By George Lobsenz
The National Nuclear Security Administration (NNSA) yesterday laid out a range of options for consolidating and streamlining its operating contracts for the Energy Department’s nuclear weapons complex, including putting several facilities under one contractor and buying uranium processing and other services from commercial facilities regulated by the Nuclear Regulatory Commission.
NNSA, the semi-autonomous weapons agency within DoE, also said it is considering hiring one contractor to provide particular types of non-weapons services–such as information technology, security or nuclear waste management–for multiple sites to improve efficiency and save money. The agency said this also would enable its site contractors to focus on core weapons production or design missions.
Among other specific changes, NNSA said it is considering:
- Combining management of its Pantex warhead assembly and disassembly plant in Texas with its Y-12 plant at Oak Ridge, Tenn., which handles high-enriched uranium and various warhead components. The two sites are both currently run by consortiums led by Bechtel and Babcock & Wilcox, formerly known as BWX Technologies. NNSA said the combination may make sense because the two sites have related missions and both current contracts expire in September 2010.
- Consolidating the Kansas City Plant and Sandia National Laboratories management and mission requirements under a single operations contract. The plants have related missions in that Sandia, currently managed by Lockheed Martin [LMT], has primary design responsibility for non-nuclear warhead components and the Kansas City Plant, now run by Honeywell [HON], produces those components.
- Transferring management of tritium operations at the Savannah River Site in South Carolina and nuclear weapons production activities performed at Los Alamos to the contractor picked for a consolidated contract covering Pantex and Y-12. NNSA said such a change may make sense because it would put all nuclear-related production under a single contract. Alternatively, NNSA said tritium operations might go to the Kansas City Plant-Sandia contractor because that would put all weapons operations not involving special nuclear material–defined as plutonium and high-enriched uranium (HEU)–under one contractor.
NNSA also said it is looking at obtaining nuclear production services and products from a “contractor-owned/contractor-operated” facility that holds a Nuclear Regulatory Commission (NRC) license to process and store special nuclear materials.
Currently, only two commercial facilities, Nuclear Fuel Services Inc. in Erwin, Tenn., and Babcock & Wilcox’s Lynchburg, Va., facility hold such NRC licenses.
NNSA said it might use those existing NRC-licensed facilities for production of weapons-related material or components; it noted that DoE’s naval reactor program already buys products and services from the Nuclear Fuel Services and Babcock & Wilcox facilities.
Another option, NNSA said, would be to have private companies build new production facilities at NNSA sites through “alternatively financed construction”–generally meaning the contractors would finance construction and own the buildings, which could then by leased by NNSA.
NNSA noted DoE has used that approach to build new office buildings at some of its sites, thus avoiding construction costs and risks.
And in a particularly intriguing comment, NNSA said it might save money by utilizing private facilities already processing uranium for commercial nuclear reactor operators.
“In the case of uranium processing, it has been suggested that there is an opportunity to leverage uranium production for the commercial uranium industry with the needs of the nuclear weapons program,” the agency said in a brief document describing its possible contracting changes.
NNSA also said it was considering use of commercial sources to obtain non-nuclear products and services “after a decision is made regarding proposals to modernize the production of non-nuclear components, currently performed at the Kansas City Plant.
“NNSA is considering moving this activity from a government-owned to a government-leased facility,” the agency added. “This could open up the potential for other transformational changes. For example, environmental, safety, and health oversight could transition to non-DoE federal and state authorities.
“It may be possible to further transition from a federal lease to more of a Department of Defense model, under which NNSA purchases product as a primary customer and may have no direct involvement in how the facility is operated or what other customers it serves. This evolution could provide NNSA with a more effective and efficient production capability for non-nuclear parts that are not readily available through outsourcing by Sandia National Laboratories.”
NNSA outlined its possible contracting changes in a “request for information” (RFI) that sought comment from contractors and other interested parties on the options being mulled by the agency.
It is the second RFI issued by NNSA as part of a process begun by the agency last September to solicit outside comment on possible ways it could change its contracting strategy to “promote more effective and efficient technical and business operations in support of a more responsive and cost-effective nuclear weapons complex.”
NNSA said that in response to its first RFI, issued Sept. 10, it received comments from 20 interested parties who proposed more than 35 different ideas and options for NNSA to consider in changing its contract strategy. The agency said its second RFI is aimed at getting comments on specific contracting strategies, options and provisions that not only will increase productivity and efficiency but also boost competition among contractors for NNSA contracts.
More broadly, NNSA’s new contracting strategy is part of the agency’s effort to down-size its Cold War-era weapons production complex and address longstanding operational and security problems at those sites. The agency also wants to improve coordination among its sites so its weapons production operations can be more “responsive” to changing national security needs for different kinds of warheads or other weapons capabilities.
The agency earlier this month issued a supplemental environmental impact statement on “transformation” of its weapons complex in which it called for phasing out some plutonium operations at Lawrence Livermore National Laboratory in California by 2012 and various weapons-related testing activities at Livermore, Sandia and Los Alamos national laboratories in New Mexico. Otherwise, NNSA plans to largely maintain current missions at its existing sites, though the size of those sites would shrink.
In its new RFI on contracting changes, the agency made clear it is mulling more aggressive consolidation strategies to achieve key cost-cutting and efficiency goals.
For example, NNSA said it hopes to cut administrative, overhead and support service costs by as much as 10 percent by putting several sites with related weapons missions under one contractor, thus reducing redundancy.
The agency also wants to reduce its operational footprint to hold down security costs, which have soared in recent years due to the need to increase protection of weapons- usable plutonium and HEU against heightened terrorist threats.
In addition, NNSA believes that consolidating management of several sites under one contractor will make it easier for the agency to oversee contractor performance, which has been a sore point for members of Congress frustrated by NNSA’s inability in recent years to prevent a string of security, safety and other problems at Los Alamos.
In its new RFI, NNSA also said it is interested in learning what contracting approaches might boost interest from contractors in bidding on NNSA contracts.
“NNSA is interested in receiving input from members of industry on the likelihood that they would compete or re-compete for one or more NNSA contracts under the options described above or other options they suggest,” it said. “NNSA would also like to receive industry input on barriers to competition or re-competition which could include aspects of recent requests for proposals and the contracting options and contract types and provisions described above.”
Written comments on NNSA’s consolidation options are due Feb. 20. The agency also said it would hold one-on-one meetings with interested parties in late February or early March to get their “candid and uninhibited” views on possible contracting changes.