Originally created 01/06/01

Westinghouse renews deal



Bill Richardson fulfilled his final promise to Savannah River Site supporters Friday.

The U.S. Energy Secretary, who will leave office this month, renewed Westinghouse Savannah River Co.'s contract to operate the federal nuclear-weapons site. The company, which has operated SRS since 1989, received a six-year, $8.4 billion extension to its deal.

Mr. Richardson had said he intended to renew Westinghouse's contract during a visit to Augusta in November.

In a statement issued Friday, the U.S. Department of Energy's top official at SRS said the renegotiated contract was better than its predecessor.

"The extension improves the terms of the contract to increase the focus on performance and results," said Greg Rudy, the Energy Department's manager at the site.

Westinghouse executives welcomed the news.

"This extension assures an element of stability and continuity over the next several years," Joe Buggy, president of Westinghouse Savannah River Co., said in a statement. "We believe our current and future missions will best be executed now that we have the opportunity to continue the work we have under way today."

But some nuclear watchdogs raised concerns about the renewal, criticizing Westinghouse's environmental record at SRS and pointing to racial-discrimination lawsuits filed against the company by dozens of black employees.

"Frankly, we find the prospect of another six years with a corporate culture at SRS that sanctions environmental crimes and abuses against black workers to be quite grim," said Glenn Carroll, coordinator for Georgians Against Nuclear Energy. "But then, we fervently wish we will ever have any Energy Department contractor which will give us cause to celebrate."

Most of the contract's $8.4 billion will go toward the costs of operating the site. But Westinghouse can earn up to $345 million over the life of the deal for meeting performance incentives.

Unlike the previous contract, the company can earn bonuses for completing what federal officials call "stretch" projects - work that was not funded in the site's budget.

Westinghouse also can earn advances against reaching future goals. But if the company fails to finish the job, it is liable for the amount of the advance plus interest.

The agreement retains the site's network of subcontractors beneath Westinghouse: Bechtel Savannah River Inc., BWXT Savannah River Co., and British Nuclear Fuels Ltd. Savannah River Corp.

The deal is the largest plum of several that Westinghouse's parent company, Washington Group International Inc., has received from the Energy Department.

Last month, the company won two Energy Department contracts: as the lead partner in a five-year, $500 million deal to operate the U.S. Department of Energy's Waste Isolation Pilot Plant near Carlsbad, N.M.; and as the minority partner in a 10-year, $4 billion deal to design, build and operate a radioactive-waste treatment plant at Hanford Site in Washington.

Washington Group's government-services arm, which will oversee its operations at all three sites, is building a $6 million corporate headquarters in downtown Aiken.

Reach Brandon Haddock at (706) 823-3409.