Subcontractor sues WIPP for $32 million in canceled work

Critical Applications’ ventilation project was tied to a radiation leak in 2014 that often is recalled as the “kitty litter” incident.

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A subcontractor is suing the company that operates the Waste Isolation Pilot Plant in Southern New Mexico, claiming $32 million for what it says was gross mismanagement of a major construction project at the nuclear waste disposal site.

In a federal lawsuit, Texas-based Critical Applications Alliance LLC, which was hired to build a ventilation system at WIPP, says Nuclear Waste Partnership was such a disorganized project manager that it caused repeated delays and cost overruns, resulting in multiple breaches of contract.

The subcontractor also complains WIPP managers abruptly canceled its $135 million contract in August with no explanation and without paying millions owed.

Nuclear Waste Partnership this month hired Kiewit US Contractors Co. as an interim subcontractor for the project.

A Nuclear Waste Partnership spokesman said the company doesn’t comment on pending litigation.

WIPP is an underground disposal site in Carlsbad that takes radioactive waste from a variety of sources, including Los Alamos National Laboratory. Ventilation is vital in the waste storage chambers, which are carved into salt beds.

Critical Applications’ ventilation project was tied to a radiation leak in 2014 that often is recalled as the “kitty litter” incident.

A container of transuranic waste shipped to WIPP from the Los Alamos lab had been packaged with a volatile blend of wheat-based cat litter and nitrate salts, causing it to burst in a storage chamber. The waste site was shut down for three years and underwent a $2 billion cleanup.

WIPP’s ventilation was reduced at the time to help contain the radiation leak, but this also limited operations and the amount of waste that could be stored, the lawsuit said. Critical Applications was hired to add a new ventilation system.

In its lawsuit, the company says from the outset, Nuclear Waste Partnership used faulty designs that caused chronic problems and forced crews to redo large and expensive parts of the project. Critical Applications often was not informed of design changes until a major installation was already completed, the suit says.

“The design delays and haphazard administration of changes and drawing revisions delayed the project, putting it drastically behind schedule,” the suit says.

As of Aug. 31, changes to the underground utilities and the foundation alone had resulted in 300 days of delay, according to the suit.

Among the problems it cites:

  • A flawed design in hollow-roof panels required an extensive redesign that dragged on for almost a year and at times forced work to shut down in other areas.
  • The building’s foundation had to be redesigned, requiring crews to move underground pipes they had already installed.
  • A defective design plagued the building’s control system, which performs functions such as opening and closing the ventilation dampers. Efforts to remedy the design problems went for more than a year.

This year, Nuclear Waste Partnership paid only small portions of the costs listed in the monthly invoices, and in late August it terminated the contract with Critical Applications without giving a reason, the lawsuit says.

The subcontractor estimates the unpaid invoices at $25 million and cost for dismantling the operation at $6 million.

“These failures to pay were material breaches of contract,” the lawsuit says.

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