The Department of Energy’s National Nuclear Security Administration (NNSA) should stop managing the Y-12 National Security Campus and the Pantex Plant under a single contract, a Washington, D.C.-based group representing localities that host Department of Energy nuclear-weapon sites said Tuesday.
“[D]oes one contract between two very different sites still make sense?” Seth Kirshenberg, executive director of the Energy Communities Alliance, wrote in a Sept. 8 letter to NNSA Administrator Lisa Gordon-Hagerty.
Kirshenberg pointed to the NNSA’s
latest annual appraisal of Consolidated Nuclear Security’s combined site contract, as a result of which the agency said it would re-compete the contract, as evidence that the experiment of combining management of the two facilities had failed. The agency listed various management and safety issues, including a time-card fraud scandal and repeated criticality safety issues at Y-12, among its reasons for pushing the incumbent out.
“The existing [management and operations] contract has existed for the past six years and is not considered to be successful by NNSA,” Kirshenberg wrote. “NNSA stressed safety and other concerns in this notice but there is an underlying belief that contracts that are not renewed due to safety concerns can be deduced to be a failure.”
Kirshenberg also questioned the NNSA’s touted cost savings in combining administrative functions at the two sites, which the Bechtel National-led Consolidated Nuclear Security took over from separate teams led by competitor BWX Technologies [BWXT] in 2014.
“As the contract is not being renewed we don’t know whether the original contract ‘savings’ would have been achieved,” Kirshenberg wrote.
Consolidated Nuclear Security will cede management of Y-12 and Pantex after Sept. 30, 2021, leaving three years’ worth of options on the table. The company’s contract is worth roughly $2 billion annually, and the incumbent wanted to save the NNSA roughly $3 billion in savings over the 10-year life of its contract.
The Government Accountability Office has verified some $515 million in savings under Consolidated Nuclear Security’s contract through fiscal 2018. That was about four-fifths of the amount proposed to that point, according to the GAO report.
Earlier this year, Bechtel National said that combining the previously separate site-management contracts has so far saved the government some $740 million.