As MOX Funding Hopes Rise, Owner Dings Contractor Over Performance
The National Nuclear Security Administration’s harshly worded rejection of up to $2.7 million in performance bonuses for 2016 construction progress at the Mixed-Oxide Fuel Fabrication Facility project in Aiken, S.C., has prompted a fiery rebuttal from contractor CB&I Areva MOX Services. Meanwhile, project opponents and supporters are arguing for the Trump administration either to finally kill the controversial, behind-schedule plutonium-disposition project or accelerate it.
In its annual review, which nixed any performance bonus, NNSA didn’t mince words, calling MOX Services’ physical project completion estimates of more than 70% “patently false,” for instance. The agency added, “The contractor was unable to balance project technical baseline requirements with other elements of project performance, such as cost and schedule. The contractor lacked the fiduciary will to plan and execute work to fully benefit the project and taxpayer.”
Moreover, NNSA added, “The contractor continued to increase the amount of legal positioning and posturing throughout many of the project deliverables and activities, including the submission of additional REAs [request for equitable adjustment], claims and notices of impact/change under the contract that did not have valid or plausible bases.”
The Dept. of Energy and the contractor have been at odds about the project’s status for years. Originally estimated at $4 billion, construction began in 2007, with completion originally set for 2016.
A 2016 DOE report estimated that, given the then-current funding levels of about $340 million, the so-called MOX project would be completed in 2048 at a cost of more than $17 billion. At the same time, the contractor had estimated completion in 2029.
After noting the contractor’s disagreement over the project’s status, the agency’s review asserted, “When the contractor was provided the opportunity to establish a commitment to its asserted cost/schedule performance capabilities via a firm fixed-price proposal, it did not provide a proposal or commit to a date by which a proposal would be provided.”
The watchdog group Savannah River Site Watch, which secured the December 2016 report in February via a Freedom of Information Act request, used the harsh report to again criticize the project it calls a “boondoggle.”
“Mismanagement and construction problems by CB&I AREVA MOX Services and some of its contractors appears to be ingrained,” stated SRS Watch’s Tom Clements.
“A major project shake-up, including removal of the main contractor, may be essential to possibly salvage the troubled project or to allow the project’s closure,” Clements further stated.
The contractor fired back at NNSA. In a March 8 letter, Rex Norton, a vice president with the contractor, wrote that the firm was “shocked at the hostile and unbalanced tone” of the review and blamed the government for delays.
“Daily interference and obstruction by NNSA … continues crippling construction, slowing physical progress, significantly increasing costs and creating unnecessary delays,” he continued. “We vigorously disagree with these unproven assertions.”
Additionally, asserts the contractor, “Despite congressional direction to continue construction of the MOX facility, NNSA is ‘managing to termination.’
“These actions have not only complicated the continued construction, but have contributed to a chilled work environment,” the letter continued. The contractor did not respond to ENR’s request for comment.
David Blee, executive director of the Nuclear Infrastructure Council (NIC), called the report “sort of the last gasp from the past administration.” The Obama administration, he adds, “was hell-bent on doing whatever it could do to kill the project. The only thing they succeeded in doing was killing the plutonium disposition agreement with the Russians.”
Last October, Russian President Vladimir Putin announced that his country was suspending its participation in the treaty that governed the two countries’ plutonium disposition plans and served as the MOX project’s impetus.
With the Trump administration, though, “there’s a chance for a reset on MOX and the Russians,” Blee says.
Blee says Trump may want to increase funding for MOX and points to the president’s call for a $54-billion increase in defense spending as a possible funding source. Such a move would fit in with the president’s plans to increase infrastructure spending and create new jobs, he says.
NIC estimates that boosting annual appropriations to about $500 million from the current level of $340 million would accelerate the project and create about 1,000 new jobs, Blee says. “Those are compelling reasons why it might be speeded up,” he added.