The Associated Press

The U.S. Department of Energy said Tuesday it will give Fluor Daniel Fernald Inc. a two-year extension of its contract to clean up radioactive wastes at the 1,050-acre Fernald site.

The company must improve its health and safety program if it hopes to be granted a third year on the extension, the Energy Department said.

In particular, Fluor Daniel must improve in managing nuclear material and in developing a self-assessment program, the department said.

The company's current five-year contract ends Nov. 30. The extension is from December through November 1999.

John Bradburne, president of Fluor Daniel Fernald, said he expects to meet the government's requirements and win the third year. "The team at Fernald has successfully met some of the most challenging issues at the site, often under intense scrutiny," Mr. Bradburne said.

The Energy Department said it granted the contract extension because Fluor Daniel has accelerated site cleanup, reduced waste inventories, and improved programs for public and employee involvement.

The contract extension is worth up to $27 million a year. Fluor Daniel Fernald is paid an annual base fee of $5.4 million and can earn up to $21.6 million a year in performance bonuses if it meets the Energy Department's criteria. The department's overall budget for the Fernald cleanup is about $260 million a year.

Fluor Daniel Fernald received the cleanup contract in 1992. A series of Enquirer reports revealed the company failed to fully assure employee safety and mismanaged a test project to convert radioactive wastes to glass pellets for long-term storage. In March, another contractor was chosen to handle the vitrification project.

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