

Mission Support Alliance’s contract, valued at about $3 billion, expires in May 2019. The contractor employs about 1,900 people.

CH2M Plateau Remediation Co.’s contract is set to expire in September 2018. With only a year for DOE to seek bids on a new contract and award it, DOE could offer CH2M a contract extension.

The CH2M contract was valued at $4.5 billion over 10 years when it was awarded, but that did not include $1.3 billion in economic stimulus money for work under the Obama administration. CH2M employs about 1,700 people.

CH2M shareholders voted on the sale to Jacobs on Dec. 13, with about 96 percent in favor. In August, Jacobs reached an agreement to purchase CH2M for cash and stock worth $3.27 billion, or $2.85 billion with CH2M debt excluded.

Jacobs operates in more than 25 countries, providing technical, professional and construction services.

This story was originally published December 20, 2017 at 3:46 PM with the headline "CH2M sold. New owner must resolve Hanford conflict of interest."