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Feds slash WIPP contractor performance pay; LANS must improve to avoid loss of lab contract

SANTA FE, N.M. — Fallout from the radiation leak that shut down the nation’s nuclear waste depository near Carlsbad expanded Tuesday, with operators of both the Waste Isolation Pilot Project and Los Alamos National Laboratory feeling the effects.

The federal government has paid the contractor that operates WIPP only a fraction of its performance fee after the February leak from a drum packed with waste from Los Alamos forced its closure – and has shifted the basis for that fee in 2015, the Journal has learned.

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A discovery team enters a portion of the the underground Waste Isolation Pilot Plant in April, as part of the investigation after a radiation leak from a waste barrel packed at Los Alamos National Laboratory shut down WIPP in February. (Courtesy Department of Energy)

Nuclear Waste Partnership will get just $21,576 of the $6.1 million available in performance-based incentives for fiscal 2014 and none of the more than $2 million available in award fees for running WIPP, according to two documents posted to the WIPP and Department of Energy websites.

As was disclosed Monday, the federal government similarly docked the Los Alamos lab contractor’s performance-based management fee, paying out just $6.25 million of the more than $63 million available to Los Alamos National Security LLC had the private consortium met its contract goals.

And on Tuesday, a DOE spokeswoman provided a statement warning that LANS could lose the contract after 2017 if it doesn’t turn things around.

In Carlsbad, a spokesman for the Carlsbad DOE Field Office said in a statement that while the DOE has “reduced the level of ‘fee’ available” to Nuclear Waste Partnership, it has not made a “final determination” with regards to payment. Spokesman Tim Runyon said the DOE plans to evaluate the contractor’s self-assessment first.

The fiscal 2014 performance pay was supposed to be linked to the amount of waste disposed annually, as well as improvements in infrastructure and efficiency, preventative maintenance and safety.

All of those were found to have suffered in a year in which a truck caught fire underground and a drum of nuclear waste ruptured, contaminating nearly two-dozen workers at low levels.

With WIPP closed for the foreseeable future, NWP is now charged with a cleanup that is expected to cost at least half a billion dollars.

Performance metrics for 2015 have been shifted to reward the contractor for working to recover the facility and for correcting a litany of management problems outlined in two highly critical accident investigation reports. The new metrics are outlined in a “Performance Evaluation and Measurement Plan” document dated Dec. 1.

The performance fee achievable in fiscal 2015, which concludes in September, is the same as what is listed for fiscal 2014: $8.2 million.

On Valentine’s Day, a hot reaction ruptured a drum of nuclear waste from Los Alamos National Laboratory that had been disposed deep underground at WIPP. The repository, which already had been shuttered by an underground truck fire days earlier, was contaminated with americium and plutonium and has been struggling to recover.

Los Alamos fallout

Although investigators still are evaluating exactly what caused the drum to overheat and rupture, they say the Los Alamos drum was improperly packaged with a volatile mix of nitrate salts and organic cat litter used to absorb liquids.

The feds, in addition to dramatically reducing the fee for LANS, also took back a previously granted one-year contract extension for the consortium that includes Bechtel Corp. and the University of California.

The contract with Los Alamos National Security has a “four-strike provision” that vacates the contract if LANS doesn’t earn four one-year extensions, a DOE spokeswoman said Tuesday. LANS has held the contract since 2006,

“Having failed to earn contract term extensions for fiscal years 2013 and 2014,” and with the recent revocation of the previous extension, “LANS must earn (an) award term in every future performance period to keep the contract in force beyond fiscal year 2017,” the DOE statement says.

“LANS has the opportunity to improve performance and with sustained performance, continue to manage and operate the Los Alamos National Laboratory through fiscal year 2023.”

Lab critics have called for dropping LANS and rebidding the contract now.

A Los Alamos lab spokesman said the loss of the previously granted one-year contract extension “underscores how important it is for the Lab to fully address our operational failures and improve the conduct of our operations across the board, all while maintaining our strong science, weapons, and global security mission performance.”

The $6.25 million fee for LANS for fiscal 2014 compares to more than $59 million in fees paid to the contractor in each of the previous two years.

The fiscal 2014 management and operating budgets for WIPP and LANL totaled more than $140 million and nearly $2 billion, respectively.

In two reports on the truck fire and radiation release, investigators reproached WIPP management for cultivating an inadequate safety culture and allowing maintenance failures.

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