CONTRACTING & ACQUISITION
15 major EM contracts expiring in 2020
ECA Staff | 10/30/2019
Communities surrounding DOE sites are impacted in many ways whenever DOE begins a new contracting process. The approach to—and ultimate success of—these contracts is vital to the overall nuclear security and nuclear waste cleanup mission in the United States, the health and viability of the communities that host these sites, the strength of the future workforce, and the sustainability of businesses—both
small and large—that take on these unique tasks. Contracts provide a basis for community members and Congress to gauge cleanup progress, which in turn can increase trust and confidence in the cleanup.
ECA communities at all of DOE’s sites continue to ask the Office of Environmental Management (EM) for regular briefings on the timing of the contracts. Each contract delay impacts the community and adds uncertainty for the workers, local governments and their budgets, and small businesses who may serve as subcontractors. ECA has advocated for contracts to include community engagement requirements, emphasize longer-term contracts (five years versus three years with two one-year options), and include community cleanup priorities clearly in the contract scope.
ECA appreciates the opportunity to discuss these principles with EM, which has been holding regular community meetings for each procurement at the same time DOE meets with interested bidders.
Last year DOE released a modified End State Contracting Model (ESCM) in hopes of better defining “discrete scopes of work for site closure or end states” and providing for “more realistic, reliable pricing and appropriate incentive structures.”
At this year’s National Cleanup Workshop, EM Principal Deputy Assistant Secretary Todd Shrader discussed with industry leaders and local government officials the Department’s plan to continue pursuing and implementing end state contracting. DOE will apply the new model to several upcoming procurements.
EM currently has 31 major contracts that are active. Of those contracts, 15 of them are expiring in 2020:
- Environmental Program Services in Nevada (expiring 1/31/2020)
- Security Services at Savannah River Site (expiring 2/7/2020)
- West Valley Demonstration Project Interim End State (completion contract, expiring 3/9/2020)
- NRC Licensed Facilities Management Contract in Idaho (expiring 3/31/2020)
- Decontamination & Decommissioning Project for the East Tennessee Technology Park (expiring 7/31/2020)
- Hanford 222-S Laboratory Analysis and Testing Services (expiring 9/20/2020)
- Waste Isolation Pilot Plant Management and Operating Contract (expiring 9/30/2020)
- Tank Operations Contract at Hanford (expiring 9/30/2020)
- Paducah Infrastructure Services (expiring 9/30/2020)
- Hanford Site Central Plateau Remediation (expiring 9/30/2020)
- Design, Construction and Commissioning of the Salt Waste Processing Facility at Savannah River Site (completion contract, expiring 9/30/2020)
- Savannah River Liquid Waste Program (expiring 9/30/2020)
- Management and Operation (M&O) of the Savannah River Site (expiring 9/30/2020)
- Transuranic Waste Processing at Oak Ridge (expiring 10/26/2020)
- Carlsbad Technical Assistance Contract (expiring 12/3/2020)
There are 14 contracts currently being competed for procurement by EM, including cleanup at Oak Ridge Reservation, Hanford, and Idaho. DOE has made available a listing of major procurement actions, which is based on information from DOE’s Acquisition Forecast.
DOE has missed some of its anticipated award deadlines, leading to a number of recently announced contract extensions. Mission Support Alliance’s site-wide services contract at Hanford was extended for six months; the M&O contract held by Savannah River Nuclear Solutions was extended through September 2020; and the Central Plateau remediation contract at Hanford was extended through September 2020.
At the 2019 National Cleanup Workshop, a DOE representative acknowledged the delays and said they are due in part to DOE’s desire to ensure the contracts are set up correctly, which means evaluating the technological needs, the workforce and leadership, and the structure of the contract.
According to DOE, anticipated evaluations or awards to be completed in March-May 2020 include the cleanup contract at Oak Ridge Reservation; Nationwide Deactivation, Decommissioning & Removal (DD&R); and the Idaho Cleanup Project contract.
For more information about ECA’s work on contracting, read our report, Changing Course: The Case for Sensible DOE Acquisition Reform.
COMMUNITY SUPPORT
Payments in Lieu of Taxes: Revisions to DOE Order Could Provide Better Assurance That Payments Meet Goals
Government Accountability Office | 10/29/2019
What GAO Found
The Department of Energy's (DOE) payments in lieu of taxes (PILT)—payments made to some local communities that host DOE sites—vary considerably across the sites and have generally increased over time. Communities at 11 DOE sites received PILT payments in fiscal year 2017 (the most recent fiscal year for which complete data were available), totaling approximately $23 million (see figure). Payments to communities at the Hanford and Savannah River sites accounted for approximately 70 percent of
that total, while payments to six sites combined accounted for less than 5 percent. Total PILT payments have more than doubled since 1994, primarily because of growth in payments to communities at the Hanford and Savannah River sites and because communities at other sites began receiving payments since 1994.
DOE intentionally allows for variations of payments across sites so that payments may reflect the revenues communities would have received had the property remained on the tax rolls in the condition in which it was acquired, which DOE officials stated is a goal of PILT. However, DOE's PILT order's lack of requirements has limited DOE's ability to provide adequate assurance that payments consistently meet this and other PILT goals. The PILT order does not require documentation of the key
determinants that went into the calculation of payments, or an independent review process to determine whether payment calculations are consistent with PILT goals. The PILT order also lacks specificity about payment determinations in certain scenarios. Without updates to the PILT order to strengthen DOE's internal controls, DOE will continue to lack adequate assurance that payments meet PILT goals.
Why GAO Did This Study
The Atomic Energy Act, as amended, authorizes DOE to make PILT payments to communities that host DOE sites that meet specific criteria. PILT is discretionary financial assistance that provides payments to communities based on the property taxes they would have received had the property remained on their tax rolls.
House Report 115-230 accompanying a bill for the Energy and Water Development and Related Agencies Appropriations Act of 2018 included a provision for GAO to review DOE PILT. This report assesses (1) how PILT payments vary, if at all, by site and over time, and (2) reasons for variations in payments and the extent to which DOE is providing assurance that payments meet PILT goals.
GAO analyzed data on DOE payments to communities that DOE reported as having received PILT payments between 2008 and 2017. GAO compared 2017 data across sites and identified changes in payments to those communities between 1994 and 2017. GAO reviewed PILT's authorizing statute, DOE's PILT order, and PILT documentation. GAO interviewed officials from DOE, communities, and community organizations.
What GAO Recommends
GAO is making three recommendations that DOE update its PILT order to: improve collection and documentation of key determinants of PILT payments, implement a review process, and clarify how communities should calculate payment requests. DOE neither agreed nor disagreed and plans instead to further study PILT. We believe our report supports implementation of these recommendations.
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Read about DOE's High Level Waste Interpretation
Have questions about DOE’s recent high-level waste (HLW) interpretation? Download ECA’s Key Points and FAQs on the issue to better understand what ECA believes are the potential benefits of implementation.
Interested in learning more? Read the ECA report “Making Informed Decisions on DOE's Proposed High Level Waste Definition” at www.energyca.org/publications
Stay Current on Activities in the DOE World
Read the latest edition of the ECA Bulletin, a regular newsletter providing a detailed brief of ECA activities, legislative news, and major events from across the DOE complex. Have suggestions for future editions? Email bulletin@energyca.org.
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Learn More about Cleanup Sites with ECA's DOE Site Profiles
ECA's new site profiles detail DOE's 13 active Environmental Management cleanup sites and national laboratories, highlighting their history, missions, and priorities. The profiles are a key source for media, stakeholders, and the public to learn more about DOE site activities, contractors, advisory boards, and their surrounding local
governments.
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