DOE Cancels Disputed $28B Nuke Site Award to Fluor-Amentum

A large red crane lifts a gray rectangular slab with workers wearing yellow vests below, a cloudy sky in the background

Bechtel, which is managing construction of the $6.5B uranium processing complex at DOE's Y-12 site in Tennessee, also now will remain interim site manager as the 10-year management contract is rebid.

Photo: NNSA/DOE

The U.S. Energy Dept.'s National Nuclear Security Administration will rebid as separate contracts the management and operations of two large-footprint nuclear waste management sites in Texas and Tennessee after canceling a 10-year award made last year, worth up to $28 billion, to a Fluor Corp. and Amentum-led team.

NNSA canceled the contract May 16 for the Pantex site near Amarillo, Texas, and the Y-12 National Security complex in Oak Ridge, Tenn., both hosting nuclear weapons assembly and storage activity, after losing bidders Bechtel and BWXT protested the award in December 2021.

Bechtel, which was the contract incumbent, claimed the agency made an “ad hoc” decision when making the award.

NNSA rebid the contract in 2020 after opting not to renew the last three years of Bechtel’s 10-year contract, but it kept the management and operations of the two plants under a single contract.

The Government Accountability Office dismissed the protests in January after NNSA said it was taking voluntary corrective action and would reassess its evaluation of the three bids.

NNSA also said at the time it would reassess alleged conflicts of interest and alleged appearances of impropriety that the bid protests raised, and possibly “terminate the contract.”

NNSA, a semi-autonomous agency in DOE that maintains the U.S. nuclear weapons stockpile, did not comment further on the bid protest allegations.

In a statement announcing the cancellation, the agency saidbased on its “review of the procurement record and our assessment of increased requirements at the sites, cancellation of the solicitation and termination of the resulting award is appropriate."

Administrator Jill Hruby said that “fair and open competition is critical to NNSA.”

NNSA will award a contract extension June 1 to the Bechtel-led team for management and operations of Pantex and Y-12 for a minimum of two years with an option for a third year. Team members include Leidos, ATK Launch Systems and SOC LLC, with Booz Allen Hamilton as a teaming subcontractor.

“The contract extension is necessary while NNSA develops a new acquisition strategy to manage Y-12 and Pantex under separate contracts and revises the documents to reflect the significant change to the requirements,” the agency said.

NNSA did not disclose changes in the new contracts' scope, or schedule of the procurement, which is expected to include the Bechtel, Fluor-Amentum and BWXT teams.

Fluor said in a statement that it is "disappointed in the decision to cancel the previous award," but it "remains committed to the nation’s nuclear security through its existing and future contract work."

In its statement to ENR, Bechtel is "pleased that the NNSA has entrusted CNS with the continued management and operations of both Y-12 and Pantex," a spokesman said. "In the interim, we will continue to remain focused on safety, quality and efficient mission delivery."

In a May 17 note to investors, Andrew Wittmann, lead construction industry analyst for Baird Equity Research, said the contract “was a major component” of what he said was “an expected $20 billion to $30 billion award pipeline” for Fluor, with “significant long-term reimbursable contract revenue.”

Wittmann estimated that reaward of the contracts would take about one year from solicitation and that Fluor “appears well positioned” to win one.

Fluor also affirmed its 2022 and 2024 financial guidance and said it "foresees significant growth opportunities in 2022."

Mary B. Powers has reported on engineering and construction issues in the global energy and environmental sectors for more than 30 years from Washington, D.C. and Birmingham, Ala. She formerly wrote for the Platt's group of energy sector publications under McGraw Hill and S&P Global that included Inside Energy and Megawatt Daily, and was state editor for the Lexington, Ky., Herald Leader. Mary has a master’s degree in journalism from The American University.

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