DOE awards 2 cleanup contracts
YAKIMA – After months of delays, the U.S. Department of Energy awarded two contracts valued in the billions of dollars Wednesday to clean up portions of two nuclear sites in Washington and Idaho.
A $1.9 billion contract was awarded to Washington Closure LLC, a team of five companies led by Boise-based Washington Group, to clean up the 210-square-mile Columbia River corridor at south-central Washington’s Hanford Nuclear Reservation.
A separate $2.9 billion contract was awarded to the team of CH2M Hill and Washington Group to treat and dispose of radioactive waste at the Idaho National Laboratory. CH2M Hill is based in Denver.
Both contracts run through 2012, the Energy Department said in news releases.
The work covered under the river corridor contract primarily involves removing radioactive and chemically contaminated soil from the shoreline, demolishing and sealing Hanford’s nine nuclear reactors, and cleaning up an area at the south end of the 586-square-mile reservation.
The government’s independent cost estimate for the work was about $3 billion, but the contract was awarded at about $1.9 billion over seven years.
The contract includes incentives to stay in budget. For every dollar the work comes in under budget, the company will receive an additional 20 cents, but the company will lose 20 cents of its fee for every dollar in increased expense, according to the release.
“We have a talented team that has a lot of creative ideas, and we have an incentive package we believe will help us to get the job done,” said Jack Herrmann, vice president of communications for Washington Group’s energy and environment business unit.
The contract award follows two years of disputes among bidders, workers and the Energy Department.
Bechtel Hanford, a subsidiary of Bechtel National, began managing the removal of contaminated soil and the cocooning of nuclear reactors in 1994. The contract was expanded and rebid in 2002.
The Energy Department awarded the contract a year later to a group led by Washington Group, but losing bidder Bechtel Hanford successfully challenged that award. The Energy Department then reopened the bidding process last summer, only to see new delays.
Hanford workers complained that the plan called for removing them from the Hanford Site Pension Plan after five years, forcing them to transfer to the contractor’s pension plan. The provision was intended to reduce long-term liabilities to the federal government, which manages the Hanford pension plan.
Small businesses also complained that they were being left out of the work and asked that the contract be broken up.
Under the new contract, employees of Hanford contractors handling the work will be able to continue to participate in the federal pension plan. In addition, 60 percent of the work must be subcontracted out, with 50 percent of that going to small businesses.
In the end, Washington Group and Bechtel National joined forces with CH2M Hill, Eberline Services and Integrated Logistics Services to win the contract award. They will take over the work in 90 days.
In addition to treating and disposing of radioactive waste, the contract to clean up Idaho National Laboratory involves managing nuclear fuel, dismantling nuclear reactors and other buildings, and additional environmental remediation.