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Award of 10-year, $45 billion Hanford contract challenged for a 2nd time by losing bidder

The award of a contract worth up to an estimated $45 billion for environmental cleanup work at the Hanford nuclear site in Eastern Washington has been challenged for a second time.

The losing bidder for the contract, Hanford Tank Disposition Alliance, or HTDA, said in a new lawsuit filed in federal court that the Department of Energy unfairly changed the rules of its solicitation to award the contract to Hanford Tank Waste Operations & Closure, called “H2C,” for a second time.

The 10-year contract covers work at the Hanford site tank farms, where 56 million gallons of radioactive waste are stored in underground tanks, and operation of the vitrification plant to treat some of the tank waste for disposal. Some of the work ordered under the contract could continue longer than 10 years.

DOE awarded the contract to H2C for the first time in April 2023. H2C is made up of BWXT Technical Services, Amentum Environment and Energy, and Fluor Federal Service.

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The contract award was challenged then by the only other bidder, HTDA, which was formed by Atkins Nuclear Secured, Jacobs Technology and Westinghouse Government Services. In November Jacobs announced plans to merge some of its business lines with Amentum.

In June U.S. Judge Marian Blank Horn ordered the contract to be set aside, finding that H2C was ineligible for the award because it had not met a mandatory requirement in the bidding process, registration in the U.S. System of Award Management.

The Hanford vitrification plant is planned to be ready to start treating some radioactive waste for disposal in 2025.
The Hanford vitrification plant is planned to be ready to start treating some radioactive waste for disposal in 2025.

H2C was registered when the process started but allowed its registration to lapse for five months, including when H2C submitted its final bid for the contract.

After the judge invalidated the first contract award, DOE asked for revised proposals.

It also changed federal acquisition regulations to say that a bidder must be registered when submitting an offer and it deleted the requirement that registration continue through the time of the award, according to HTDA’s legal challenge.

At the end of February DOE again awarded the contract to H2C.

Hanford award called unlawful

The regulation change to qualify H2C for the contract award is a breach of HTDA’s contractual rights, as well as a violation of DOE regulatory obligations of impartiality and fairness, HTDA said.

DOE should have published the change in contracting requirements in the Federal Register and completed the statutory notice-and-comment rulemaking process before applying it to any procurement, HTDA said.

“DOE has moved the goalpost after the fact to reflect the place where H2C’s football has already landed,” HTDA said in a court document. “But for that goalpost-moving, H2C’s proposal would remain ineligible for award and HTDA’s own highly rated and reasonably priced proposal would be selected for award.”

HTDA accused DOE of “going to extraordinary lengths to avoid awarding the contract to a compliant competitor with a similarly evaluated proposal and a fair and reasonable price.”

The court filing by HTDA was heavily redacted by the courts, including the specific evaluation ratings for HTDA. But H2C’s proposal received an “outstanding” rating for key personnel and “good” ratings for past performance and management approach, the court document said in an unredacted section.

Environmental cleanup is underway at the 580-square-mile Hanford nuclear reservation. The underground radioactive waste storage tanks and the vitrification plant are in the center of the site.
Environmental cleanup is underway at the 580-square-mile Hanford nuclear reservation. The underground radioactive waste storage tanks and the vitrification plant are in the center of the site.

HTDA is asking the court to overturn the contract award to H2C and to declare the award “arbitrary and capricious, an abuse of discretion and otherwise not in accordance with law.”

HTDA also wants DOE to be directed to re-evaluate proposals in accordance with the original terms of the contract process.

The contract covers initial operation of the vitrification plant, after commissioning is completed for the start of glassifying some of the least radioactive tank waste for disposal. Commissioning by Bechtel National, which is building the plant, is expected to be completed next year.

The waste has been stored in underground tanks, many of them prone to leaking, since as early as World War II. The contract covers management of the tanks, including emptying and closing the tanks, and preparing some of the waste to be sent to the vitrification plant for treatment.

Washington River Protection Solutions, owned by Amentum and Atkins, now holds the contract for tank farm work. In July 2023 after the first award to H2C was contested, DOE announced that its contract would be extended up to two more years.

The Hanford nuclear reservation adjacent to Richland, Wash., was used from WWII through the Cold War to produce nearly two-thirds of the plutonium for the nation’s nuclear weapons program. Now about $3 billion a year is spent on environmental cleanup of radioactive and hazardous chemical waste and contamination at the 580-square-mile site.