A new nuclear weapons contract leave problems unaddressed, but produces big profits for the management contractor. - Patrick Malone - The Center for Public Integrity - Thursday 5/10

A new nuclear weapons contract leave problems unaddressed, but produces big profits for the management contractor.
Patrick Malone
The Center for Public Integrity
Thursday 5/10


For most of its 8 years in power, the Obama Administration juggled a lot of views of America’s nuclear weapons program, about the strategic, tactical, political and moral value of nuclear weapons, when, where and how they might ever be used.

But on one thing everyone from the President on down agreed on was – they cost too much.  By 2010, the second year of the Obama Presidency, the National Nuclear Security Administration had been tasked with cutting costs, and quickly produced an idea: put 2 nuclear weapons plants, at the time being operated separately, under one management umbrella.  Chicago-based Navigant Consulting was hired by NNSA to study the idea and they predicted this “reform” could save close to $900 million over 10 years.

By December 2011, bids were let on a new contract for single management of the 2 plants.  There were 3 bidders. One was led by Fluor Federal Services, one was led by Bechtel National and one was led by Babcock & Wilcox Technical Services Group, which did enjoy an enormous advantage: it had for years run both the 2 separate plants as separate entities.

The Energy Department experts who examined the 3 bids gave a strong recommendation that Babcock & Wilcox continue to run the joint operation, but at the last minute, a politically-appointed DOE deputy director intervened and tipped the scale to Bechtel.

The losers cried foul, and a GAO investigation upheld them and demanded a re-bid.  Round 2 – the experts said Babcock and Wilcox, but a different Deputy Administrator said Bechtel, and so it was.  One of the most respected defense analysts in Washington says this sure looks like the deal was fixed from the start.

One reason Bechtel won the bid may have been that it promised to cut costs more than anyone else, predicting savings, not of $900 million like the consultant, but almost $3.3 billion over 10 years.  How? By cutting payroll and cutting medical benefits for surviving workers. Cruel, perhaps, but, hey, those fine Liberal Democrats of the Obama group had no beef with the plan and, despite warnings from examiners of both rounds of bidding that that the projected savings were…in the word of the deputy administrator who had run the bidding to within 8 days of the first awarding…”bullshit.”

There’s a good reason why running the Pantax plant in Amarillo, TX and the Y-12 complex at Oak Ridge, TN were separate operations; they did entirely different things, requiring entirely different skill sets, and utilizing entirely different personnel.  Nothing about Pantax and Y-12 was interchangeable much less combinable.

So, the “traditional” savings of 2 into 1 management consolidations, redundant job sets that can justify sharp reductions in personnel, didn’t exist here.  The Pantax people had for years been performing satisfactorily under Babcock & Wilcox disassembling old nuclear weapons, removing their cores, testing them, and putting the heart of the weapon into a new shell; just as the Y-12 workforce had consistently produced “the highly enriched uranium components that fuel a nuclear blast.”

The Bechtel-led CNS group cut both workforces in 3 ways – in sheer numbers, more than 1300 employees were RIF-ed … by cutting older, more experienced, more expensive workers for new ones … and by shifting payroll by taking people off the work-floor and replacing them with “management” personnel.  None of this has come close to producing the promised savings written into the contract.

All of this can rightly be charged to the Obama Administration, but in 2017 the Trump Administration took over and where the Pantax/Y-12 Management Agreement is concerned, and enormous changes took place.



Patrick Malone joined the Center for Public Integrity in May 2015 to cover national security. He spent 20 years reporting on justice, politics and deep investigations for newspapers in Colorado and New Mexico, most recently at The Santa Fe New Mexican. The Associated Press Media Editors recognized his work with honorable mention in the public service category of its national Journalism Excellence Awards for reporting that uncloaked secrets behind a radiation accident caused by Los Alamos National Laboratory in 2014. Malone also received a national award for health care policy reporting from the Association of Health Care Journalists for an expose in 2014 that revealed how hospitals leverage inflated consumer health care costs into tax breaks. He has received dozens of regional journalism awards for his coverage of cover-ups involving sexual abuse by Catholic priests, culture and corruption inside the Colorado prison system, and money and influence in politics, among other subjects.







Subscribe to insider notes from Dave Marash along with previews and cartoons of upcoming podcasts. You’ll be richer, taller, and if you don’t eat, thinner.


Here & There is kept afloat by wonderful sponsors and curious listeners like you. Your support is appreciated!