Officials try again on Kansas City weapons plant

Wednesday, August 20, 2008

KANSAS CITY, Mo. (AP) -- The federal General Services Administration will make a second attempt at finding a developer for a $500 million nuclear weapons plant in Kansas City after the first round of proposals were deemed too expensive.

Brad Scott, the agency's regional administrator, said the National Nuclear Security Administration has given its permission for a modified proposal that officials hope will avoid a "bid bust" like the one last month.

The new plan would give potential developers more leeway in meeting the $38-per-square-foot limit approved by Congress and reward developers just for submitting a proposal.

"It's a victory for Kansas City that allows us to try one more time," said Scott, whose agency hopes to select a bid by January at the earliest.

That's a risk as proponents had hoped the project's "fast track" status -- a winning bidder was to be selected this week -- would ensure the plant and its 2,100 jobs remained in Kansas City. But that was before last month's decision to throw out all potential bids for not meeting the project's budget.

There have been efforts to consolidate the existing operation at the Bannister Federal Complex with another nuclear weapons plant in New Mexico. In addition, Congress is expected to release a bipartisan panel's report in December assessing the role of nuclear weapons in U.S. military policy.

Officials are looking to replace the 1940s-era Bannister Federal Complex with a 1.4-million-square-foot plant, which would be leased to the GSA and operated by Honeywell Federal Manufacturing & Technologies. The plant makes non-nuclear parts for nuclear weapons.

Besides adding flexibility, the new bid documents also include financial incentives designed to increase the number of bids. Developers who aren't selected can earn up to $125,000 in compensation, while the program is capped at $500,000.

In addition, the new bid shifts some of the work to the National Nuclear Security Administration. For instance, the administration would take over responsibility for installing equipment

In a letter to potential bidders this week, the GSA said the new specifications could add "significant" profits compared to the original plan.

"We changed the package to make it more attractive and expect more competition to bring it under the cap," Scott said. "Rather than a detailed, prescriptive approach, we've told them what's needed, and we'll let them figure it out."

The GSA plans to cut off bids after Sept. 17 and develop a short list of up to five bidders for further review and selection in January.

Meanwhile, officials are also seeking tax incentives for the project, because the replacement plant, which would be privately owned, would for the first time generate $5.2 million a year in property taxes. Kansas City officials are considering the proposal and are scheduled to make a recommendation Sept. 2.

Information from: The Kansas City Star,

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