Management of Suspended Procurements at the Waste Treatment and Immobilization Plant Project
February 23, 2017
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February 23, 2017
Management of Suspended Procurements at the Waste Treatment and Immobilization Plant Project
One of the Department of Energy’s largest cleanup challenges involves 56 million gallons of hazardous and highly radioactive waste stored in underground tanks at the Hanford Site. The Department’s Office of River Protection manages the cleanup project. As part of this effort, the Department contracted with Bechtel National, Inc., (Bechtel) to complete the design and construction of the Waste Treatment and Immobilization Plant (WTP) to treat and immobilize the majority of the waste in preparation for permanent disposal.
In November 2011, the Department notified Bechtel that significant reductions in project funding would occur. As a result, Bechtel began to suspend procurements for parts and materials for the Pretreatment Facility. Based on its analysis and because of the significant cost, Bechtel recommended terminating 28 procurements, completing 6, and retaining 22 in suspension. In response to Bechtel’s analysis, on April 28, 2015, the Office of Inspector General received a congressional request to review “questionable contract practices” related to these procurements. The congressional request also asked the Office of Inspector General to determine whether Bechtel had earned fees for managing these procurements and whether those fees were appropriate.
We found the Department and Bechtel had not fully resolved issues with suspended procurements for WTP’s Pretreatment Facility in a timely manner. Specifically, neither the Department nor Bechtel has fully acted to terminate all of the 28 procurements recommended for termination. For example, had the Department and Bechtel acted on the January 2015 recommendations to terminate the five most costly procurements, our analysis revealed that they could have avoided $1.9 million in suspension costs incurred since that date. Further, we noted that during the period 2011 through 2015, the amount of award fee earned by Bechtel had declined; however, we did not find any indication that management of the suspended procurements was a factor in determining the amount of award fee earned by the contractor.
The delays in resolving issues with the 56 suspended procurements resulted primarily from an impasse between the Department and Bechtel over roles and responsibilities, an issue that delayed action being taken on Bechtel’s recommendations for terminating the five most costly suspended procurements. We made several recommendations to the Assistant Secretary for Environmental Management to ensure that the impact of potential changes are considered on a timely basis, as well as to address the current recommendations for the 56 suspended procurements.
Topic: Environmental Cleanup