New Y-12 contractor says $3 billion in savings, but from where?

6:47 PM, Jan 9, 2013   |    comments
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According to National Nuclear Security Administration officials, much of the savings the newly hired Y-12 management company promised will come from consolidation of "mission support" employees.

They say they'll try to eliminate redundancies in Information Technology, Human Resources, and Finance positions across the multiple nuclear sites they'll manage.

Consolidated  Nuclear Security, or CNS, was awarded the Y-12 management contract Tuesday.

The NNSA says CNS still needs time to analyze the exact composition of the workforce before they'll lay out specifics for cost savings.

They also say while CNS may reduce mission support personnel, they also may "reinvest assets in to highly skilled trades jobs," as well as adding additional 'white collar' engineers. 

They promise a taxpayer cost savings of $3.27 billion over ten years. That's about 14% of the overall value of the $22.8 billion deal.

CNS currently has a baseline deal of five years, with the option for another five year extension.

They have to achieve 80% of their proposed savings by the end of the 3rd year to qualify for any extensions.

CNS stands to earn $40 million a year, over ten years if all their contract options are fulfilled.

They could also net an additional $263 million as their share of cost savings.

NNSA officials say they also learned a lesson in wake of last July's security breech at Y-12.

Officials say it was not the sole determining factor in the bid process.

"It was given it's due consideration, but it was not the single most important factor," according to NNSA officials.

They say the incident taught them the need to consolidate management.

"Operating under the well established concept of 'unity of command,' we absolutely determined we need to go that way," said one NNSA official.

CNS officials are visiting the Y-12 facility this week and the transition is slated to begin immediately.

But there could be a hold up.

NNSA officials will offer debriefing sessions with failed bidders on January 16 to give them feedback on their proposals.

NNSA Deputy Director of Public Affairs Joshua McConaha says failed bidders then have 5 to 10 days, depending on the circumstances, to file a protest with the Government Accountability Office.

He was not able to confirm the names or number of other bidders, but current Y-12 operator B&W released a statement Tuesday revealing their disappointment with the NNSA's failure to select their bid.

A spokesman for B&W said Tuesday they will evaluate their options after the debrief.

McConaha says if one of the other companies does file a protest, CNS will be forced to halt their take over until the GAO has heard complaints.

He says even if protests are filed, all issues should be resolved by the end of the month.

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