ML20149F437
| ML20149F437 | |
| Person / Time | |
|---|---|
| Issue date: | 07/15/1997 |
| From: | Mace M NRC OFFICE OF ADMINISTRATION (ADM) |
| To: | Alers P, Baully P ICF, INC. |
| References | |
| CON-FIN-J-5194, CON-NRC-02-95-002, CON-NRC-2-95-2 NUDOCS 9707220193 | |
| Download: ML20149F437 (5) | |
Text
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.U QS MGo p
~t UNITED STATES y
j NUCLEAR REGULATORY COMMISSION
' 1" WASHINGTON, D.C. 20555-0001
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M 10 N ICF Incorporated ATTN: Mr. Perry Alers Project Administrator 9300 Lee Highway Fairfax, Virginia 22031-1207
Dear Mr. Alers:
Subject:
Task Order No. 8. Entitled " Perform Financial Strength i
and Credit-Worthiness Evaluations of Potential Successors l
to U.S. Enrichment Corporation." under Contract NRC-02 95-002 This confirms verbal authorization provided to you on May 23, 1997, to commence work on May 23. 1997 under the subject task order with a temporary ceiling of
$10.000.00.
In accordance with the task order procedures of the subject contract, this letter definitizes Task Order No. 8. This effort shall be performed in accordance with the enclosed Statement of Work and the Contractor's technical proposal dated May 23, 1997.
Task Order No. 8 shall be in effect from May 23, 1997 through January 2.1998 with a cost ceiling of $123.505.
The amount of $113.122 represents the total estimated reimbursable costs and the amount of $10.383 represents the fixed fee -
for the basic task order, i.e., the effort contained within tasks A and B.
If the option for task C is exercised, the cost ceiling for that option will be
$88.167, of which $80.754 represents the total estimated reimbursable costs and 57.413 represents the fixed fee.
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j The obligated amount shall, at no time, exceed the task order ceiling.
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When and if the amount (s) paid and Jayable to the Contractor hereunder shall equal the oMigated amount. t1e Contractor shall not be obligated to i
continue performance of the work unless and until the Contracting Officer l
i shall increase the amount obligated with respect to this task order. Any work undertaken by the Contractor in excea of the obligated amount specified above is done so at the Contractor's sole risk.
Accounting Data for Task Order No. 8 is as follows:
B&R No.
75015212005 I
JOB No.
J5194 T
BOC:
252A I(
APPN No.:
31X0200 i
Obligated Amount:
$123.505.00 i
The following individuals are considered to be essential to the successful performaner of the work hereunder:
Paul Bailey. John Collier Craig Dean, Richard N-
- q. Michael Berg and Matthew Borick.
9707220193 970715 lll ll.llllylIg PDR CONTR NRC-02-95-OO2 PDR I
, Contract No. NRC-02-95-002 Task Order No. 8 The Contractor agrees that such personnel shall not be removed from the effort under the task order without compliance with Contract Clause H.1 Key Personnel.
Your contacts during the course of this task order are:
j Technical Matters:
Daniel Huang Project Officer (301) 415-7805 Contractual Matters:
Amy Siller Contract Specialist (301) 415-6747 The issuance of Task Order No. 8 does not change any terms and conditions of the subject contract.
Please indicate your acceptance of Task Order No. 8 by having an official authorized to bind your organization, execute three (3) copies of this document in the space provided and return two (2) copies to the U.S. Nuclear Regulatory Commission. ATTN: Ms. Amy Siller, ADM/DCPM/CMBl. Mail Stop T-7-I-2, Washington.
D.C.
20555.
You should retain the third copy for your records.
If you have any questions regarding this matter, please contact Ms. Siller on (301) 415-6747.
Sincerely, s
1.[h i YL A3 I
h)d NAMary H. Mace, Contracting Officer Contract Management Branch 1 Division of Contracts & Property Mgmt.
Office of Administration
Enclosure:
As stated
. il 11 6A Vict pc4eio w THLE Jm 16. 4447 DATE
TECHNICAL ASSISTANCE IN COST ESTIMATING AND FINANCIAL ASSURANCE CASE REVIEWS TASK N0. 8 PERFORM FINANCIAL STRENGTH AND CREDIT-WORTHINESS EVALUATIONS OF POTENTIAL SUCCESSORS TO UNITED STATES ENRICHMENT CORPORATION I.
Background
The United States Enrichment Corporation (USEC), a government-owned corporation which leases and operates the two gaseous diffusion uranium enrichment plants (GDPs) located at Paducah, Kentucky, and Piketon, Ohio, is to be privatized pursuant to the USEC Privatization Act and other legislation.
The Nuclear Regulatory Commission must consent in writing to the transfer and issue revised certificates of compliance to the new owner following procedures specified in Part 76 of NRC's regul ations,. The USEC Priyatization Act, signed into law by President Clinton on April 26, 1996, specifies that the Commission may not issue certificates of compliance if it determines that " issuance would be inimical to the maintenance of a relidle and economic source of domestic enrichment services."
The NRC staff intends to make the required determination on the basis of an evaluation of the financial strength and/or credit-worthiness of the USEC successor organization, as reflected in information submitted to support certificate issuance. The staff intends to find acceptable any successor organization that warrants an investment grade bond rating, and perform detailed financial strength and credit-worthiness analysis -
for bidders not warranting investment grade bond ratings applying -
accepted investment banking techniques.
It is anticipated that the NRC will undertake review of potential successors.when the final bidders list is issued, in order that the NRC be ready to act quickly when a final bidder is selected.
In the event that the privatization is accomplishec " means of an initial public offering (IPO) of stock, the NRC would evaluate the financial strength and credit worthiness of the privatized USEC organization.
Privatization will be accomplished according to a Privatization Plan (PP) which will be approved by the Administration.
The PP proposed for approval calls for pursuit of privatization through both a merger /and acquisition (M&A) approach and an IPO approach until one approach is decided upon for final action.
2.0 Objective The objectives of this task are: 1) to develop an adequate technical basis for the staff to declare whether issuance of certificates to a successor organization to USEC would be inimical to maintenance of a reliable and economical source of domestic enrichment services, as 1
1 called for by the USEC Privatization Act, and 2) to provide technical assistance to the NRC in the review of financial documents of potential
' successor organizations to USEC.
3.0~
Technical ~ and Other Special Qualifications Required The principal investigators represent the technical expertise pro'vided by the contractor and provide technical continuity during the reviews.
They shall have professional credentials in the technical areas assigned to them that qualify them as expert witnesses for testifying at public hearings.
4.0 Level of Effort The level of effort for this task is estimated to be a minimum of 4 staff months and a maximum of.12 staff months. The higher level of effort could be involved if _ additional bidders require evaluation, or if the staff's proposed decision is contested and must be litigated.
5.0 Period of Performance The period of performance for the work specified in this task shall begin the date of execution of the task order and shall continue through January 2, 1998.
6.0 Scope of Work The work effort for this task will include the following subtasks:
Subtask A: The contractor will assist in developing review procedures and criteria for evaluation of financial strength and credit-worthiness, for the purpose of making the determination required by the USEC Privatization Act.
Subtask B: The contractor will confirm and/or evaluate the financial strength and credit-worthiness, including commercial bond ratings, of potential successor organizations to USEC. The staff anticipates that actual evaluations will need to be performed.in a very short period of time (two weeks or 4
less), and that from 1 to 3 entities will require evaluation. These evaluations should encompass assessments of business risk, competitive position, financial risk and financial flexibility, primarily through application of standard techniques for assessment of credit-worthiness as applied in determination of bond ratings by investcent banking organizations.
The evaluations performed by the contractor should make use of information and data produced as a result of the financial analysis that will be performed by J.P. Morgan, on behalf of the U.S. Treasury and USEC, in connection with similar findings that are required to be made by those 2
U i
parties in connection with privatization approval, and submitted to NRC in support of certificate issuance.
In both subtasks, the contractor shall also review applicant responses and make recommendations for resolution of differing positions.
If necessary, the contractor shall provide hearing support and serve as an consultant in follow-on litigation related to the contractor's financial evaluations.
7.0.
Schedule of Deliverables j
The contractor shall review and comment on the staff's pronnsed procedures and criteria within fitteen calendar days of receipt of the staff's draft procedures from the technical monitor. The contractor shall complete the reviews of individual financial strength and credit-worthiness submittals in fifteen calendar days from receipt of the submittals from the technical monitor..
8.0 Reporting Requirements The contractor will prepare a letter report for each submittal. reviewed under the two subtasks.
9.0 Meetings and Travel It is expected that there would be as many as twelve meetings between the contractor and NRC staff. This should be readily accommodated because of the proximity of the contractor's office and NRC offices in Rockville, Maryland.
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10.0 NRC Furnished Materials The NRC will furnish the contractor copies of the financial strength and credit-worthiness evaluation procedurer developed by the staff for contractor review and comment under Subtask A, and copies of all financial strength and credit-worthiness information suomitted in support of potential USEC successors for review under Subtask 6.
11.0 Technical Direction Thomas E. Wenck is designated as the technical monitor for this task.
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