Tuesday, July 8, 1997
Fluor penalized $6.6 million
DOE penalties now top $36 million

BY MIKE GALLAGHER
The Cincinnati Enquirer

The U.S. Department of Energy has again penalized the company managing Fernald, this time a record $6.6 million for numerous problems, including poor performance, a troubled cleanup project, worker injuries and other safety program failures.

The penalty represents more than 58 percent of the performance-based fee Fluor Daniel Fernald was eligible to receive during its last review period, Oct. 1, 1996, through March 31, 1997.

Every six months, Fluor Daniel Fernald is eligible to earn $10.8 million in a performance fee (its profit for managing the site) based on a point system tied to the company's success or failures on cleanup.

The company was eligible to receive $11,340,000 this period because of fee criteria that were rolled over from a previous period.

With the penalty, the company received only a $4,725,000 performance fee in its latest review. The company also was paid an additional $2.7 million in a guaranteed base fee just for being at the site.

Since Fluor Daniel Fernald (formerly FERMCO) was awarded the $2 billion cleanup contract in December 1992, it has been penalized more than $36 million by the Energy Department for various safety, cleanup, design, construction and off-site waste shipment problems.

During its previous six-month review period (April 1 through Sept. 30, 1996), Fluor Daniel Fernald was penalized almost $4 million for poor performance.

Since 1993 when the performance fee award system was set up, Fluor Daniel Fernald has received $39,305,769 out of a possible $76,140,000 because of penalties, according to Energy Department records. During the same period, the company received an additional $18.9 million for being at the site.

Fluor Daniel Fernald spokeswoman Tricia Thompson said Monday, "We stand by the (Energy Department's) evaluation, and we always strive to improve our performance."

Energy Department spokesmanGary Stegner declined to comment. The problems that Fluor Daniel Fernald were penalized for in its most recent review period, according to an Energy Department report released Monday, included:

  • Several "near miss" events (incidents where employees either were or could have been injured), including the inadvertent removal of a lid from a pressurized drum; an employee being struck during a scrap metal removal process; and problems with the safe operations of electrical power sources.

  • Failure to implement a mandatory safety program.

  • Failure to meet mandatory U.S. EPA and - or Energy Department completion dates for such things as cleanup project deadlines.

  • Failure to complete testing of a pilot vitrification project.

Among the more serious findings, the Energy Department found problems with the company's Nuclear Criticality Safety performance by Fluor's line management.

Nuclear criticality is the dangerous buildup and release of radiation that can occur when drums of certain radioactive wastes are stored too close together.

In its most recent review of Fluor Daniel Fernald's handling of the sites' nuclear-waste stockpile, the Energy Department found that members of Fluor's on-site management "demonstrated a lack of knowledge and appreciation for the established safety basis for the site . . . indicated by the exceedance of the authorization limit for storage of nuclear materials at the KC-2 warehouse."

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