Wednesday, May 05, 2004
Copyright © Las Vegas Review-Journal

Yucca contractor may get $85 million in bonuses

Rewards for meeting deadlines, performance incentives add up on nuclear waste repository

WASHINGTON -- The Yucca Mountain Project's primary contractor could earn as much as $85 million in government bonuses for meeting deadlines and performance incentives over the next two years, according to contracts.

Aiming to file a nuclear waste repository application by year's end, the Department of Energy has negotiated rewards for Bechtel SAIC Co. LLC to keep the program on schedule, and for work quality.

The operations and management contractor could earn $11 million for meeting a July 26 deadline to complete a draft license application, and $15.3 million to have final license documents ready by Nov. 30.

Bechtel SAIC, which employs 1,500 in Southern Nevada, could earn the largest bonus, $22.1 million, if the Nuclear Regulatory Commission accepts the license application for formal review.

A contract also stipulates $21.3 million in awards for "world-class quality" program management.

There also are awards of $6.8 million for developing repository engineering and construction specifications by April 15, 2005; $1.7 million for developing construction designs by Sept. 30, 2005; and $6.8 million upon satisfying Nuclear Regulatory Commission requests for project information.

Potential bonuses for Bechtel SAIC first were reported this week by The Energy Daily, a trade publication. The publication said it obtained contract documents through a Freedom of Information request. Portions of the documents also were obtained by the Review-Journal.

The Energy Daily reported the Yucca contract incentives appeared to be in line with common practice among federal agencies.

A Bechtel SAIC spokesman said any comment would come from the Energy Department. A DOE spokesman referred questions about the contract to the department's Office of Repository Development in Las Vegas, where an official could not be reached.

The documents suggest Bechtel SAIC got a fee of $33 million after completion of the site recommendation that formalized Yucca Mountain for nuclear waste storage in 2001.

The documents indicate the company could earn a maximum $133.2 million in various award fees and performance incentives between April 1, 2001, and March 31, 2006.

It could not be determined Tuesday how much the company already has earned in incentives on top of a $1.7 billion license preparation contract.

The contract states the performance fees are subject to the amounts of money appropriated to the project each year. Congress generally has approved less than the Energy Department has requested.

The contract disclosure prompted new criticism of the Yucca Mountain Project from Nevada state officials.

The potential bonuses "say volumes about why they are rigid about the schedule," said Bob Loux, executive director of the state Agency for Nuclear Projects.

Noting recent audits detailing shortcomings in license preparations, "it's clear they are much more interested in driving a schedule than they are about the quality of the work," Loux said.

"It's outrageous the Department of Energy has come to Congress asking for $880 million this year, and they are using some of that money to give Bechtel a $50 million bonus to keep Yucca Mountain on track to reach some arbitrary dates," said Rep. Shelley Berkley, D-Nev.

A portion of the bonus would be decreased up to 3 percent per day if an NRC decision to docket the application is delayed longer than 91 days "because of contractor deficiencies."