By George Lobsenz
In a contract award that comes at a critical juncture for the controversial project, the Energy Department said yesterday it has selected a consortium led by URS Corp. to help complete the design of the proposed Yucca Mountain nuclear waste repository and support DoE’s effort to get Nuclear Regulatory Commission approval to build and operate the underground disposal facility.
URS, which has seen its DoE contract work mushroom since buying Washington Group International Inc. last year, will team with Shaw Environmental and Infrastructure Inc. and Areva Federal Services Inc. on the management and operations (M&O) contract to oversee an estimated $2.5 billion in work on the repository project.
The consortium, called USA Repository Services (USA-RS), will get an initial five-year contract and DoE will have the option of extending it for another five years, meaning it could run through March 2019–about when DoE hopes to open the repository to spent fuel from U.S. commercial reactors.
But while potentially staying 10 years at Yucca, URS and the other companies in USA-RS will not be eligible to bid on any of the huge construction contracts that DoE plans to offer for the repository.
The department said that is because the winning M&O contractor also will be responsible for helping DoE’s Office of Civilian Radioactive Waste Management (OCRWM) manage the competitive bidding process that will be used to pick the construction contractors.
At the same time, DoE emphasized in its request for proposals on the M&O contract that OCRWM would be in charge of the construction contractors, and that the M&O would only provide support for DoE’s construction management oversight.
DoE is hoping that its direct oversight of the Yucca construction contracts will help the project stay on schedule and budget–unlike many of the contractor-managed DoE construction projects that have seen huge delays and cost overruns in recent years.
But while it will not have a direct hand in building the project, USA-RS will play a major role in DoE’s effort to get an NRC license to proceed with Yucca, which is crucial to the plans of U.S. utilities to build new reactors. Critics question how the industry can expand if there is no permanent disposal site for thousands of tons of spent reactor fuel now piling up at commercial nuclear plants.
DoE was supposed to open Yucca in 1998, but technical, legal and funding problems have slowed the department’s efforts to move forward on its licensing application to NRC, which the department finally submitted this summer.
USA-RS will be on the hot seat with DoE in the NRC licensing proceedings, which will turn on whether DoE can show that its repository design can meet federal standards on preventing the premature leakage of contamination from Yucca into groundwater.
And if NRC grants a license, USA-RS and DoE will face almost certain litigation by Nevada and other Yucca opponents, who have tried to block the project by attacking the credibility of the groundwater modeling and other technical data that USA-RS will be mainly responsible for marshalling in support of DoE.
In that respect, USA-RS may inherit problems from Bechtel SAIC LLC, the contractor which has operated Yucca Mountain for DoE since 2001. During its tenure, the consortium led by Bechtel and SAIC [SAI]. repeatedly ran into difficulties over quality assurance questions raised about some of its data, with allegations resulting in a DoE stop-work order to Bechtel in late 2005.
More recently, DoE has had to overcome a controversy over the apparent falsification of Yucca quality assurance data by U.S. Geological Survey scientists working on the project.
But while the Yucca contract is likely to be a headache, it represents another in a series of big nuclear cleanup contracts snared by URS’ Washington Division in association with Areva, the state-owned French nuclear services giant. URS and Areva also led teams winning a major waste cleanup contract at DoE’s Hanford site in Washington state earlier this year and the massive management contract for the U.K. government’s heavily contaminated Sellafield site.
In picking USA-RS for the Yucca contract, department officials said the consortium beat out two other teams bidding for the project, but declined to identify the losers.
However, DoE documents show interest was shown by many of the usual group of companies that seek DoE nuclear work, including Bechtel, CH2M Hill, Fluor Corp., Babcock & Wilcox Technical Services, Battelle, EnergySolutions, Jacobs Engineering, Parsons, Northrop Grumman [NOC], the current operator of the nearby Nevada Test Site.
Department officials said USA-RS would be able to earn a maximum fee of $122 million over the life of the contract if it was extended for 10 years.
DoE documents show that USA-RS will have the opportunity to earn a maximum of $84.7 million in the first five years of the contract. The documents set a ceiling of $58.7 million in available fees for the optional five-year extension, although bidders were to propose to DOE the amount they wanted to earn in the second five years.
Some industry sources have suggested that in structuring the USA-RS contract as a management “support” contract, DoE was seeking to pave the way for the possible creation of a new government entity that will take over management of all of DoE’s far-flung nuclear waste disposal responsibilities.
The Energy Daily, a sister publication of Defense Daily, reported in February that DoE officials had developed a proposal to re-organize U.S. nuclear waste management work under a public corporation, and that the proposal had been sent to the White House for vetting.
Sources said the plan would create some form of public corporation or federal authority, along the lines of the Tennessee Valley Authority or Bonneville Power Authority, with responsibility for the so-called “back end” of the U.S. nuclear fuel cycle.
That would include the Yucca Mountain; DoE’s Global Nuclear Energy Partnership and any other U.S. spent fuel reprocessing initiatives; and any future efforts to collect and store high-level waste on an interim basis until Yucca is opened, sources say.