Carlsbad, Oct 13, 2004 - The federal Energy Department will begin negotiations for a five-year extension of the Waste Isolation Pilot Plant’s management and operations contract, DOE Deputy Secretary Kyle McSlarrow said Tuesday.

McSlarrow made the announcement at the WIPP site to an audience of employees. He was joined by a handful of top DOE officials, Washington Group executives and community leaders.

DOE plans a 45-day negotiation period with contract-holder Washington TRU Solutions on the extension of the $500 million, five-year contract. WTS employs about 600 people.

“When something’s not broken, don’t set about fixing it,” McSlarrow said. “I have no doubt (the negotiations) will end very positively.

“Most of all it’s a tribute to the workers,” he said, adding he could see the pride they took in their work.

The contract is set to end in September 2005 and contains an option for a five-year extension.

But in recent years, the Energy Department has started to emphasize competition, noting it promotes a higher-quality performance. The same thing has occurred in other areas of government, with the encouragement of Congress.

WIPP’s management contract was competitively bid in 2000, after numerous extensions. In various forms, WTS has been the only holder of the contract.

DOE didn’t have any concerns about WTS’ performance, McSlarrow said in later comments.

Instead, “I tend to be pro-competition,” he said. “But when you have a great existing team, (negotiations) made the most sense. It might not have made sense at another facility.

“It’s a good value for the taxpayer,” he added about the decision.

A couple of months ago, Sen. Pete Domenici, R-N.M., contacted McSlarrow about the contract, he said, and a group of community leaders also told him an extension would help WIPP’s workers.

“It’s important to me that they picked up the phone and came to Washington,” he said.

There is the possibility that the extension could include additional authority for Carlsbad in the management of waste around the country, McSlarrow said.

Local leaders have been lobbying for this, especially in light of fines and incidents at other sites and lower-than-desired shipment rates.

“I want us to think a little out of the box,” McSlarrow said, noting Carlsbad’s expertise and talents would be considered. “The contract needs to match today’s world.”

Additional responsibilities would “have money attached to them,” he said. “There is money in the complex to fund the things that need to be done.”

McSlarrow said he was also confident that WIPP would be adequately funded in the next federal budget, although “it’s a tough budgetary environment” for the DOE.

He said it made sense to start looking now at what would happen when WIPP’s mission is completed, whether in training, science or research and development.

“Nothing’s closed in my mind,” he said.

McSlarrow told the crowd that the future was bright, “even past the time of WIPP being open.” He said local expertise and support would be tapped again.

“It’s a great day for Carlsbad,” said Mayor Bob Forrest, in comments after the announcement.

He noted it had come just a few weeks after a Carlsbad Department of Development-sponsored trip to Washington.

Forrest praised the work of WTS employees, adding, “It gives us credibility and makes our job easy. The No. 1 issue is safety.”

“I want you to know how proud we are of your safety record,” Steve Hanks, Washington Group International president and chief executive officer, told employees.
Washington Group is the parent company of WTS.
“There is no customer more important than the DOE, and there is no community that has been more supportive than Carlsbad,” he said.

McSlarrow said DOE was also proud of the site’s safety record, but he told employees they could not become complacent.

“The fact of that success is what breeds the danger,” he said.

It was the first time McSlarrow had visited WIPP.

“My job tends to take me to the problem areas, and you’re not one of them,” he told the crowd.

McSlarrow said he brought a message from President Bush and Energy Secretary Spencer Abraham: “Thank you to all of you for what you are doing.”

“What an impressive facility,” he said. “It really makes you proud to be an American.”

Among the other officials present were DOE General Counsel Lee Otis, Acting Assistant Secretary of the Office of Environmental Management Paul Golan, EM’s Deputy Chief Operating Officer Ines Triay, CDOD and Chamber of Commerce
representatives and state Rep. John Heaton, D-Carlsbad.

In a statement, Sen. Jeff Bingaman, D-N.M., praised the DOE’s announcement, noting it would bring stability and predictability to the Carlsbad workforce.

“The department has recognized TRU Solutions is doing good work,” said Rep. Steve Pearce, R-N.M., in a statement, adding WTS plans to further accelerate the disposal of waste at additional cost savings.

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