DOE and Bechtel Jacobs sign $1.48B cleanup contract

OAK RIDGE — The Department of Energy and Bechtel Jacobs Co. have reached agreement on a newly restructured contract, valued at $1.48 billion, for Oak Ridge cleanup activities through 2011.

The new contract replaces Bechtel Jacobs’ previous contract and extends the contract period. It also establishes a fixed fee for the company’s future work and includes a settlement on previous fees owed to Bechtel Jacobs, which had been the subject of lengthy negotiations.

“We’re very happy with the contract and glad to have the issues taken care of,” BJC spokesman Dennis Hill said today.

John Shewairy of DOE said the contract agreement was signed Friday. The new contract is retroactive to Oct. 1, 2007 and runs through Dec. 31, 2011, Shewairy said.

The focus of the contract will be high-risk work at the East Tennessee Technology Park, the former uranium-enrichment plant that is being decommissioned and converted to a private industrial park. The biggest task includes the dismantlement and demolition of the gigantic K-25 building — a mile-long, U-shaped structure that was built during World War II to process uranium.

Under terms of the agreement, Bechtel Jacobs will receive a fixed fee of $53.2 million for the duration of the new contract, Shewairy said.

DOE also agreed to pay Bechtel Jacobs $39.9 million for work done from fiscal year 2004 through fiscal year 2007, he said. The federal agency previously paid BJC fee allotments totaling $33 million for that period, so the remaining amount to be paid would be $6.9 million, he said.

The earlier contract was performance-based and included incentives for completing the work, but Shewairy said it was ineffective because budget shortfalls and changing work conditions affected the schedules.

The new contract will not cover all of the cleanup work to be done in Oak Ridge, and Shewairy said DOE plans to award another contract that will begin in 2012 and extend to 2016 or 2017. That work, however, will be lower risk than the jobs included in the Bechtel Jacobs contract.

Bechtel Jacobs has been DOE’s environmental manager in Oak Ridge since 1998. Hill said it’s too early to speculate on whether the company — a partnership of Bechtel National and Jacobs Engineering — will bid on the work after 2011.

In addition to the work on K-25, the newly signed contract includes operation and eventual closure of the Oak Ridge incinerator; cleanup of a radioactively contaminated area known as Corehole No. 8 at Oak Ridge National Laboratory; and operation of other waste facilities in Oak Ridge.

More details as they develop online and in Thursday’s News Sentinel.

Frank Munger may be reached at 865-342-6329.