Summary on GAO’s big ruling: what’s next?

0140052-03After being stalled for more than a year by contract protests, the change of federal contractors at the Y-12 and Pantex nuclear weapons plants may be on the verge of resuming.

On Thursday, the U.S. Government Accountability Office denied the third protest filed by Nuclear Production Partners, a team headed by Babcock & Wilcox, which was one of the losing bidders on the $22 billion contract. The contract combines the management of the government facilities in Oak Ridge and Amarillo, Texas.

The GAO said its decision resolves the multiple protest issues, and the National Nuclear Security Administration, the semi-independent part of the Department of Energy that oversees the nuclear weapons complex, said it intends to resume the transition of contractors at the two sites “as soon as possible.”

Consolidated Nuclear Security, a team that’s headed by Bechtel and includes Lockheed Martin and ATK, was awarded the giant contract in January 2013. But the transition of contractors at Y-12 and Pantex was halted soon after it began because of protests filed by NP2 and the other bidder, Integrated Nuclear Production Solutions, a team that included Jacobs Engineering and Fluor.

While Thursday’s ruling by GAO seems to resolve the protest issues debated over the past year, there is still a possibility that the B&W-led team could challenge the contract award in the U.S. Court of Federal Claims.

B&W issued a statement saying it was “disappointed” in the GAO ruling. George Dudich, president of B&W Technical Services Group, said the team would evaluate the GAO decision and consider its options.

Ralph O. White, GAO’s managing associate general counsel for procurement law, issued a statement that said the GAO decision denied all aspects of the latest protest. The B&W-led team had argued that the NNSA had not properly corrected the flaws upheld by GAO in an earlier protest and that the NNSA had given favored treatment to Consolidated Nuclear Security.

GAO concluded that the NNSA took proper actions to address the earlier protest issue, which criticized the federal agency for not validating the cost savings proposed by the various bidders.

Consolidated Nuclear Security, the winning bidder, said it could save the government more than $3 billion over the next 10 years by eliminating redundancies in the combined contract operations and other efficiencies.

“In addition, our decision rejected (NP2’s) various complaints about the substance of the agency’s evaluation and the source selection decision,” White’s statement said.

After reviewing the proposed cost savings and other issues, the NNSA announced in November 2013 that it had reaffirmed the contract award to CNS. Thursday’s ruling by GAO gives its stamp of approval to that award.

Keri Fulton, a spokeswoman at NNSA headquarters in Washington, D.C., said the dismissal of the protest allows the contract transition to move forward. “The men and women at each site have done their jobs admirably despite the distractions the contract process brought with it, and we are moving forward with our work to keep the American people safe,” Fulton said.

Oak Ridge Mayor Tom Beehan, who was in Washington on Thursday for a meeting of the Energy Communities Alliance, said he was relieved that the ruling appears to give finality to the contract process.

The process of combining the management of the two plants has taken years, and Beehan said he believes all the uncertainty has hurt the Oak Ridge economy. “Now we can move on with our lives,” he said.

Steve Jones, president of the Atomic Trades and Labor Council, said the unions are ready to work with whatever contractor team takes the reins. He said labor leaders are anxious to see what actions are being proposed to cut costs at Y-12.

The collective bargaining agreement for hourly workers at Y-12 is due to expire June 22, and Jones said that will be a pressing issue for the new contractor. He said the ATLC is prepared to begin negotiations, but also noted the unions would be willing to talk about an extension of the current agreement to give more time for the parties to get to know each other.

U.S. Sen. Lamar Alexander, R-Tenn., said the contract award is “hugely important to East Tennessee and to the nation’s security.”

The Y-12/Pantex contract includes the construction of the multibillion-dollar Uranium Processing Facility at Y-12, and Alexander said he would work with Bechtel to make sure the UPF is “completed on time and within its budget.”

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About Frank Munger

Senior Writer Frank Munger covers the Dept. of Energy's Oak Ridge facilities and many related topics — nuclear weapons, nuclear waste and other things nuclear, environmental cleanup and science of all sorts. Atomic City Underground is, first and foremost, a news blog, but there's room for analysis, opinion and random thoughts that have no place else to go.