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Y-12 Breach Factored in Consolidated Contract For Two Nuclear Sites

By Douglas P. Guarino

Global Security Newswire

The Y-12 National Security Complex in Tennessee, shown in August. A July break-in at the nuclear arms site was among the factors that led the National Nuclear Security Administration to hire a new manager for Y-12 and the Pantex Plant in Texas, officials said on Tuesday (AP Photo/Erik Schelzig). The Y-12 National Security Complex in Tennessee, shown in August. A July break-in at the nuclear arms site was among the factors that led the National Nuclear Security Administration to hire a new manager for Y-12 and the Pantex Plant in Texas, officials said on Tuesday (AP Photo/Erik Schelzig).

WASHINGTON – A 2012 security breach at the Y-12 complex was one of several factors the National Nuclear Security Administration considered when it selected a single contractor to oversee both security and management of the Tennessee site and another key nuclear arms facility, officials said on Tuesday.

Consolidated Nuclear Security will on May 1 take over management of Y-12 and the Pantex Plant in Texas for up to 10 years. While in the past separate contractors have handled operations and physical security of the sites, the company -- which was formed by Bechtel National, Lockheed Martin, ATK Launch Systems and SOC -- will handle both responsibilities under the new regime.

Following the July incident in which an 82-year-old nun and two other peace activists were able to infiltrate the Tennessee facility, site manager B&W Y-12 cut ties with the subcontractor that was in charge of security.

The contract to take over future management of Y-12 and the Pantex Plant was out to bid at the time of the intrusion. The agency asked bidders to withdraw their proposals and gave them an additional 30 days to submit new plans that included operations and security for both sites, Neile Miller, NNSA principal deputy administrator, explained during a conference call with reporters.

It had become apparent to agency leaders that they needed to embrace a “concept of unity of command,” said Miller, who will become acting NNSA administrator when current chief Thomas D’Agostino retires on Jan. 18. “We absolutely determined we needed to go that way,” she said.

In light of the Y-12 incident, the past performance of companies bidding for the contract was a key factor considered when determining which firm would be awarded the new contact, said Michael Lempke, NNSA associate principal deputy administrator. However, “past performance factors, while considered with others … were not the determining factor when selecting a successful offer,” Lempke said.

According to Lempke, NNSA officials looked for the “best overall value to the government.” There was “not a signal determining factor that carried the day,” he said.

Consolidated Nuclear Security would receive a total of $22.8 billion if the initial five-year contract is extended with another five-year option, Lempke said. This would represent a savings to the government of more than $3 billion, according to the new contractor’s projections. Lempke attributed the savings to redundancies that can be eliminated through merging of operations and security responsibilities at the two sites in areas such as human resources, purchasing, information technology and finance.

The firm would receive the contract extension if it achieves 80 percent of the projected savings by the end of the third year, Lempke said.

At Y-12, the company will oversee various nuclear arms and nonproliferation operations, including refurbishing warheads, processing highly enriched uranium for submarine reactors, and ensuring the security of materials from weapons that have been retired or disassembled. It will also manage assembly and dismantlement of nuclear weapons at Pantex, in addition to physical security at both sites.

D’Agostino said the new contract represents a major step in a 3-year-old effort to boost efficiencies and transform “an old Cold War nuclear weapons complex into a 21st century nuclear security enterprise.” Other steps have included the consolidation of special nuclear material at a limited number of sites – which was completed last year – and the combining of infrastructure and operations responsibilities under Lempke, he said.

“In my view it is a very important day for the NNSA,” D’Agostino said. “It was challenging but it’s important and will push NNSA into the future in a way that makes sure we are looking out in the best possible way for our taxpayer dollars.”

The agency's inability to stick to cost and schedule projections for major projects in overseeing the nation’s nuclear arms complex has been a routine criticism in recent years. An acknowledgement last fall that the current design for a new uranium processing facility at Y-12 was too small has been among its recent issues.

Babcock & Wilcox, which had previously joined with Bechtel to manage Y-12 and Pantex, issued a statement on Tuesday expressing disappointment that it had not been selected to continue its work. The company said its proposal “was a very strong choice for moving closer to NNSA’s vision of a consolidated nuclear security enterprise.”

The company maintained Y-12 and Pantex had made “great accomplishments” during the past 12 years. Y-12 increased dismantlements and production capacity while Pantex “met or exceeded all dismantlement and production goals over the last five years while maintain an impressive safety record,” according to the statement.

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