Fluor Daniel Falls Short, Say Doe And Internal Studies Hanford Contractor Over Budget And Late, With Some Work Not Completed; Corrections Called For By Dec. 1

The Hanford Nuclear Reservation’s lead contractor failed to live up to expectations in its first year managing the site under a contract that pays for actual performance rather than set fees, according to reviews by both Fluor Daniel Hanford and the federal Energy Department.

The DOE review, released publicly on Wednesday, said Fluor Daniel’s team was $20.7 million over budget - or 3 percent - on cleanup projects and that 28 percent of fiscal 1997’s cleanup milestones had been completed late or remained undone.

Fluor Daniel is supposed to have a detailed fix-it plan ready by Dec. 1.

Fluor Daniel took over from Westinghouse Hanford Co. last year. It manages many projects on the DOE’s Hanford site, which for four decades made plutonium for nuclear weapons. Most of the work involves cleanup of nuclear and other wastes.

Fluor Daniel did a self-evaluation at the request of U.S. Sen. Patty Murray, D-Wash., in August. Energy Secretary Federico Pena then directed his agency to conduct its own review.

Fluor Daniel gave itself an overall “good” rating on most of its performance. But it acknowledged in its report that “good” wasn’t good enough.

“In the DOE system, Good Performance is not acceptable for its major contractors over the long haul. Good Performance recognizes that deficiencies exist and that DOE expects that these deficiencies will be corrected,” Fluor Daniel’s review said. “It has been a difficult year and Fluor Daniel Hanford has not met its own expectations for success. The (Fluor Daniel) team is totally dedicated to improving its performance.”

Some broad themes emerged from both reviews, which looked at dozens of issues:

Fluor Daniel and DOE both envisioned a strong leadership role for the contractor in supervising the 13 companies on its team. But managing Hanford is more complicated than Fluor Daniel expected. Gaps in supervision materialized, and DOE consequently got more involved sometimes than it had intended.

The DOE rated Fluor Daniel’s performance as marginal overall. The company “appears to have underestimated the size and complexity of the job and have not understood the drivers for DOE positions and actions,” the DOE review said. “During the first year, (Fluor Daniel) has not always taken strong charge of their responsibilities.”

Overall, Hanford’s cleanup work appears behind schedule on some matters and slightly over budget, according to DOE. But Hanford has always struggled with those problems under all its past contractors.

Worker productivity is good, but morale is low.

Fluor Daniel has failed to communicate well with both the DOE and the public.

Poor communication “was the single largest cause of most failures during the first year,” the Fluor report said. “Communication of successes as well as failures was ineffective. Our communications program was viewed as reactive rather than proactive - neither listening to the (DOE’s) or the communities’ issues nor successfully addressing them.”