MOX contractor earns only fraction of performance award fee

The Mixed Oxide Fuel fabrication facility under construction at Savannah River Site in June, 2016.

An already cloudy future looks to be getting darker at the Mixed Oxide Fuel fabrication facility at Savannah River Site after results from a Fiscal Year 2016 evaluation were made public Tuesday morning.

The FY 2016 Award Fee Determination was released by Tom Clements, a nuclear watchdog and director of SRS Watch. Clements submitted a public document release request to the National Nuclear Security Administration, the U.S. Department of Energy office that oversees MOX, to have the documents released.

Clements said he has had to do the same thing to get those documents released in past years, even though all other contract holding entities at Savannah River Site, like Centerra and Savannah River Nuclear Solutions, have their determination results posted publicly following each evaluation.

The evaluation documents from the NNSA are scathing and said what positives they saw at MOX were negated by “unsatisfactory” performance.

The overall rating was listed as “satisfactory,” but the contract company earned less than 9 percent of the total award fee available for its performance during the year. In contrast, SRNS, Centerra, and Savannah River Remediation all earned over 90 percent of their respective award fees for performance.

The MOX budget is boiling over and the facility being built by CB&I AREVA MOX Services is years past deadline. Those financial and schedule failures prompted a lawsuit against the Department of Energy by the State of South Carolina in 2016.

The MOX facility failed to reach its operational goal of 2014 and legislation required the DOE to remove one metric ton of plutonium from the state for each year beyond that missed deadline. The Energy Department and AREVA MOX Services failed to meet those criteria and a $1 million daily counter was started.

That penalty counter capped out at $100 million, but when DOE failed to reach those objectives again by Jan. 1, the 2017 ticker started up. As of March 1, that tally stands at $60 million dollars and will reach its limit in early April.

The evaluation report said, “The contractor lacked the fiduciary will to plan and execute work to fully benefit the project and taxpayer.”

It also noted, “There continued to be a lack of transparency and openness in external communications with key project stakeholders by the contractor including continued release of misleading and inaccurate project information.”

The MOX project was put into motion by a 2000 agreement between the U.S. and Russia for each nation to demilitarize 34 metric tons of plutonium; enough to create a combined 17,000 nuclear weapons. In early 2016, the Obama Administration made a large push to close the MOX project down. Neither the contractor nor the DOE could agree on how much the project cost or how near it was to completion.

Figures from the contractor marked the facility about 70 percent complete, but the Energy Department said it was about 30 percent complete. Even the figures for total cost to completion varied by several billion dollars and total lifetime costs are estimated to be upwards of $50 billion. According to the evaluation report, some of that false and misleading information included completion percentage.

“The over 70% physical completion figures reported by the contractor are patently false,” the report said.

In the “Integrated Project Execution” section, CB&I Areva MOX Services listed its “self-rating” at 92 percent. That section of the evaluation holds 90 percent of the overall evaluation weight and the Department of Energy gave the contractor a 0 percent rating. For the heaviest and most integral part of the evaluation, the contractor was awarded $0 of the available $2.7 million award fee.

“This report card makes it clear that not only has CB&I AREVA MOX Services utterly failed in its construction performance but the company also has been actively misleading the government and the public about its chronic shortcomings. This assessment confirms that the MOX project should be shut down and investigations into waste, fraud, abuse, mismanagement and corruption must be ramped up,” Clements said.

It is unclear how the incoming Secretary of Energy will handle the MOX facility under a Trump Administration that is already known to take measures to slash prices on expensive government projects. The nominee for Trump’s Secretary of Energy, Rick Perry, has yet to be confirmed.

Clements released a comprehensive 41-page report on MOX including documents compiled over several years about issues at the MOX facility.

Clements presented the paper Tuesday at the Exchange Monitor’s Nuclear Deterrence Summit in Washington . In his report, Clements said, “The MOX project is doomed and is no longer viable and should be officially terminated by any means possible, including halting funding as well as removing CB&I AREVA MOX Services from the project.”

Reach Thomas Gardiner at (706) 823-3339 or thomas.gardiner@augustachronicle.com

Roland SASSER 28 days ago
I'm going to be as neutral as I can. It seems that Clements being in his watchdog role might have an axe to grind. With that said, it does trouble me that the MOX contractors appear to be stonewalling on issuing their progress reports, why? I have worked for various government contractors for years and I believe the real numbers are somewhere between the two extremes. To the MOX folks, Trump thinks like a businessman, not a politician. Politicians tend waste and squander money to appease their constituents, businessmen are always looking at the bottom line and will cut their loses. Maybe a new prime contractor could pull this project out of the ditch? Hope so!  

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