Free Supplemental Brief - District Court of Federal Claims - federal

Case 1:91-cv-01362-CFL

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Defendant's Supplemental Exhibit 58

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UnI1~l States Oov~mat~nt

memorandum

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T~L No,

prsctle~ n~ lullit ticlUt,y llama,

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XEROX TE]..ECO;:) I 1:91-cv-01362-CFL Case ER ~95

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Defendant's Supplemental Exhibit 59

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united States Government

Department of Energy Albuquerque Operations Office
PREDECISIONAL

REPLY TO ATTN OF:

C~~

SUBJECT: Award Fee Determination for Period October I, 1988, through March 31, 1989, Rockwell International, Inc. Bruce G. Twining, Manager, OOM In February 1988, Department of Energy (DOE) Headquarters (~Q) performed a Technical Safety Appraisal (TSA) at Rocky Flats which disclosed a number of significant safety concerns. This was the third TSA performed at Rocky Flats. Many of the concerns were repeated from the previous two TSA's. As a result of these disclosures., COE HQ, Albuquerque Operations Office (AL), ard Rockwell all agreed to the actions required to correct the areas of concern. All of the parties recognized that due to the magnitude and complexity of the problems, considerable resources, as well as a substantial period of time, would be required to make the hecessary upgrades and cultural changes. All of the parties agreed that this could be done while the plant operated without jeopardizing the plant employees or the public. Although Rockwell initiated a num~e/ of corrective actions and did, in fact, make reasonable progress in correcting the concerns, AL and DOE HQ decided, in early October 1988, that sufficient progress had not been made in radiation protection in Building 771 and that building was shut down. Rockwell prepared a ccmprehensive corrective action plan coupled with an aggressive restart plan and began, a phased restart in January 1989, under close scrutiny of DOE HQ and AL. A follow-up TSA was conducted in November-December 1988, which focused on the safety performance at all facilities at Rocky Flats, in contrast to prior TSA's which addressed individual buildings. The TSA recognized that the Rocky Flats safety program was in transition ard was open to c~e, which was a marked improvement to the earlier environment° The TSA also recognized that t_he management initiatives by Rockwell represent a noteworthy first step in what must be a continuing effort that assures safety as a high priority and noted that the major changes initiated can take several years to be effectively embraced. The TSA further noted that substantial corrective actions were underway and that continued progress and heightened safety awareness by Rockwell provide a measure of confidence that the safety upgrades can be effectively implemented. The Performance Evaluation Review Board (PERB) evaluated Rockwell's performance for the period October i, 1988, through March 31, 1989, in light of AL's own oversite activities and all the above information using DOE guidelines and standards known at the time the evaluation was performed. Subsequently, much more stringent expectations of contractor performance have been mandated by the Secretary and other DOE policymakers' statements and issuances. PREDECISIONAL
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PREDECISIONAL

In light of these new expectations, if the PERB was to reassess Rockwell's performance for the period October i, 1988, through March 31, 1989, it w~/id, in all likelibzx~, reco, merda lower overall rating. Therefore, the PERB would not object to Ed Goldberg's proposed ~verall numerical rating of "87oN
Finally, since Mr. Goldberg has been on site for the past several weeks and would, therefore, have a greater insight into current conditions within the plant, we d~ not believe you are in a position to offer an informed alternative to his proposal.

....les E. Troell rman, Performance Evaluation .~iew Board

PREDECISIONAL

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Defendant's Supplemental Exhibit 60

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UNCLASSIFIED
2. MESSAGE CONTAINS WE.~PON DATA?

YES U.S. DEPARTMENT OF ENERGY 3. USE WHEN REQUIRED TH~ DOCUMENT CONSISTS OF

~ NO

TELECOMMUNICATION MESSAGE
(,,~e mve.,le ~ for 4. PRECEDENCE DESIGNATION ¢'°X'" NORMAL USE EMERGENCY USE ONLY

~GES

NO ~ OF ~ COPIES. SERIES FOR COMMUNICATION CENTER USE MESSAGE IDENTIFICATION

NR

DTG: ,TIMEi

Z A,M. p )4.

6. FROM ~eetis V. Hill
U. S. Department of EnerEy Albuquerque Operations Office Contracts and Procurement Division
9. TO

{..~Fnlt~'~ ot ~urnOr~Z,~9 0mC~l~
8. DATE

819189
COMMUNICATION CENTER ROUTING 69 69

DOE,
John ~. Meinhar4t DP-I/Room 4A-OI4/FORS

586-2177

BE BRIEF - ELIIdIN&TE UNNECESSARY WORDS

10. ORIGINATOR I~,,~. ~,u~;,~

11. DERIVATIVELY CLASSIFIED NSI

12. ORIGINALLY CLASSIFIED NSI

Rill CPD 4-9189

13.

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RTG. ~*YMBOL

AUG B 1989
CPD Award Fee Determination for the Period October I, 1986, through March 31, 1989, Eockwell International Corporation (RI) John L. Meinhardt, ActinE Assistant Secretary for Defense Programs, DP-I, HQ Meference is made to my memorandum to Troy E. Wade dated May 31, 1989, re~ardinZ Award Fee Determinations for the subject period. Mr. Wade responded on June 21, 1989, concurring in the Albuquerque Operations Office (AL) findings for all AL Management and Operating (N&O) award fee contrac~urs %~th the exception of MIo He further stated that "it would be premature at this time to make a final determination until the Department of Energy investigation of environmental, safety, and health charges are resolved." Edward S. Goldberg, Acting Area Manager, Rocky Flats Area Office, has Bade a review.of El's performance for the first half of FY 1989, and has offered his observations for my consideration in making an Award Fee Determination° Mro Goldberg's observations relate to thr~e Fumctlona] Performance Areas, Genera] Manage~-ent, Quality, and Knvlro~ment, Safety, and Bealth, and are set forIh in the attached memorandum dated July 27, 1989. Based upon Ero Goldberg's o~-slte review, he has proposed an overall numerical rating of "87" for RI ~lant Operations, which equates to an award fee of $3,628,622 or 53°19 percent of the available award fee. Mr. Goldber~ concurs with my "recommended swat4 fee of $186,591 for the ~lutonium ~ecovery Modification Project/Plutonium Recovery Option Verification Exercise. As stated in =y draft memorandum to John Co Tuck dated July 10, 1989, althou~i ~ a~ the Award Fee Deter=Inatlon Official for the MI Contract, Mro Go]dberg's presence on site during the past several weeks has undoubtedly ~iven him =onslderable insight into current conditions at the Rocky Flats Plant° Given this. I am not ~n a position to offer am informed a]ternatlve to his proposal, especially in view of our changing philosophy in the app]icatlon of Department of Energy (DOE) performance standards and the level of DOE expectations. Although the proposed change to am overall numerical ratlnS of "87" may seem s~>dest when compared to the previously proposed AL ratln~ of "9]o2~" the result is a downward adjustment in the dollar award of $1,697,859 ~=31o9 percent) due to the steepness of the AL award fee distribution curve which ~ meaotiated w~th MI in order to op~imlze EI's performance= Based upon the above considerations, I propose to approve an sward fee of $3,628,6~2 for MI~ subject to your concurrence. The Performance Evaluation Eeport,-as rev-lsed to reflect Mr° Goldberg's observations, is attached for your review. The report ~ill be sen~ to M! when the final Award Fee Deterninatlon ~s made=
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DATE RTG.

INrT~LS/SIG. DATE

/89
RTG SYMB,~

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Fleaae ~ndicate your concurrence/nonconcurrenca below. I~ you htve quest±ous or £f ~idi~£onal infor~ation ia required, please let me knO~o

~ruce C. Twining ~auager

/--__/ Concur

/=/ Honconcur

John L. ~elnhard~ Ac~iug Assiasaul Secretary for Defense Programs

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Defendant's Supplemental Exhibit 61

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EXECUTIVE SUMMARY SUBJECT : Award Fee Determination, Rockwell International Corporation Technical Monitor/Divlsion : Rocky Flats Office Contractor/Contract No: Rockwell International Corporatlon/DE-AC04-76DP03533 Action Inltiator/Phone ~.~ Ted HI11/4-9189 Action Requested: For Information Description/Nature of Actlon/Background On August 8, 1989, the Manager, AL, transmitted the Rockwell award fee recommendation for the period October I, 1988, through March 31, 1989, to John L. Meinhardt, Acting Assistant Secretary for Defense Programs, for his concurrence. Follow-up with James P. Belrlger, DP-542.1, On August 29, 1989, resulted in the following status report:
I. Ralph Erickson, Acting Director of Weapons Production, DP-23, does not agree wlth the AL recommendaZlon and has recommended about a 20% reduction. 2. A meeting was held between Admiral Barr, DP-20, David B. Leclalre, DP-50, and James P. Belrlger, DP-542.1, on August 25, 1989, to discuss the recommended 20% reduction. No decision resulted from this meeting.

3. A recommendation is being drafted from Admiral Barr to John L. Melnhardt. However, .Admiral Barr is delaying his decision unrll he determines whether or not those "on high" w!ll support his position.
4. In the meantime, the Office of General Counsel has been drawn into the deliberations because there is some indication that Rockwell is planning some legal action against the Department of Energy.

MOCB." 3-89-757 E 002223

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Defendant's Supplemental Exhibit 62

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inited States Government

Department of Energy

-'_eLY TO DP-23
OF:

Award Fee Determination for the Period October I, 1988, through Mar~h 31, J~.:CT: 1989, Rockwell International Corporation (RI)
TO:

Acting Assistant Secretary for Defense Programs, DP-I The Award Fee Determination Official (Manager, Albuquerque Operations Office), based on Performance Evaluation Review Board reports and a special onsite review, evaluation, and recommendation by Edward Goldberg, Acting Area Manager, has determined that a numerical rating of "87" be given to RI in.its performance as operating contractor for the Rocky Flats Plant. The numerical rating of "87" equates to an award fee of $3,815,213 (this includes a recommended award fee of $186,591 for the Plutonium Recovery Modification Project/Plutonium Recovery Option Verification Exercise (PROVE)). The available award fee for the period was $6,822,000. Although the recommended amount represents only 53.19 percent of the available award fee, I recommend that an additional downward adjustment be made that reflects the environmental, safety, and health (ES&H) situation that existed at the Rocky Flats Plant during the appraisal period. I base my position on the following points: Cessation of operations in Building 771 in October 1988 due to inadequate safety procedures and radiological safety margins in the building. Although Rockwell pursued a very aggressive corrections effort after the fact, the mere existence of this situation demonstrated less than satisfactory attitudes, procedures, and awareness for safety 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. Again, this indicates that a lack of priority attention was being paid to safety and health by Rockwell. 3. During the period, 32 new safety concerns, including 6 classified as Type 2 (serious), were identified. An inoperable alarm system was not repaired and eventually was a factor in a major environmental incident on April 13, 19B9, when chromic acid was released from Building 444 and contaminated the plant's holding ponds.

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Overall, I believe there is strong evidence that throughout the appraisal period there was a continuing pattern of lax attitude, inadequate procedures, and lack of priority for ES&H activities. I recommend, therefore, the "moderately good" numerical grade of 79 given to RI for its performance under the ES&H category be downgraded to a numerical grade of 66. Since ES&H carries an evaluation weight of 20 percent, the adjusted weighted score would now be 13.2 (66 X 20). The weighted score awarded by Mr. Goldberg was 15.80. The adjusted overall rating will now be 84.4. This equates to an award fee of $2,757,126. I totally support the award fee of $186,591 for PROVE. I, therefore, recommend awarding RI a fee of $2,943,717.

J, M. Barr Rear Admiral, U.S, Navy Deputy Assistant Secretary for Military Application Defense Programs

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