Charlotte, N.C.-based Babcock & Wilcox (NYSE:BWXT) announced today that the National Nuclear Security Administration rejected it as the management and operating contractor for the combined Y-12 National Security Complex and Pantex plant contract.
B&W has been the lead manager at the two nuclear weapons plants in Tennessee and Texas, but the NNSA published new contract solicitations in December 2011, and this past January, awarded a five-year extendable contract valued at almost $23 billion to Consolidated Nuclear Security, a consortium of companies that includes Bechtel National, Lockheed Martin (NYSE:LMT), Alliant Techsystems subsidiary ATK Launch Systems, and SOC.
B&W appealed the award, and the General Accounting Office upheld part of the protest relating to the program's cost savings, though it rejected the other parts of the complaint. The NNSA then requested more information from the three bidders, which B&W submitted, but it also filed a new protest with the GAO "over the fairness of the procurement and selection process and the form and scope of the revised request for proposals."
In September the GAO dismissed B&W's claims as being premature, so the contractor has been waiting for the NNSA's decision, which the company said today it had just received, and for which it was rejected. Now the contractor must determine how it will proceed next.
Babcock & Wilcox Technical Services Group President George Dudich said: "We will carefully evaluate information received during NNSA's debriefing process in determining our next steps. In the interest of ensuring a transparent process, our team agreed to an open, two-part debrief and we hope that will be possible."
However, there's a wrinkle in the process, because B&W has also filed a lawsuit against one of its former employees, who subsequently quit B&W during the drafting of its bid and went to work at Lockheed Martin. They charge he took with him key information the company could have used to defeat its bid proposal.
CNS denies it requested or received any such information, and notes it's not a party to the lawsuit.
Shares of Babcock & Wilson closed down 1.1%, or $0.36, to $31.85.