Free Supplemental Brief - District Court of Federal Claims - federal

Case 1:91-cv-01362-CFL

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Defendant's Supplemental Exhibit 66

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UNITED STATES DEPARtmENT OF ENERGY AWARD FEE DETERMINATION

PLANT

CONTRACT NO.: DE-AC04-76DP03533 CONTRACTOR: Rockwell International. Corporation PERIOD: October I, 1988 - March 31, 1989

I hereby determine an award fee of $2~909-~-215. This determination is based on the attached memorandum frcm John L. Meinhardt, Acting Assistant Secretary for Defense Programs, and the attached Performance Evaluation Report.

Bruce G. Twining ~ _~j Manager Albuquerque Operations Office Award Fee Determination Official

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RECOMMENDED AWARD FEE CALCULATION ROCKWELL INTERNATIONAL FOR PERIOD OCTOBER i, 1988 THROUGH MARCH 31, 1989 PRMP/PROVE FUNCTIONAL PERFORMANCE AREA PROJECT MANAGEMENT COST ~LANAGEMENT SCHEDULE PERFORMANCE SUBCONTRACT MANAGEMENT DESIGN QUALITY TECHNICAL PRODUCT QUALITY. TOTAL PERFORMANCE POINTS EARNED 0 - 70 71 - 75 76 - 80 PREVIOUS 6 MONTHS WEIGHT 0 0 0 0 0 0 RATING 0 0 0 0 0 0 CURRENT 6 MONTHS RECOMMENDED WEIGHTING

WEIGHT .25 .15 .15 ..... ". .20 .15 .i0

RATING 75 76 86'.:. 82 78 76

GRADE 18.75 11.40 ~ 12~9016.40 11.70 7.60

0

0 AWARD FEE PER POINT

1.00

78.75

AWARD FEE

$

-015,509 x 5.0 29,079 x 3.75

$ -077,545 109.046 $186,591 TOTAL $240,441 TOTAL $1,023,150

BASE FEE $53,850 BASE FEE $53,850 ,

RECOMMENDED AF $186,591 MAXIM~ AF $969,300

ACTUAL AWARD FEE VX. MAXIM~ AWARD FEE OF TOTAL ACTUAL FEES VS. TOTAL MAXIMLrM FEES

19.25% 23.50%

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RECOMMENDED AWARD FEE CALCULATION ROCKWELL INTERNATIONAL FOR PERIOD OCTOBER I, 1988 THROUGH MARCH 31,

1989

PLANT
FUNCTIONAL PERFORMANCE AREA GENERAL MANAGEMENT COST MANAGEMENT QUALITY CHEMICAL OPERATIONS PRODUCTION OPERATIONS ENVIRONMENT, SAFETY " AND HEALTH TOTAL PREVIOUS 6 MONTHS WEIGHT .25 . 15 .15 .10 . 15 ¯ 20 RATING 92 97 97 84 97 81 CURRENT 6 MONTHS RECOMMENDED WEIGHTING WEIGHT RATING GRADE

.25 .15 .15 .i0 .15 .20

81

20.25 14.25

95
88
91 96 65.25

9.10 14.40 13.05

I. O0

91 ¯ 25

1.00

84.25

PERFORMANCE POINTS EARNED 0 71 76 81 70 75 80 85

AWARD FEE PER POINT
--0-$

AWARD FEE
--0--

109,152 x 5.0 204,660 x 5.0 270,015 x 4.25

545,760 1,023,300 1,147,564 $2,716,624 TOTAL $3,095,624 TOTAL $7,201,000

BASE FEE $379,000.~ BASE FEE $379,000

RECOMMENDED AF $2,716,624 MAXIMUM AF $6,822,000

% ACTUAL AWARD FEE VS. MAXIMUM AWARD FEE % OF TOTAL ACTUAL FEES VS. TOTAL MAXIMUM FEES

39.8% 43.0%

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UNITED STATES DEPARTMENT OF ENERGY AWARD FEE DETERMINATION

PRMP/PROVE

CONTRACT NO.: DE-AC04-76DP03533 CONTRACTOR: Rockwell International Corporation: .~ PERIOD: October i, 1988 - March 31-,i~989'

I hereby de~ermine an award fee of $ 186~591 This determination is based on the attached Performance Evaluation Report.

Bruce G. Twining ~ Manager Albuquerque Operations Office Award Fee Determination Official

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PERFORMANCE EVALUATION ROCKWELL INTERNATIONAL CORPORATION CONTRACT NO. DE-AC04-76DP03533 FOR THE PERIOD OCTOBER i, 1988 - MARCH 31, 1989

The overall performance of Rockwell International Corporation (Rockwell) has been maintained at least at a level of "Satisfactory" during the period October i, 1988, through March 31, 1989. The fo$1owing is an evaluation of the performance of Rockwell, relative to the management and operation of the Rocky Flats Plant, including the performance for the Plutonium Recovery Modification Project (PRMP)/Plutonium Recovery Option Verification Exercise(PROVE), in the Functional Performance Areas (FPA's) selected for award.~fee evalua~ion.~:The ~irst:section~ove.r~.~.~ Plant operations while the second section covers-PRMPYPROVE~'- The Genera~ .... Management FPA was evaluated considering performance for both areas. The selected FPA's for Plant operations have been evaluated in accordance with the contract Award Fee Plan, and the following discussion of each FPA and resulting award fee earned reflects an integrated assessment of all factors.

PLANT
GENERAL MANAGEMENT: Significant improvement has been made in many important Plant functions during the appraisal period. While continued improvement is needed in many areas, Rockwell has done a remarkable job of pushing for and achieving recent improvements under extreme pressure. Interplant schedule compliance continued at 100% for the third consecutive rating period. There was a rapid resolution to the problem of obtaining United States Department of Transportation approval for using a modified ATMX railcar for making the first shipment of Transuranic mixed waste in 1989. The Emergency Preparedness organization has a well-planned and effective program, is involved in Albuquerque Oper~ions Office (AL)-wide coordination activities, and continues to make improvements. A Rockwell "We Do Care" program was developed to address the maintenance work order backlog. In less than four years, Rockwell has exceeded a ten-year Energy Conservation Goal. In addition, Rockwell completed an automated logging system~in all major production and support buildings, l~nadequate project staffing for the PRMP continues to influence Rockwell's >erformance.

COST MANAGEMENT: Good data and narratives provided by Rockwell to define Department of Energy (DOE)unfunded Environment, Safety, and Health requirements in an FY89 supplemental budget request were also used to support DOE requests to Congress for additional FYgO funding. Rockwell has done an extraordinary job of tracking information and preparing responses to a large variety of budget information requests and of maintaining the current status of its requirements. In addition, construction project data sheets and conceptual design reports supporting Capital Budget requests were both of high quality and ahead of schedule. Budget narratives were improved and expanded and were helpful in DOE's analysis of Rockwell's resource requirements.

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QUALITY: Significant progress has been made towards implementing the Nonweapons Quality Assurance (NWQA) NQA-I Standard at Rocky Flats. More specifically, NWQA activities conducted during the Building 771 restart have resulted in a significantly improved quality program to be used in the operation of the building. For War Reserve Quality Assurance, Rockwell is implementing Phase 2 of the Quality Improvement Plan which will continue a new culture in. quality practices and should lead to further improvement in the Quality Assurance program. In Nondestructive Testing, an alert technician identified an anomaly in the X-ray film which lead to the detection of a defective process in another AL plant. This kind of effort reflects a work ethic that ensures a quality product for the DOE. There were thre~incidents which came to DOE's attention where Rockwell failed to provide the necessary measures~-t~-adequ~ely~,=o~tro~no~confommim~produ=t~!.~f,-.~ material.

CHEMICAL OPERATIONS: Noteworthy progress has been made towards the implementation of the Operational Readiness Review (ORR) program as demonstrated through ORR's in Building 771 a~d elsewhere. Rockwell has also successfully completed the deve!opment of a new extractant compound for use in the Molton Salt Exrractiom~"process. Bothof these-accomplishments will yield safer and more controlled production processes while maintaining or improving production performance.

PRODUCTION OPERATIONS: Significant progress has been made on the-number one priority for this year, excellence in facility operations, by the development of a Nuclear Facility Operations Manual and the active support of the AL effort to develop an Operational Surety Program. Rockwell has taken several steps to reduce work in process inventories and process times by, among other things, reduced planned process times in Building 460, reduced pit assembly process time in Building 707, and reduced lot sizes on the 3T bodies.

ENVIRONMENT, SAFETY, AND HEA~TH: Progress towards achieving a high quality training program and the establishment of a new pilot radiation safety course are among the notable, achievements in the radiation protection area. Rockwell has.demonstrated good, responsiveness in the preparation and coordination on National Emissions standards for Hazardous Air Pollutants issues specific to the Rocky Flats Plant'and has contributed to the DOE-wide review of this regulation. Significant progress has been made towards reducing the rate of radiological incidents. Several positive steps have been taken towards achievement of a permanent reduction in plant personnel radiation exposure. In the safety program, substantial corrective actions are underway, including the development of an integrated safety program. A Safety Review Group has been established and its. efforts during the period were commendable.

2

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The shutdown of Bi~ilding 771, resulting despite earlier identification of safety problems, created major disruptions to the commitments for processing of plutonium. An unintentional release of dilute chromic acid revealed inadequate procedures for the reporting and coordination of discovered releases to the sewage treatment plant with downstream control of contamination. Rockwell's housekeeping of production buildings has not improved adequately. Although a downward trend has been achieved during the first five months of FY89, no significant progress in reducing the wound rate has yet occurred. Rockwell has been unable to resolve the 1988 National Pollutant Discharge Elimination System permit violations for five-day biochemical oxygen demand. Regarding the East Firing Range, Rockwell has taken no action to date in response to concerns about its safe operation. The ES&H management oversight of Building 771 operations after the January 19, 1989, phased restart was inadequate. ~..

PRMP/PROVE

PROJECT-MANAGEMENT: Rockwell has given PROVE renewed emphasis by separating responsibility for PROVE from that of the PRMP and placing it under a fulltime projec~manage~r. The recen~yimp~emented "Precursor~Plan" represents an improvement in direction for the entire project and was implemented with professionalism and enthusiasm. Overall PRMP management attention to project technical, cost, schedule, and manpower need was inadequate. In addition; inadequate project staffing continues to influence Rockwell's performance.

COST MANAGEMENT: Cost development and baselining of costs for the "Precursor Plan" have been handled with the highest degree of quality. Rockwell's redirection of J. A. Jones' manpower planning on PROVE resulted in reduced costs and apparent increased construction productivity. PROVE continues to demonstrate cost growth. PRMP cost planning far exGeeded available project funding allbcations.

SCHEDULE PERFORMANCE: :~Rockwell has successfully resolved several problems which were impacting sdhedule in the PROVE area. The diligent effort by Rockwell, Bechtel, and J. A. Jones in the joint development of the Precursor planning has resulted india comprehensive schedule that should provide a smooth transition from PROVE to the receipt of capital funding for PRMP. The PROVE schedule has deteriorated during the reporting period, extending the PROVE end date from 1/90 to 8/90.

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SUBCONTRACTMAnAGEMENT: Rockwel!, consistent with project technical needs and evolved cost and schedules, has provided rapid and effective subcontract redirection of Bechtel. Rockwell subcontract management of J. A. Jones has ensured J. A. Jones' participation in construction planning. Rockwell has been successful in obtaining aclive participation and commitment from the National Laboratories and other Rockwell 9rganizations on the PRMP Precursor Program. The subcontract workwith the PROVE glovebox manufacturer has resulted in the need for significant rework to the glovebox piping and piping penetration welds. Line Item and cost/schedule activities over the balance of the FY89 demand that Rockwell provide continuous site representation at Bechtelo DESIGN QUALITY: The quality, has been initiated with broad based involvement. Use of the Configuration Control System for PROVE has been greatly improved. The quality of the existing PROVE engineering has been poor, and chanBe orders to correct poor initial design quality are reflected in cost growth.

TECHNICAL £RODUC~ QUAliTY: PROVE-activities in addressing and rectifying glovebox welding problems are directed towards, and should significantly improve, technical product quality. Welding problems recently surfacing on the PROVE glovebox indicate a significant lack of technical product quality success.

4

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RECOMMENDED AWARD FEE CALCULATION ROCKWELL INTERNATIONAL FOR PERIOD OCTOBER i, 1988 THROUGH MARCH 31, PLANT FUNCTIONAL PERFORMANCE AREA GENERAL MANAGEMENT COST MANAGEMENT QUALITY CHEMICAL OPERATIONS PRODUCTION OPERATIONS ENVIRONMENT, SAFETY AND,.~HEALT~, TOTAL PREVIOUS 6 MONTHS WEIGHT °25 .15 .15 RATING 92 97 97

1989

CL~RENT 6 MONTHS RECOMMENDED°WEIGHTIN~7~ WEIGHT .25 .15 ¯ 15 .i~ / RATING~RADE 23.00 /~/ 14.25 /95 / 95: 14.25 91 96 9.10. 14.40 16.20

.i0
¯ 15

,84
97

.20

81

,/"

.20
i .00

81

91.20

PERFORMANCE POINTS EARNED 0 71 76 81 86 70 75 80 85 90 92

AWARD FEE P/ER POINT -0//$ ," !09:!52 x 5.0 204,660 x 5.0 270;0.15 x 5.0 354,744 x 5.0 532,457 x 1.0 505,851 x 0.2
$

AWARD FEE
--0--

/ / /

545,760" 1,023,300 1,350,075 1,773,720 532,457 101,170 $5,326,482 TOTAL $5,705,482 ~TAL $7,201,000 78.08% 79.23%

RECOMMENDED AF $379,000 BASE F~E O0 ' $5,326,482 MAXIMUM AF $6,822,000

o$ CTUAL AWARD ~EE VX. MAXIMUM AWARD FEE

~

OF TOTAL ACTUAL FEES VS. TOTAL MAXIMUM FEES

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RECOM~ENDED AWARD FEE CALCULATION ROCKWELL INTERNATIONAL FOR PERIOD OCTOBER I, 1988 ~ROUGH MARCH 31, 1989 PRMP/PROVE FUNCTIONAL PERFORMANCE AREA PROJECT MANAGEMENT COST MANAGEMENT SCHEDULE PERFORMANCE SUBCONTRACT MANAGEMENT DESIGN QUALITY TECHNICAL PRODUCT QUALITT TOTAL PERFORMANCE POINTS EARNED PREVIOUS 6 MONTHS WEIGHT 0 0 0 0 0 0 RATING 0 0 0 0 0 0 CURRENT 6 MONTHS RECOMMENDED WEIGHTING WEIGHT RATING GRADE .25 .15 .15 .20~ .15 .i0

75

18.75 ii °40 12. 901 16.40 11.70 7.60

76

86
82 78 76

0

0 AWARD FEE PER POINT

1.00

78.75

AWARD FEE

o - 70
71 - 75 76 - 80

$

-o15,509 x 5.0 29,079 x 3.75 77,545 109.046 $186,591 TOTAL $240,441 TOTAL $1,023,150

BASE FEE $53,850 BASE FEE $53,850 ~

RECOMMENDED AF $186,591 MAXIMUM AF $969,300

ACTUAL AWARD FEE'"VX. MAXIMUM AWARD FEE OF TOTAL ACTUAL FEES VS. TOTAL MAXIMUM FEES

19.25% 23.50%

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Defendant's Supplemental Exhibit 67

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Department of Energy
Albuquerque Operations Office P. O. Box 5400 Albuquerque, New Mexico 87115

SEP ? 1989
Mr. Dominick J. Sanchini President Rocky Flats Plant North American Space Operations Rockwell International Corporation P. O. Box 464 Golden, CO 80402 Dear Mr. Sanchini:

In accordance with Appendix D of Contract DE-ACO4-76DP03533, the Department of Energy (DOE) hereby determines that Rockwell International Corporation (Rockwell) has earned an award fee of $2,716,624 for Plant and $186,591 for PRMP/PROVE, for a total of $2,903,215. The enclosed Performance Evaluation. Report for the period October I, 1988 through March 31, 1989, and a Memorandum from the Acting Assistant Secretary for Defense Programs, provide the basis for the DOE award fee determination.
The award fee approved by the DOE for payment to Rockwell was pursuant to an award fee plan previously developed to cover the period October I, 1988 to March 31, 1989. This was prior to the institution by the DOE of stronger and tougher award fee plans to reward improvements in environment, safety, and health (ES&H) and substantially increase the proportion of the fee attributable to ES&H performance. Under the old contract provisions, however, the DOE was constrained as to the welg~t that might be given to ES&~ performance in setting the fee for the six month period covered= In the old award fee plan, which includes this period, up to 20% of the total amount of fee paid could be attributable to perfo.r~.~gpce in the ES&H area. By reducing the award fee for ES&H to "Unsatisfactory~" the DOE is indicating to Rockwell that your ES&H performance is unacceptable. Under the new plan, effective for performance after October i, 1989, failure in any important area critical to contract performance may result in the payment of no award fee. As specified in the Contract, you may, within five working days after receipt of this letter, request an opportunity to present to the DOE an analysis of your performance under the Contract. Otherwise, you may withdraw funds as a net award fee in the above amount from your Special Bank Account.

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If you ~sh to meet ~th the DOE, please contact the Rocky Flats Office which ~ll coordinate those arrangements for you. Sincerely,

Bruce G. ~ning ~nager

Enclosures cc w/enclosures: David P. Simonson, Area ManaEer, RFO

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PERFORMANCE EVALUATION ROCKWELL INTERNATIONAL CORPORATION CONTRACT NO. DE-AC04-76DP03533 FOR THE PERIOD OCTOBER i, 1988 - MARCH 31, 1989
The overall performance of Rockwell International Corporation (Rockwell) has been maintained at least a~ a level of "Satisfactory" during the period October 1, 1988, through March 31, 1989. The following is an evaluation of the performance of Rockwell~ relative to the management and operation of the Rocky Flats Plant, including the performance for the Plutonium Recovery Modification Project (PRMP)/Plutonium Recovery Option Verification Exercise (PROVE), in the Functional Performance Areas (FPA's) selected for award fee evaluation. The first section covers Plant operations while the second section covers PRMP/PROVE, The General Management FPA ~as evaluated considering performance for both~ areas. The selected FPA's for Plant operations have been evaluated in accordance with the contract Award Fee Plan, and the following discussion of each FPA and resulting award fee earned reflects an integrated assessment of all factors.

GENERAL MANAGEMENT: There vas a rapid resolution to the problem of obtaining United States Department of Transportation (DOT) approval for using a modified A~X railcar for making the first shipment of Transuranic mixed waste in 1989o Interplant schedule compliance continued at 100Z for the third consecutive rating period. The Emergency Preparedness organization has a well-planned and effective program, is involv6d in Albuquerque Operations Office (AL)-~ride coordination activities, and continues to make improvements. In less than four years, Rockwell has exceeded a ten-year Energy Conservation Goalo ~~.~ell" has. not made adequate progress to prepare for utilization of the ~~~:~U~¢T!ii container when It becomes available. The identification and timely resolution of problems by Rockwell is often slow. Rockwell has recently violated DOT regulations on two shipments to the Nevada Test Site. Despite the knowledge tha~ nitrate concentrations on the 750 pad have increased~ action has been taken to contain saltcrete after precipitation events. Rockwell is still not placing sufficient emphasis on the ~imely establishmen~ of the Rocky Flats Institu~e. Inadequate proJec~ staffing for the PRMP con~inues to influence Rockwell's performance. COST MANAGEMENT: Good data and narratives provided by Rockwell to define Department of Energy (DOE) unfunded Environment, Safe~y, and Health requirements in an FY89 supplemental budget request were also used to support DOE requests to Congress for addit~onal FYgo funding. Rockwell has done an extraordinary Job of tracking information and preparing responses to a large variety of budget information requests and of maintaining the current s~atus of its requirements° In addition, construction project data sheets and conceptual design reports supporting Capital Budget requests were both of high

quality and ahead of schedule. Budge~ narratives were ~mproved and expanded
and were

helpful

in DOE's analysis of

Eockwell's

resource requirements°

1

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qUALITY: Non-Weapons Quality Assurance activities conducted during the Building 771 restart have resulted in an improved quality program to be used in the operation of the building. For War Resel-ve Quality Assurance, Rockwell is implementing Phase 2 of the Quality Improvement Plan which will continue a new culture in quality practices and should lead to further improvement in the Quality Assurance program.

Rockwell failed to establish or make the necessary progress towards the establishment of a new standard of excellence and attendant requirements~: procedures, and practices in nuclear facility operations. In addition, three incidents came to DOE's attention where Rockwell failed to provide the necessary measures to adequately control nonconforming product material.

CHEMICAL OPERATIONS: Noteworthy progress has been made towards the implementation of the Operational Readiness Review (ORE) program as demonstrated through ORE's in Building 771 and elsewhereo Rockwell has also successfully completed the development of a new extractant compound for use in the Holton Salt Extraction process. Both of these accompllshments will yield safer and more controlled production processes while maintaining or improving product±on performance. PRODUCTION OPERATIONS: Significant progress has been made in the development of a Nuclear Facility Operations Manual. Rockwell has been supportive of the AL effort to develop an Operatlonal Surety Program. Rockwell has taken several steps to reduce work in process inventories and process rimes by, among other thlnEs, reduced planned process times in Building 460~ reduced pit assembly process time in Building 707, and reduced lot sizes on the 3T bodies.
ENVIEONMENT~ SAFETY~ AND HEALTH: Throughout the appraisal period, there ~as strong evidence of a continuing pattern of lax attltude~ inadequate procedures, and lack of priority for ES&H activities. The operations in Building 771 were ceased in October ~988 due to inadequate safety procedures and radloloEical safety margins in the Building. Although Rockwell pursued a very aggressive corrections effor~ after the fact, the existence of this situation indicated a less than satisfactory attitude, procedures, and awareness for~afety on the part of Rockwell. Ninety-one out of 230 safety concerns documented by external reviews (as well as by an internal Rockwell review) remained open during the period. A~aln~ this indicates that a lack of priority attention wasbelng paid to safety and health by Rockwell. Durln~ the period, 32 new safety concerns~ includinE six classified as Type 2 (serlous), were identified. A major en~'Ironmental incident occurred during the period when chro~ic acid was released from Building 444 and contaminated the Plant's holding ponds. An inoperable alarm system and deficient operator
vigilance contributed significantly to the seriousness of this incident.

2

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FRMP/PROVE
PROJECT MANAGEMENT: Rockwell has given PROVE renewed emphasis by separating responsibility for PROVE from that of the PRMP and placing it under a fulltime project manager., The recently implemented "Precursor Plan" represents an improvement in direction for the entire project and wasImplemented with professionalism and enthusiasm.

Overall PRMP management attention to project technical, cost, schedele, and manpower need was inadequate. In addition, inadequate project staffing continues to influence Eockwell's perfo~anceo COST MANAGEMENT: Cost development and basellnlng of costs for the "Precursor Plan" have been handled with the highest degree of quality. Rock~ell's redirection of J. A. Jones' manpower planning on PROVE resulted in reduced costs and apparent increased construction productivity,. PROVE continues to demonstrate cost growth. PRMPcost planning far exceeded available project funding allocations. SCHEDULE PERFORMANCE: Rockwell has successfully resolved several problems which were impacting schedule in the PROVE area. The dillgent effort by. Rockwell, Bechtel, and Jo Ao Jones in the Joint development of the Precursor planning has resulted in a comprehensive schedule that should provide a smooth transition from PROVE to the receipt of capital fundlnE for PRMPo
The PROVE schedule has deteriorated during the reporting period, extending the PROVE end date from 1/90 to 8/90. SUBCONTRACT MANAGEMENT: Rockwell, consistent with project technical needs and evolved cost and schedules, has provided rapid and effective subcontract redirection of Bechtel. Rockwell subcontract management of J. A. Jones has ensured J. A. Jones' participation in construction planning. Rockwell has been successful in obtaining active participation and commitment from the National Laboratories and other Rockwell organizations on the PRMP Precursor Program.
The subcontract work~Ith the PROVE gloveboxmanufacturer has resulted in the need for significant rework to the glovebox piping and piping penetration welds. Line Item and cost/schedule activities over the balance of the FY89 demand that Rockwell provide continuous site representation at Bechtel.

DESIGN qUALITY: The Precursor Program, geared toward improving PRM~ design quality, has been initiated with broad based involvement. Use of the Configuration Control System for PROVE has been greatly improved.
The quality of the existin8 PROVE engineering has been poor, and change orders to correct poor initlal design quality are reflected in cost ~row~ho

TECHNICAL PRODUCT qUALITY: PROVE activities in addressing and rectifying glovebox welding problems are directed towards, and should significantly improve, technical product quality. Welding problems recently surfacing on the PROVE glovebox indicate a siEniflcant lack of technical product quality success.
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Defendant's Supplemental Exhibit 68

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United States Government

D~partment of Energy

mere
DATE ~,TTN OF:

d

m

Albuquerque Operations Office

Novel~.r 8, 1989 0CC (Jm~ Ao Stout/Fi3 844-726.5) ~p~vsl of Draft ~esponse to Roc.km~11 Intere~tional's October 25, 1989 Let~r J. L. W~ntmrdt, Acting Pri~e2Lpal Deputy L~t~taat See_rarefy for Defeame Programs, DP-2, ]K~

SUBJECT:

ISSUE/ACTION STATEMENT ~ockwell International Corporatlon, the Mauagement a,M Operating c~n~actor for the Department of Energy (DOE) ~ocky Flats Plant has requeste~ in the!r letter date~ October 25, 1989, that DOE re~nslder the award fee determiuatlon for the perlo4 October I, 1988 to Mar~h 31, 1989.
LL~ evaluated both ~ockwell's ~ritt~- ~l verbal Just~Eic~t~0n for

In~.aslng t!m amomat of award f~e and requests Headquarter's approval to sam~ the attached draft letter whlch sets forth DOE's ~Inal award fee determi~a~[ono
TIMING

In a~corda~ee with the ter~s of the Dog/Eockwell contract, a final award fee determlm~tlon must be provided to ~ockwell by November 1989. DISCUSSION The Mamager,. AL, provided Eockwell with DOE's award fee deteralmatlon im a letter dated September 27, 1989. ~ock~ll, u~ reeelvin~ the award fee ~etermlnatlau requested, in a~~ ~ ~e te~ of ~ mtract, t~t they ~ provid~ ~ o~t~ to pro~de ~ ~ly~ of ~r ~omce. ~ell pro~d~ ~r ~tt~ ~alysls ~ a lett~ dat~ Octo~r 25, 1989~ fr~ ~ck ~. S~i, ~Id~t, to Da~d P. Si~on, ~ger, ~. A~rbal pr~ta~ ~s ~de ~ ~ell ~ ~to~r 30, 1989, ~z ~ger for ~g~t ~ ~~tratlon.
The amount of award fee determlmezl by DOE for the perlod October I, 1988 to March 31, 1989, is a significantly lesser amount than Rock~ell ha~ earned for previous performax~e imriods. They feel that the

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award fee d~es u~t properly reflect their level of pex-formamee during the per~d for the followlug, reasons: ~OE l~r~mnel that were not fully knowledgeable of Rockeell"s performance lnflu~ced DOE's performance evalu~onso Ne~ ev~l~tio= =r~te_r~a ~ased upon "external pressure, Jur~sdic~_tonal d~sputes, sensational allegations fro~ g~vernn~nt investigation, and the. =u~rent.political utilized.

CONCERNS/SENSITIVITIES

R~ckwell has informed AL that t~xe is a ~i~ probability Rockwell will ta~ legal action agaln~t ME if the issue of award fee. is not resol~e~ to their sat_Isfantlon.
The DOE/Rockwell contract specifies tlmtDOE shall provide a final award fee determination within ten ~orktn~ days of Rockwell's verbal performam~e analysis presentation to DOE. t~ck~ellmade their presamtati~ on October 30, 1989, therefore, DOE's res~-ee s~Id ~e provided by November 14, 1989.
R ECOMMENDATI ON / APPROVAL

AL ree~memds that Headquarters approve t~e attached DOE final determlmati~ ~ the Rockwell award fee.

Br~=e Go ~
Manager

AP PROVED: Wo Hemson Mo~re, Deputy Secretary

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~:lm. ,.1". ~o Iksrr, USI~ l)P-20,

~'~- J. G. Boyal, CI'D, AL