Energy Officials PLan $31 Billion in Contracts

The Energy Department Wednesday announced plans to open bidding on contracts worth $31 billion over the next five years to operate its laboratories, storage centers and production facilities.

Energy Secretary Hazel O’Leary said that injecting competition into the lucrative business of managing the department’s facilities will “open the doors” of those sites and save billions of dollars. It also will forge a new relationship between the government and its nuclear contractors.

One Energy Department official said that the reforms should reduce the annual costs of running the department’s production and research network by at least $2.5 billion. But the savings will not go to taxpayers. Instead, the money will be used in the $160-billion cleanup of the nation’s contaminated Cold War weapons facilities.

Wednesday’s announcement was the first time that the Energy Department has declared that three of its largest and most complex sites--Savannah River, S.C.; Hanford, Wash., and a test site in the Nevada Desert--will be opened to competition. Contracts for those three sites are worth $17.5 billion over five years and likely will lead to competition throughout the department’s sprawling production and research complex.

The Energy Department also said that it will seek to renegotiate existing contracts worth some $13.5 billion to encourage efficiency.

The department already had announced that it was accepting bids for $8.4 billion in management contracts for its Rocky Flats nuclear weapons production site in Colorado and its Idaho National Engineering Laboratory. In total, including those two sites, the department will put $40 billion worth of contracts on the block over five years.

That figure tops the value of contracts that the Energy Department has opened up for competition over the last 25 years. Only seven times since 1968 has the department forced an existing contractor at one of its facilities to compete with others for the right to continue its management.