The National Nuclear Security Administration announced that Tuesday Consolidated Nuclear Security, LLC, (CNS) has been selected to be the new management operator for the Y-12 National Security Complex in Oak Ridge.
During a conference call Tuesday afternoon, DOE officials said CNS intends to retain 95% of current employees across the several operations they've been hired to manage.
The contract also includes management and operation of the Pantex Plant near Amarillo Texas, and construction management for the Uranium Processing Facility at Y-12.
Many of those who do leave, officials say, could be offered early retirement.
According to the press release, the new five year contract will save $3.27 billion in taxpayer dollars over the next decade. The contract's overall value for 10 years is approximately $22.8 billion, according to the NNSA.
DOE officials say the company has not laid out a specific plan for cutting costs, but did mention the possibility of "consolidation."
Atomic Trades and Labor Council President, Steve Jones, says he hopes the only change coming to Y-12 will be the name on their paychecks.
He says the 2,000 employees the union represents have been anxious about the announcement, but he wants to set minds at ease.
"This is the fifth contractor change that I've lived through and historically we've seen no change," says Jones.
The management will be a joint venture led by Bechtel National and Lockheed Martin Services, in conjunction with ATK Launch Systems and SOC, LLC.
Bechtel has been a part of the B&W management team, which took over the Y-12 contract in 2000, according to Jason Bohne of Bechtel's public affairs.
"We're certainly no stranger to the area," says Bohne, who expects to be in Oak Ridge tomorrow.
Prior to that, Lockheed Martin held the contract from 1984 to 2000.
The new agreement includes the option for an additional five year extension.
According to the press release, the contract could earn CNS up to $446 million with an additional $263 million as their share of cost savings.
The National Nuclear Security Administration laid out four objectives for CNS, including improving performance, reducing the cost of work, and merging the operations of various nuclear-related sites.
"We know there's a lot of ways we can save money out here. But we'd rather do it with increased efficiency, not job cuts," says Jones, who hopes CNS will invite the union to the table when cost cutting measures are discussed.
According to the National Nuclear Security Administration, CNS provided a promised schedule of spending cuts. The contractor must achieve 80 percent of its schedule within a three-year period to be eligible for a contract extension.
Y-12 made big news in July when protestors broke in to the facility in a major security breech.
According to the NNSA, that wasn't the determining factor in Tuesday's decision.
They say instead, they examined the bids for the "overall best value."
The contract officially takes effect May 1, 2013.
Statement from B&W on loss of contract
We are disappointed, as we believe our proposal was a very strong choice for moving closer to NNSA's vision of a consolidated Nuclear Security Enterprise. We will carefully evaluate information received during NNSA's debriefing process and consider the options available to us within the procurement process. We will continue to manage both facilities at the highest level of performance through the transition period. Any transition is expected to take four months once it is initiated.
Over the past 12 years, with the support of NNSA, workers, community and public leaders, B&W Y-12 and B&W Pantex have made great accomplishments at the production sites. As the Y-12 M&O contractor, B&W Y-12's history of success includes increasing dismantlements and the site's production capacity, while at the same time executing complex projects, including the removal of 1.3 million square feet of aging facilities. B&W Pantex has met or exceeded all dismantlement and production goals over the last five years while maintaining an impressive safety record. In 2012, B&W Pantex achieved the lowest recordable case rate in the Nuclear Security Enterprise. Both Y-12 and Pantex have earned U.S. Department of Energy (DOE) Voluntary Protection Program (VPP) Star Status, a significant health and safety validation.
B&W TSG sees numerous opportunities to grow our business in the United States and abroad. Our company possesses highly skilled individuals with expertise in nuclear operations, nuclear waste management, security, precision manufacturing and environmental remediation. Fee earnings for Y-12 and Pantex were in line with our projected results for 2012.
B&W and our partners provide valuable services to NNSA across the entire Nuclear Security Enterprise. We are committed to ensuring national security and providing exceptional service to the
DOE and NNSA.