Sep 23 - Las Vegas Review - Journal

Contractors for the Yucca Mountain nuclear waste project are bracing for possible layoffs in anticipation of budget cuts that could be as much as 30 percent, government and company sources confirmed Wednesday.

A spokesman for Bechtel SAIC Co., the prime contractor for the project, said the company's 1,400 employees were notified by President and General Manager Ted Feigenbaum that the Department of Energy had sent out "planning guidance" memos that will lead to final decisions in October.

"I'm not sure reductions are avoidable, and the employees know that," Bechtel spokesman Jason Bohne said.

He said contractors were asked to analyze how a 25 percent to 30 percent funding reduction would affect the project and its schedule for submitting a license application for the planned repository for review by the Nuclear Regulatory Commission.

Asked if the impacts would include layoffs, Bohne said, "My guess is it's going to have to."

If that's the case, the project to entomb 77,000 tons of the nation's spent nuclear fuel and highly radioactive waste in the mountain, 100 miles northwest of Las Vegas, would face another setback.

DOE officials already have delayed submitting the license application that was expected last year and that now has no target date.

The repository, once touted to open in 2010, is not expected to be ready until 2012 at the earliest, barring any delays that could result from the license review and from legal actions.

Allen Benson, a spokesman for the department's Office of Repository Development in Las Vegas, said contractors were sent internal guidance documents last week as part of an annual review. This time, Paul Golan, acting director of DOE's Office of Civilian Radioactive Waste Management, "is demanding a high level of analysis to make sure everything is necessary," Benson said.

"There's nothing unusual going on here," he said, noting later that "this is give and take, and also allows DOE flexibility to put dollars where we think we need them."

Benson said the memos "simply instruct the contractors what they should be looking at for the coming year and come back to us with what their plans are."

Bohne said Bechtel was asked to look at where money is allocated for activities that are priorities.

"They basically gave us a priority list that says this stuff has to happen. The letter says they will give us opportunities to request funding. ... The letter doesn't say reduce the work force," Bohne said.

This year, the Yucca Mountain Project operated with a $573 million budget, of which Bechtel received about $325 million. The company's five-year contract for the project expires in March but can be renewed.

Congress has not set a Yucca Mountain budget level for the 2006 fiscal year, which begins Oct. 1. The Bush administration has requested $651 million, but lawmakers are not expected to pass an Energy Department appropriation bill until later this fall.

Benson said it's possible the project could operate under a continuing resolution for the entire year.

Besides Bechtel SAIC, its subcontractors and affiliates at the national laboratories, there are 33 more contractors whose employees total about 600. Most of those contracts are for technical, support and administrative services. They include one to Opportunity Village for custodial services.

DOE employees on the project account for roughly another 100 workers.

"Everybody gets different guidance depending on what their function is," Benson said.

Confirmation of DOE's internal financial planning guidance instructions to contractors comes a week after officials at the U.S. Geological Survey said they were told to expect an 89 percent reduction next year in work it does for the Yucca Mountain Project. At the time, USGS officials speculated the cutbacks would result in layoffs and drive the agency off the project.

The USGS supplies scientists to the Energy Department for research and monitoring tasks and has conducted nuclear waste studies at the site since 1979.

Benson on Wednesday wouldn't respond to questions about any possible link between the proposed USGS budget cuts and e-mails that USGS scientists wrote between 1998 and 2000 expressing frustration with the project and discussing falsifying quality assurance documentation of their work.

He has said, however, that the USGS wasn't being singled out. Instead, all parties on the Yucca Mountain Project team are undergoing the same scrutiny.

Stephens Washington Bureau Chief Steve Tetreault contributed to this report.