Firm must pay $65 million in INEEL suit

BOISE – A defunct subcontractor was ordered Friday to pay more than $65 million for its botched attempt in the late 1990s to clean radioactive waste at the Idaho National Engineering and Environmental Laboratory.

U.S. District Judge B. Lynn Winmill rejected all defenses posed by Lockheed Martin Advanced Environmental Systems Inc. in the lawsuit by sister company, Lockheed Martin Idaho Technologies Co., over cleanup at the so-called Pit 9 area.

In his 97-page decision, Winmill found that the environmental systems company “failed to progress with work, failed to give adequate assurances that it would perform in the future and failed to adequately explain its failure to progress.”

The ruling followed a four-month trial last year.

Calls to attorneys for both companies were not immediately returned.

Winmill ordered the company to return $54.4 million it received as payment on its subcontract with the technology company, which ran INEEL from 1994 through September 1999.

It must also pay 12 percent interest on that money for the past six years. Winmill also ordered the subcontractor to cover the estimated $11.8 million it will cost to decontaminate and decommission the facilities at Pit 9.

Lockheed Martin Advanced Environmental Systems was created by Lockheed Martin Co. to undertake the cleanup of the pit, a 1-acre tract where material from nuclear weapons production during the Cold War was buried.

Lockheed Martin Idaho Technology, another Lockheed Martin subsidiary that held the contract to run INEEL, gave its sister company the $179 million contract to come up with a method of safely retrieving the waste and preparing it for permanent disposal at a site outside Idaho. It paid $54.4 million on the agreement but claimed it got nothing in return and finally fired the environmental systems company in June 1998.

The subcontractor contended, among other things, that it was subjected to an unreasonable schedule, ran into previously unknown problems that made the project commercially unfeasible and was not given proper technical direction.

Winmill said he found no evidence to justify those claims or any others made by the subcontractor.

Energy Department spokesman Tim Jackson said the agency was reviewing the decision.

Since Lockheed Martin lost the INEEL operating contract to Bechtel in 1999, Pit 9 has been successfully cleaned up – for $80 million – and work was expected to begin in several months on cleaning up Pit 4. The price tag for work on that half-acre tract is more than $200 million.

Eventually, all the radioactive and hazardous material that was buried on the 88-acre radioactive waste management complex up to 1970 will be removed.