Consolidating the management of two critical sites where nuclear weapons are assembled would yield huge taxpayer savings, the National Nuclear Security Administration (NNSA) promised in 2013 — as much as $3.27 billion over a decade.
Hundreds of millions of dollars in savings were to be spent on the modernization of the nuclear weapons production complex, and billions of dollars were to revert to the public treasury. The government was so pleased with the promised benefits that in 2015, it gave one of the department’s highest awards to the 14 sharp-eyed officials who processed the single-contract paperwork.
But four years after the consolidated contract was won by Consolidated Nuclear Security (CNS) LLC, a group of corporations led by Bechtel National Inc., there’s not much to celebrate, government documents and reports show.
In particular, much of the promised quick savings haven’t shown up, while the annual federal costs of running and overseeing the two sites — the Pantex Plant in Texas and the Y-12 site in Tennessee where nuclear weapons are disassembled and modernized — have risen more than 30 percent from nearly $1.85 billion to $2.48 billion. Despite these numbers, the government still awarded the contractor extra profits for cost savings.
As a result, the funds needed to keep these two vital sites operating over the next decade threaten to eat up a sizable chunk of the new money the Trump administration wants to spend upgrading the safety, security and quality of the U.S. nuclear arsenal, and enlarging its size. The cost increase, combined with rising fees for nuclear weapons work and physical modernization needs at other facilities, casts doubt on whether Trump’s ambitious nuclear agenda can be completed.
An examination of the contract award by federal auditors also revealed that the evaluation process – which parsed bids from some of the nation’s largest defense contractors — was marked by unusual actions that helped Bechtel’s group win the bid. And a powerful lever to force the Bechtel-led firm to achieve as much savings as possible was quietly removed from the contract last September, making it easier for the firm and its partners to win lucrative contract extensions.
That move, which effectively rewarded the Bechtel group for failing to show it could achieve promised economies, preserves its opportunity to collect up to $660 million in profit over a 10-year period, during which the country’s overall nuclear weapons production efforts are slated to cost $400 billion, according to the Congressional Budget Office.
The savings that CNS initially promised were supposed to come from cutting what the corporations and their federal overseers claimed were excess jobs and employee benefits at the Texas and Tennessee sites. But key lawmakers and congressional staff in Washington have said this aim was misguided from the outset, coming as it did just as the Department of Energy was launching, at the Obama administration’s direction, a three-decade-long trillion-dollar weapons modernization program, which would seemingly require many new personnel.
“It raises an interesting question: Did the left hand talk to the right hand?” said Gordon Adams, a former White House national security budget official, about the process.
Many workers at the plants have chafed under the new management approach and complained about its consequences, noting in a confidential staff survey that they feel profit has been prioritized over safety. Those workers have been startled to learn abruptly of lost medical benefits at the same time they say their work has become more dangerous due to staffing vacancies.