Fernald firm gets contract to clean up Hanford

The Cincinnati Enquirer

The company under investigation for alleged financial and safety problems in the Fernald cleanup won a $5 billion contract from the U.S. Energy Department on Tuesday to clean up another nuclear site.

The Energy Department awarded the five-year contract to clean up the former Hanford plutonium production facility in Richland, Wash., to a six-member team headed by Fluor-Daniel.

Part of the Irvine, Calif.-based Fluor Corp., Fluor-Daniel now manages the cleanup of Fernald through its subsidiary, Fernald Environmental Restoration Management Co. (FERMCO).

''We are delighted to have this opportunity to manage Project Hanford and extend our appreciation to DOE for the confidence they have placed in us and our partners,'' said Les McCraw, chairman and chief executive officer of Fluor Corp.

Tuesday's announcement comes while Fluor Corp. and FERMCO are under investigation by the General Accounting Office (GAO), the investigative arm of Congress,for alleged mismanagement and safety problems at the Fernald site, 18 miles northwest of Cincinnati.

The probe was sparked by a series of Enquirer articles documenting a pattern of mismanagement and overcharges by FERMCO that bilked taxpayers out of millions of dollars.

The stories also pointed out the incompetence, and in some cases the complicity, of the Energy Department in the scandal.

The ongoing Enquirer series also prompted investigations and audits by the U.S. Department of Defense's Defense Contract Auditing Agency, the Energy Department's Office of Environmental Health & Safety, and the U.S. Environmental Protection Agency, among others.

Several reports issued so far by the Energy Department's Office of Inspector General, Ohio Field Office and the Ohio Environmental Protection Agency have confirmed many of the problems cited by the newspaper.

A GAO report on the allegations is expected to be released soon.

A team of Energy Department investigators dispatched by undersecretary Thomas Grumbly in March found the allegations to be groundless.

Before awarding the Hanford contract to Fluor, a second group of department officials also found the allegations to be without merit. ''We looked into it and found there was a lot more smoke there than fire,'' Energy Secretary Hazel O'Leary said Tuesday.

Besides Fluor, the companies selected to help clean up Hanford include: Lockheed Martin, Rust Federal Services, Babcock and Wilcox, and Numatec.

Westinghouse Electric Corp., which has been criticized for its poor performance in cleaning up the Hanford site since it took over operations there in 1987, was not included in the new cleanup team.

But Westinghouse was selected to continue overseeing work begun in 1989 at the governmment's Savannah River, S.C., site for another five years. Subsidiaries of Bechtel, B&W Federal Services Inc. and BNFL Inc. also will help with the Savannah River cleanup.

The Washington Post contributed to this report.

Published Aug. 7, 1996.