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Lockheed Sues Dept. of Energy

June 2, 1998

BETHESDA, Md. (AP) _ Lockheed Martin Corp. filed a lawsuit in federal court Monday against the Department of Energy, which terminated a $200 million contract with the company to clean up a radioactive waste site in Idaho.

Lockheed filed the lawsuit the same day the Energy Department ended its contract with the Bethesda-based company. Lockheed contends the cleanup will cost more than triple the $179 million estimate in the 1994 contract, and the company has petitioned the department for more money.

The department and Lockheed have been battling for months over who should pay for huge cost overruns on the contract, which involves decontaminating a one-acre patch of toxic soil at the DOE’s Idaho Falls national laboratory site called ``Pit 9.″

The Lockheed lawsuit claims ``that DOE’s interference hampered and prevented (Lockheed’s) performance,″ the company said in a statement. The complaint seeks to convert the termination for default action to termination for convenience. Lockheed officials don’t expect to have the matter brought before a judge until the end of the year, according to a source close to the company.

Lockheed said it ``will vigorously contest this termination but will continue to explore alternate means for resolving its dispute with DOE.″

Lockheed has estimated total cleanup costs for Pit 9 will run as high as $600 million. According to a government audit report issued Friday, Lockheed may also be required to refund $57 million the government already paid if it fails to complete the cleanup.

The audit report was done after Lockheed requested $158 million in payments above its original, fixed-price contract. The report faulted Lockheed for providing incomplete data, and questioned the proposed additional costs ``in their entirety.″

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