Energy agency tells Hanford contractor to return $48 million

YAKIMA – The U.S. Department of Energy has notified the contractor hired to build a waste treatment plant at the Hanford nuclear reservation that it must return $48 million the company has been paid as a performance fee for the project, which has been mired in cost overruns and delays.

The so-called vitrification plant will convert highly radioactive waste into glasslike logs for permanent disposal in a nuclear waste repository. The plant has long been considered the cornerstone of cleanup at the highly contaminated Hanford site.

Under its complex contract with the federal government, contractor Bechtel National could have earned as much as $445 million for building the plant. About $200 million was tied to a so-called cost-performance fee, paid out over the course of the contract, for meeting the plant’s estimated $5.4 billion budget. That budget has since skyrocketed.

So far, the company has been paid $48 million under the cost-performance fee provision. The Energy Department notified company officials by letter Wednesday that it wanted the money returned, saying it is now clear that Bechtel will not qualify for any cost-performance fee. The company has 45 days to respond.

John Britton, Bechtel spokesman, said company officials were still reviewing the letter but would respond in writing later. He also said the cost-performance fee is based on the current contract, which will have to be renegotiated.