NNSA reaffirms decision to have CNS manage, operate Y-12, Pantex

The National Nuclear Security Administration on Friday reaffirmed its January decision to pick Consolidated Nuclear Security LLC  to manage and operate the Y-12 National Security Complex in Oak Ridge and Pantex Plant near Amarillo, Texas.

That earlier decision, announced almost 10 months ago, had been challenged in two rounds of bid protests. Those protests delayed the transition to a new contractor, and it wasn’t clear Friday if the NNSA’s new decision might also be challenged.

The five-year extendable contract, which could be worth up to $22.8 billion over 10 years, includes project management of the Uranium Processing Facility at Y-12 and an unexercised option for Savannah River Tritium Operations at the Savannah River Site near Aiken, S.C.

“Our nuclear production capabilities are critical to our national security, and CNS represents the best value to the government as evidenced by its superior technical and management approach and its lower evaluated cost,” NNSA Acting Administrator Bruce Held said. “Additionally, this award puts NNSA in a position to improve mission delivery by focusing on improving the way we operate, saving taxpayer dollars, and aligning ourselves for the future.”

CNS, of Reston, Va., is comprised of Bechtel National Inc., Lockheed Martin Services Inc., ATK Launch Systems Inc., and SOC LLC. CNS will also use two subcontractors. The first, Booz Allen Hamilton Inc., will serve as a merger and transformation specialist, and the second, General Atomics, will help with Savannah River Tritium Operations if that option is exercised by NNSA in the future.

Federal officials have said the consolidated contract, the result of years of work, could save money in part by eliminating redundancies in such areas as human resources, purchasing, finance, and information technology. Earlier this year, they said the contract includes a total available fee of up to $446 million for CNS to manage the three sites for the NNSA and the U.S. Department of Energy, including the possible tritium work. CNS may also earn up to an additional $263 million as their share of savings, although the company cannot share any savings related to employee benefits.

The transition to CNS at the two nuclear weapons plants could start later this month—after the period for protests is over around Nov. 25, the NNSA said Friday afternoon. The transition could last four months, but the NNSA will ask CNS to complete the transition quicker if possible.

It wasn’t clear if the two losing teams—Integrated Nuclear Production Solutions LLC of Oak Ridge, and Nuclear Production Partners LLC, or NP2, of Lynchburg, Va.—might challenge the NNSA’s most recent decision. Federal officials declined to speculate about whether any new protests might be filed, and NP2, which is led by Babcock and Wilcox Co., or B&W, did not directly respond to a question about whether it might challenge the decision.

The NNSA, a separate agency within the U.S. Department of Energy, is hoping to avoid a third round of protests and has asked the three bidding teams if they are willing to share confidential information to help avoid challenges “based on incomplete information and suspicions that are unfounded.” All three teams will receive a debriefing.

The transition to CNS had originally been scheduled to be complete by May 1 of this year. But NP2 and Integrated Nuclear Production Solutions LLC filed bid protests, with the first filed Jan. 17. The U.S. Government Accountability Office upheld one part of those initial protests in April, and in September, it denied or dismissed new challenges filed by NP2 in June.

On Friday, CNS said it appreciated the NNSA’s reaffirmation that its contract award “provides the best value to the government for managing and operating the Pantex and Y-12 sites.”

“We have maintained a high state of readiness since the contract award in January,” spokesman Jason Bohne said. “We are prepared to resume and execute an effective transition. We look forward to working with the NNSA and with the employees of Pantex and Y-12 to ensure mission delivery with safety, security, reliability, and efficiency.”

He said more details could be available Monday.

B&W, which is now the lead management and operating contractor at Y-12 and Pantex, said it still believed its proposal was the best choice.

“We are disappointed, as we believe our proposal, including revisions submitted after the Government Accountability Office sustained our initial protest, was the strongest choice, as originally determined by the Source Evaluation Board,” said George Dudich, president of Babcock and Wilcox Technical Services Group Inc. “We will carefully evaluate information received during NNSA’s debriefing process in determining our next steps. In the interest of ensuring a transparent process, our team agreed to an open, two-part debrief, and we hope that will be possible.”

Besides B&W, other members of the NP2 team are URS, Northrop Grumman, and Honeywell.

“We remain committed to making contributions to national security and providing exceptional service to the U.S. Department of Energy and NNSA,” Dudich said.

The Integrated Nuclear Production Solutions team includes Jacobs Engineering Group Inc. and Fluor Federal Services Inc. A spokeswoman for that team has not responded to an e-mailed request for comment.

Y-12 is currently operated by B&W Y-12, a partnership of the Babcock and Wilcox Co., of Charlotte, N.C., and Bechtel Corp. Meanwhile, Pantex is managed and operated by Babcock & Wilcox Technical Services Pantex LLC. Bechtel, which has operational headquarters in Reston, Va., is a partner on that project as well.

The B&W-led companies have held the Y-12 contract since 2000 and the Pantex contract since 2001, spokeswoman Aimee Mills said.

This would be the NNSA’s first consolidated contract, federal officials said earlier this year. They said CNS had promised to save the federal government $3.27 billion during the next decade, although the details haven’t been publicly released and it wasn’t clear if that promise remained in effect. According to federal officials, the company also had said that it expects to offer jobs to more than 95 percent of the current employees, although that number could be affected by voluntary retirements and other departures.

Note: This story was last updated at 3:40 p.m. Nov. 2.