The U.S. Department of Energy and the U.S. Navy are looking to consolidate the management of their naval nuclear propulsion laboratories in the Capital Region and western Pennsylvania — a move they say could save the federal government $4.5 million annually.
The federal government is expected this summer or autumn to name a contractor who will manage operations at the Knolls Atomic Power Laboratory in Niskayuna and the Bettis Atomic Power Laboratory in West Mifflin, Pa.
The DOE and the Navy want to install a new manager for those facilities by Oct. 1, meaning that the 10-year management contract Lockheed Martin won for KAPL in 2000 could be cut short by two years. Bids are due May 29 for the contract, which will run through Sept. 30, 2013, with a five-year renewal option.
“It is being done in accordance with the wishes of our customer as a part of their effort to foster a more efficient organization,” KAPL spokeswoman Anne LaRoche said in a statement.
The $4.5 million in savings the federal government expects to realize from the consolidation would come mostly from reduced fee payments to one contractor instead of two, according to Cliff Nunn, a spokesman for the DOE’s Naval Reactors Laboratory Field Office. Bechtel Bettis, a subsidiary of Bechtel National in Frederick, Md., manages the facility near Pittsburgh.
Under the five-year contract, the new manager would be required to maintain the work forces at both labs, which includes KAPL’s 2,100 workers in Niskayuna plus an additional 500 at its Kesselring nuclear training site in West Milton. Bettis employs 3,000. However, redundant managerial positions might be eliminated through natural attrition, said Nunn.
“It’s not a routine contract renewal. … It’s an annual savings to the taxpayer of about $4.5 million a year,” Nunn said.
The federal Naval Reactors Program issued its solicitation for the single management and operation contract Feb. 26. LaRoche said the laboratories’ missions will remain the same. KAPL engineers mostly design nuclear reactors that power attack and ballistic missile submarines.
LaRoche said that KAPL employees’ salaries and benefits will not change under the new management. She noted that the Niskayuna plant is no stranger to management changes.
KAPL dates back to 1946, when the General Electric Co. received a research contract from the Manhattan Engineering District. Four years later, GE started research on small reactors for submarines.
In 1993, the Bethesda, Md.-based Martin Marietta Corp. took over management at KAPL. Lockheed, also of Bethesda, assumed management at KAPL by acquiring Martin Marietta in 1995.
“These [management transfers] were both accomplished without disrupting the people employed at KAPL, and our pay and benefits remained comparable,” LaRoche said.
Engineers at Bettis also design and develop nuclear propulsion plants for naval vessels. The plant was developed on the site of Pittsburgh’s first airfield, which opened in 1925. In 1949, the newly formed Westinghouse Atomic Power Laboratory acquired the airfield, where it later conducted research for the first prototype naval propulsion plant.
The Atomic Energy Commission — the DOE’s predecessor — bought the West Mifflin facility in 1957. Bechtel National became Bettis’ operating contractor in 1999, replacing Westinghouse, according to the DOE.
Bechtel National holds the contract to manage Bechtel Plant Machinery, the defense contractor that designs and oversees the production of nuclear submarines. BPM employs 290 in Schenectady.
In 2006, BPM announced plans to relocate its Schenectady operation, based on Franklin Street, to suburban Pittsburgh. It scrapped those plans after coming under political pressure and being promised $3 million over five years from the state.
However, BPM plans to reduce its Schenectady work force to 130. The company said it will lose 60 workers over two years to retirement and 70 will be transferred to the Pittsburgh area. It will also ship 30 workers to KAPL.
Nunn at the DOE would not say who has submitted bids for the Bettis-KAPL contract. Bechtel spokesman Michael Kidder would not comment on whether the defense contractor would bid on the dual-plant contract. A Lockheed spokesman did not immediately return a call seeking comment Wednesday.
In its February solicitation, the DOE stated that the “government prefers that management responsibility remain with the general manager positions at Bettis and KAPL.”
This would suggest that Lockheed and Bechtel could submit a bid to jointly operate the two facilities. There is no indication whether they are interested in doing so, but they have collaborated in the past to reduce administrative costs and optimize pricing for materials and services at KAPL and Bettis. During the federal government’s 2004 fiscal year, those joint contracts saved KAPL $2.19 million and Bettis $1.53 million, according to the DOE.