M

1
The Bechtel Jacobs Company LLC Briefing
for BJC Subcontractors Senior Managers Joe
Nemec, President Bechtel Jacobs Company
LLC January 17, 2002
MI Status Report and ISMS Reverification
2
Agenda

• Where weve been
• Where we are today
• Enhanced communications between Bechtel Jacobs
  Company and subcontractors
• ISMS Reverification

3
Where Weve Been
4
1/15/98
5
What We Heard from DOE-ORO

• Make safety primary
• Bring proven leadership
• Manage, integrate, and expedite cleanup
• Maximize competitive subcontracting
• Ensure a workforce-friendly transition that
  retains community resources
• Provide experience aligned with SOW
• Work as a seamless integrator

6
Implementation Strategy

• Ensure safety
• Divide scope into manageable projects
• Subcontract all execution
• Minimize the MI organization
• Ensure a seamless approach
• Maintain flexibility
• Establish clear lines of authority and
  responsibility

7
Subcontractors are Integral to our Organization
Approach
General ManagerDeputy General Manager
Independent Assessment ESH Reindustrialization
Public Affairs Human Resources Labor Relations
Procurement Business Management Engineering and
Technical Services Field Services Strategy and
Regulatory Analysis
ETTP Project Manager
Legacy Waste Project Manager
UEFPC Project Manager
Waste Operations Project Manager
Bethel Valley Project Manager
Portsmouth Project Manager
Melton Valley Project Manager
Paducah Project Manager
Bear Creek Valley Project Manager
EF ProjectManager
Subcontractors
8
Plan for Transition of LMES Employees
New jobs created
Purchased LM services
Subcontractoremployees(new existing)
Number of Employees
MI core organization
Bechtel Jacobs career professionals
Bechtel Jacobs career professionals
1/1/98
4/1/98
4/1/00
Phase-in
Transition
End ofTransition
9
Award of New Subcontracts
100
Self- and LM- performed projects and activities
93 subcontracted
Percent Subcontracted
30
7
MI core functions
0
4/1/98
4/1/00
Strategically subcontract all but core functions
10
Aggressive SB Subcontracting Program

• Infrastructure
• SM
• NEPA
• Environmental monitoring
• Building demolition
• Wastewater treatment

BJC goals
Small business goal 50
WOSB 10
Rationale Meaningful scopes that ensure success
and growth
SDB 15
HBCU 2
11
Where We Are Today
12
Results

• Safety record has improved -- it is the 1 focus
• Work is managed through a proven
• project management approach, using
• a baseline and a baseline change
• control system
• Lifecycle cost estimate has decreased
• by 1.1B cost avoidance to date
• of 450 M
• 86 of the work is performed by subcontractors or
  other primes
• 900 employees transitioned
• 203 subcontracts have been
• awarded for 1.1 B

13
Awarded Subcontracts Over 100K Through December
31, 2001
Total 203
Active Subcontracts With Workforce Transition 32
CompletedSubcontracts107
Active Subcontracts Without Workforce Transition
64

• All fixed / fixed unit price or combination
  thereof

• Performance-based, competitively bid

14
Awarded Subcontracts Over 100K Through December
31, 2001
Total Est. Value 1.1 B
Total Value WithoutWFT378.12 M (170
Subcontracts)
Total ValueWith WFT733.1 M(33 Subcontracts)

• Excludes work authorizations with BWXT Y-12,
  UT-Battelle, and USEC (451M)

• All subcontracts are fixed price, fixed unit
  price or combinations thereof

• Majority of WFT subcontracts are 3-year base
  period with two 1-year options

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Oak Ridge Reservation Legacy MLLW, LLW, and TRU
Inventory Status
20
Contaminated Groundwater Treated
21
FY 2001 Accomplishments
Mitigated several hazards associated with the
Molten Salt Reactor Experiment and installed fuel
salt removal equipment
ORNL
Demolished five cooling towers and one heat
exchanger, 5 years ahead of schedule
Removed sludge from Gunite tanks, grouted all
tanks, and removed risers -- project now complete
and 1 year ahead of schedule
Y-12
ETTP
Phase I construction on schedule for EMWMF CERCLA
disposal cell
Demolished K-1001
Remediation of 20-acre Boneyard / Burnyard
progressing
Completed disposal of Oil Landfarm Soils and
Containment Pad
On schedule in demolishing Main Plant Area
facilities
Completed K-1070 C/D G-Pit Removal Action
22
FY 2001 Accomplishments
Paducah
Cleaned up Drum Mountain and shipped offsite
Began Bldg. C-410 infrastructure DD preparation
Cleanup on DOE Material Storage Areas has begun
and is on schedule
Scrap metal disposal has been accelerated
Portsmouth
Completed X-231A and X-231B biodegradation plots
Winterization project on schedule and will be
operational Nov. 1, 2001
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FY 2002 Plans

• Initiate operations of EMWMF
• Ship 1M kg of Site Treatment Plan waste for
  treatment
• Complete 70 of the soil removal activities at
  the Y-12 Boneyard / Burnyard
• Ship the first of five casks of spent nuclear
  fuel to Idaho
• Complete remediation of SWSA 4 intermediate
  holding pond
• Complete 70 of sludge removal activities on SIOU
• Complete DD on the remaining four buildings as
  part of ETTP Main Plant
• Complete 25 of the asbestos removal on Bldg.
  K-25
• Initiate DD of C-410 building at Paducah
• Initiate remediation on Paducah Scrap Metal and
  N/S Diversion Ditch
• Complete a series of remedial actions in Quad 1
  at Portsmouth

24
Enhanced Communication Between Bechtel Jacobs
Company and Our Subcontractors

• Todays meeting, and more like it
• Written updates
• Briefings on key issues
• DOE drivers / expectations of Bechtel Jacobs
  Company and how they affect subcontractors
• Fixed-price subcontracting Lessons Learned

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The Bottom Line is ZERO
26
The Bottom Line is STILL ZERO
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Committed to Zero Accidents
Combined Rates for Bechtel Jacobs Company LLC and
Subcontractors (cumulative through December 2001)
RII
LWCA
LWC
1998 1999 2000 2001 1998 1999 2000
2001 1998 1999 2000 2001
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Committed to Zero Accidents
N/A
N/A
1998 1999 2000 2001 1998 1999
2000 2001 1998 1999 2000 2001
1998 1999 2000 2001 1998 1999 2000
2001 1998 1999 2000 2001
(thru Dec)
(thru Dec) ( thru
Dec)
(thru Dec) (thru
Dec) (thru Dec)
Includes restricted days days away
N/A
1998 1999 2000 2001 1998
1999 2000 2001 1998 1999
2000 2 001
(thru Dec)
(thru Dec)
(thru Dec)
29
Total BJC and Subcontractor RIIs and LWCsCY 2001
9
2
8
Total Injuries To Date 64 People
5
7
1
7

6
3
6
4
1
6
5
5
2
4
4
3
3
3
3
1
2
2
2
1
2
1
1
0
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
MONTH
30
CY 2000 Bechtel Jacobs Co. and Subcontractor
Injuries / Illnesses by Nature
31
Radiological Exposures -- CY 2001 ( DOE Standard
5000 mrem -- Maximum Individual Dose 554 mrem)
Y-12
Other
ETTP
Portsmouth
Paducah
ORNL
32
Committed to Excellence in Environmental
Performance

• 1998
• No Reportable Occurrences of Releases to the
  Environment
• 2 NPDES Exceedances
• No Notices of Violation
• 1999
• 3 Reportable Occurrences of
• Releases to the Environment
• 6 NPDES Exceedances (1 subcontractor)
• 2 Notices of Violation
• 2000
• 4 Reportable Occurrences of Releases to the
  Environment (2 subcontractor)
• 6 NPDES Exceedances (5 subcontractor)
• 8 Notices of Violation
• 2001
• No Reportable Occurrences of Releases to the
  Environment
• 10 NPDES Exceedances (4 subcontractor)

10
9
8
7
6
Number
5
4
3
2
1
0
0
0
0
1998
1999
2000
2001
Includes formal and informal notices received
by both DOE and Bechtel Jacobs Co.
33
Performance of Subcontracts To Date

• Subcontractor safety statistics
• Trending in wrong direction
• RII Rates 2000 1.99 2001 2.37
• LWA Case Rates 2000 .60 2001 .64
• Overall performance -- Satisfactory to Good
• Formal Performance Scorecard Process rolled out
  to teams in January 2001
• Two subcontracts terminated for convenience,
  involving safety issues

34
MI Contract Timeline
Asst. Mgr. Enrichment Retires
3-1999
Manager DOE-ORO Retires
Phase-In Period
7-1999
8-1999
Transition Period
New DOE/ORO Manager
8-1999 Washington Post Exposé Articles
10-1999
10-1-1999
New Security Contractor
1-2000
8-1999 EH Investi- gation at Paducah
New ORNL Contractor
2-2000
Management Evaluation Fee Added
4-2000
6-2000
New Paducah Site Manager
4-1-2000
ORO Deputy Mgr. Retires
DOE/ORO Management Restructuring
8-2000
ISM Plan Approved
9-1999 Congressional Hearings on Paducah
10-1999 Paducah Site Mgr. Retires
New Y-12 Contractor
Transition Ends
1-2000 EH Investi- gation at Portsmouth
12-1999 Portsmouth Site Mgr. Retires
8-2000 Historical Review of ETTP Water Supply
4-2000 EH Investi- gation at Oak Ridge
New Portsmouth Site Manager
11-2000
1-17-2002
10-2000
New Administration
10-2002 DNFSB Letter
1-20-2001
IG Report on Subcontracting
Portsmouth Cold Standby Plan
EH Team Begins Follow-up Visits
? THE ? ROAD ?
AHEAD ?
11-2002 ISMS Revocation
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DNFSB Letter and ISMS Implementation

• In their letter of October 15, 2001, the DNFSB
• Expressed concern about the application of DOE
  orders governing nuclear facility safety
• Expressed concern regarding management and
  implementation of authorization basis documents
• Questioned whether the declaration of ISMS
  implementation for both DOE-ORO and BJC was
  premature
• On November 1, 2001, Leah Dever issued letters
  revoking ISMS declarations of last fall for BJC
  and DOE-ORO
• DOE will perform a review of ORO authorization
  basis process within next few months
• DOE will perform a re-verification of our ISMS
  this fiscal year

36
ISMS ImplementationA Journey of Continuous
Improvement

• BJC and subcontractors have made great strides in
  implementing ISMS
• Our safety metrics are the best in Oak Ridge and
  significantly better than the DOE average
• Neither DOE nor DNFSB have identified any
  imminent hazards to workers, the public, or the
  environment
• It is my assessment that our ISMS process is
  adequate and effective for ongoing management of
  our work . but
• . ISMS implementation is never finished
• We will continue to focus on improving some
  specific areas, especially authorization basis
  documents in our facilities
• We must not lose focus on all aspects of ISMS as
  we strive for our goal of Zero Accidents

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ISMS ReverificationPath Forward
Fact-Finding and Assessment

• DNFSB
• Letter

Recovery Plan
ISMS Reverification
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The Bechtel Jacobs Company LLC Briefing
for BJC Subcontractors Senior Managers Paul
Clay, Vice-President Bechtel Jacobs Company
LLC January 17, 2002
Paducah Site, Paducah, KY
ISMS Reverification Process
Portsmouth Site, Portsmouth, OH
East Tennessee Technology Park, Oak Ridge, TN
Oak Ridge National Laboratory, Oak Ridge, TN
Y-12 Plant, Oak Ridge, TN
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BJC ISMS Corrective Actions
The BJC ISMS Corrective Actions address the four
primary issues identified in the October 15, 2001
letter from the DNFSB to Robert Card and
preliminary results from the DOE-HQ independent
assessment (Chung review). These four issues are

• Adequacy and implementation of the Authorization
  Basis,
• Completeness of Work Smart Standards in the BJC
  Contract,
• Technical Competence of the BJC staff, and
• Effectiveness of ISMS.

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Integrated Safety Management is a Requirement

• Required by DOE P 450.4 Safety Management System
  Policy
• Required by 48 CFR (DEAR) 970.5204-2 Integration
  of Environment, Safety and Health Into Work
  Planning and Execution
• Included in the DOE prime contract with Bechtel
  Jacobs Company
• Included in Bechtel Jacobs Company subcontracts

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Secretarial Policy Statement Environment, Safety
and Health

• We expect outstanding environment, safety, and
  health performance as a matter of course in the
  Department of Energy. At stake are nothing less
  than the lives and livelihood of our workers and
  neighbors and a healthy environment to leave our
  children. We must expect and demand from
  ourselves as both federal employees and
  contractors only the best in terms of
  environment, safety, and health performance.
• It is our firm belief that this will be achieved
  by implementing the principles of Integrated
  Safety Management. All managers and workers must
  accept as their responsibility a concerted and
  sustained effort to achieve Integrated Safety
  Management at the Department of Energy.

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Bechtel Jacobs Company Safety Culture

• The foundation upon which our safety culture is
  built is our commitment to DO WORK SAFELY. This
  is an absolute belief our core value that the
  safety and health of every worker and the public
  at large, and our environment, are the most
  important assets we are entrusted to protect.
  This belief is consistent with the mission of the
  Management and Integration (MI) Contract to
  clean up the site environment. A strong safety
  culture is a prerequisite and key to the
  effective integration of safety into all phases
  of work planning and execution. Our core value
  of safety is fundamental to every work activity
  throughout the project and is the basis for the
  continued growth of our safety culture.

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Core Functions of Integrated Safety Management
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Guiding Principles of Integrated Safety Management

• Line management responsibility for safety
• Clear roles and responsibilities
• Competence commensurate with responsibilities
• Balanced priorities
• Identification of safety standards and
  requirements
• Hazard controls tailored to work being performed
• Operations authorization

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Worker Involvement

• DOE-ORO has embraced
• Worker Involvement
• as the 8th principle of
• Integrated Safety Management.

47
ISM Mechanisms

• Bechtel Jacobs Company approach for integrating
  ESH into work planning and execution is defined
  in the Bechtel Jacobs Company Integrated Safety
  Management System Description.
• Additional detail on ISM implementing mechanisms
  is provided in the ISMS Supplement.

48
The ISMS Description and Supplement documents can
be found on the web at
For Further Information...
http//www.bechteljacobs.com/pdf-docs/bjcgm1400.pd
fhttp//www.bechteljacobs.com/pdf-docs/bjcgm1401
.pdf
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Partnering

• To achieve effective implementation of Integrated
  Safety Management, the guiding principles and
  core functions must be implemented at each level
  within the DOE, contractor and subcontractor
  organizations.

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Subcontract Compliance

• Subcontractors are expected to comply with
  Subcontract Requirements
• Bechtel Jacobs Company will meet our commitments
• Exhibit G includes ISMS Work Smart Standards
• Prequalification Process
• Adoption of Bechtel Jacobs Company Zero Accident
  Policy
• Lower Tiers
• Prime Subcontractor is Responsible
• Mentoring is expected

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Subcontract Compliance

• Bechtel Jacobs Companys expectations
• Perform all work safely
• Comply with terms and conditions
• Communicate
• Non-Compliance remedies
• Notification (verbal and/or written)
• Hold retention
• Stop payment
• Stop work
• Default
• Termination

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Partnership for Success

• Subcontract Management
• Relationship
• Subcontract Technical Representative (STR)
• Safety Advocate
• Subcontractor
• Procurement Representative
• Communicate, Communicate, Communicate

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ISMS Reverification Process Overview

• Process presented in 9 phases
• Phases 1-6 are BJC/Subcontractor Self-Assessment
  Phases
• Responsible Senior BJC Managers in each phase
  must accept responsibility for advancement to
  next phase.
• Overall approach is to ensure line managers take
  responsibility for implementation

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ISMS Reverification Process Overview

• Phases 7 8 include external readiness
  assessment prior to DOE ISM re-verification
• External Review Team
• Remediation
• Declare Readiness for External DOE ISM
  Verification
• Phase 9 is the DOE Re-Verification
• Subcontractors will be involved in Phases 7
  through 9

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ISM Lines of Inquiry

• A tool to evaluate implementation of ISM
• Subcontractors should be using the LOIs to
  determine their level of readiness
• Evaluate at the Program and Activity level

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Tips for Preparing for the DOE Reverification

• Communicate ISM expectations to all employees,
  including the 5 core functions and 7 guiding
  principles
• Communicate expectation for worker involvement to
  all employees. Workers should have the
  opportunity to be involved in work planning as
  early in the process as possible
• Communicate roles and responsibilities to all
  employees

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Tips for Preparing for the DOE Re-Verification

• Ensure worker involvement in the work planning
  and hazard analysis processes
• Ensure that emergency plans are in place and have
  been communicated to all employees
• Ensure all employees have appropriate training
  and that training records are easily accessible

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Tips for Preparing for the DOE Reverification

• Ensure that a lessons learned process is being
  used effectively and that lessons learned are
  incorporated into the work planning and hazard
  analysis processes
• Ensure that an effective self assessment program
  is being implemented
• Ensure processes for ISM implementation are
  documented
• Ensure work activities are conducted in
  accordance with applicable authorization basis
  requirements

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