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Fwd: Privatizing of Nuke Cleanup Failing

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Forwarded message:
Subj:    Privatizing of Nuke Cleanup Failing
Date:    97-07-29 09:22:52 EDT
From:    AOL News

<HTML><PRE><I>.c The Associated Press</I></PRE></HTML>

      By ALICE ANN LOV
      Associated Press Writer
      WASHINGTON (AP) - The Energy Department's first attempt to have
contractors bid on proposals to clean up nuclear weapons waste is a
failure, analysts say.
      ``It simply cannot be completed in the time frame or within the
price agreed to,'' Victor S. Rezendes, director of energy,
resources and science issues for the General Accounting Office said
in a report to a House investigations panel Monday.
      Rezendes said the cleanup project - a 1 acre site in Twin Falls,
Idaho, known as ``Pit 9'' - is already millions of dollars over
budget though contractor Lockheed Martin Corp. has yet to clear a
wheelbarrow full of debris.
      The report says from November 1967 to June 1969, ``various
wastes ranging from contaminated rags to storage drums with
hazardous chemicals and plutonium-contaminated sludge were dumped
... and covered with a layer of soil'' in Pit 9.
      The estimated 250,000 cubic feet of radioactive material - now
including contaminated soil - came mostly from the Rocky Flats
nuclear test site in Colorado.
      ``Pit 9 is more than just an acre of buried radioactive wastes,
and this project's failure must serve to inform ... Congress as we
proceed to clean up the legacy of Cold War wastes buried throughout
this nation,'' said Rep. Tom Bliley, R-Va., chairman of the House
Commerce Committee, which is looking at the cleanup plan.
      In the past, the Energy Department has paid contractors the full
cost of cleaning up such dumps - whatever it turns out to be - plus
a percentage profit.
      But, starting with Pit 9, Energy officials, in an effort to save
money, are experimenting with pre-negotiated, fixed-price
contracts. The department has requested $1 billion for 11 more such
``privatized'' projects in 1998, according to the GAO.
      In October 1994, a subsidiary of the Washington-headquartered
contractor Lockheed Martin won a $179 million contract to cleanup
Pit 9 by February 1999. The project is now 27 months behind
schedule.
      Lockheed says the Energy Department underestimated the extent of
the mess. Company officials have requested $158 million in addition
to $54 million they've already received - payments that would
exceed the full contract price by more than $32 million just to
cover the cost of work through June 30.
      The company also wants to return to the Energy Department's old
cost-reimbursement payment plan and has threatened to stop work.
      Energy Department officials have defended the Pit 9 experiment
with privatization, saying under the old cost-reimbursement method,
the government would have no choice but to pay the cost-overruns.
      With a pre-negotiated contract, Lockheed's request for
additional funds can be ``evaluated on its merits,'' wrote James
Owendoff, an Energy official who responded to the GAO report.
      AP-NY-07-29-97 0633EDT
      <HTML><PRE><I><FONT COLOR="#000000" SIZE=2> Copyright 1997 The
Associated Press.  The information 
contained in the AP news report may not be published, 
broadcast, rewritten or otherwise distributed without 
prior written authority of The Associated Press.<FONT COLOR="#000000" SIZE=3>
</I></PRE></HTML>


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