Department of Energy, ATTN: Document Control Specialist, P.O. Box 2500, Washington, DC 20013

R -- PRIVATIZATION OF FACILITY DEACTIVATION POC Ms. Irie White, Contract Specialist, (202) 634-4466, David Leotta, Contracting Officer, (202) 634-4409 BACKGROUND The Department of Energy, Office of Environmental Management (EM) is responsible for deactivating nuclear facilities surplus to the Department's needs. By ''deactivation'' is meant removing the bulk of the radioactive and hazardous materials from a facility so aws to reduce the potential hazard and to minimize the the surveillance and maintenance (S&M) cost. S&M activities are required to ensure that the public and workers are protected from the hazards of the facility and to preserve the capital investment. They typically include operating and maintaining electrical, service water and ventilation systems, operating and maintaining safety systems, providing security services, taking routine readings on equipment, correcting problems found, and replacing wornout equipment. S&M costs for a nuclear facility are quite substantial and continue as long as a facility exists but decreases significantly, on the order of 90-95% upon completion of deactivation. The magnitude of the S&M cost is largely determined by the hazard represented by the material in the facility. For example, the presene of nuclear fuel containing highly enriched uranium in a reactor spent fuel storage basin requires a higher level of S&M activities, including security, than does an empty basin. The Office of Facility Transition and Material Stabilization (EM-60) within EM is responsible for facility deactivation. Deactivation of existing surplus facilities could save hundreds of millions of dollars relative to continuing to pay S&M costs, but sufficient funding is not available to perform all the available deativation projects without taking funds from projects which either have higher safety priorities or are governed by legal agreements as regards to their schedules for accomplishment. To enable the acceleration of deactivation activities at surplus facilities, DOE is considering the issuance of a solicitation which would enable the placement of contracts for deactivation of DOE facilities using private funding, with the contractor paid from the S&M savings resulting from the reduction in cost to the Department resulting from the deactivation. Legislation may be needed to authorize this project. The intent is to enable early commencement of possible zero funded deactivation projects and earlier completion of other deactivation projects without an increase in annual funding levels. This will result in substantial cost savings in future years after deactivation is completed. The approach on which comments are solicited is outlined as follows: (1) DOE would define the deactivation project scope; (2) The contractor would obtain financing for the deactivation project from the private sector; (3) DOE would place the contract with zero obligated funds; (4) The contractor would perform the work to the contract requirements. The contract would define the scope of work, applicable requirements and the means of calculating the cost savings from which the contractor would be paid; (5) DOE would pay the contractor a share of the cost savings (up to 100%) resulting from deactivation until the Department's obligations to the contractor were met. All payments would be from cost savings. Payment would be contingent on availability of appropriated funds. The contract would contain ''Termination for Convenience'' and Suspension of Work'' clauses, as well as other clauses required by FAR and DEAR; (6) DOE would retain ownership of the facility during deactivation if those materials would remain on site pending final disposition. SPECIFIC INFORMATION SOUGHT BY THE DEPARTMENT The Department is interested in obtaining comments and questions from interested parties in the following areas: (1) What specific information, term, conditions, and other assurances would a vendor view as necessary for a fixed price, pay from savings deactivation contract? (2) What period of time for payment of DOE's contract obligations would be viewed as commercially viable, e.g., payments beginning following year 1, year 3 or year 5 or more? (3) What limit, if any, would a vendor expect on the magnitude of private financing available for a deactivation project? (4) What size contract should be attempted under the proposed approach, e.g., $1M pilot, $10M, $100M? (5) What information on regulatory standards, permits, and regulations would be needed for a competitive fixed price procurement? (6) Interested firms should state their willingness and ability to borrow private funds to complete a deactivation project of up to $100M in total cost before being paid. What assurances or guarantees would be required from DOE to enable a vendor to obtain private financing to cover the costs of the deactivation projeact? (7) DOE's Management and Operating (M&O) contractors have personnel qualified to operate the facilities being considered for deactivation under this methodology. Not all deactivation work requires the use of facilities being deactivated, but where operation of those facilities is required, how would the vendor propose to either replace or to utilize the necessary skills to accomplish the deactivation in the most expeditious and efficient manner? (8) Part of the deactivation work will require use of existing facilities, e.g., ventilation systems, fluid systems, lifting and hoisting equipment, This equipment will require preventive and corrective maintenance. During the deactivation work how would the vendor propose to allocate responsibility between DOE/M&O contractor and the vendor for each type of maintenance? To discuss issues and address any comments or concerns, the Department has scheduled a meeting for May 1, 1995. The meeting will be held at U.S. Department of Energy, Forrestal Building Auditorium, 1000 Independence Avenue, SW, Washington, DC 20585. The time of the meeting shall be from 9:00 am until 1:00 pm. All interested parties are invited to attend. (0104)

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