Lockheed Martin Hanford Corp., the company in charge of the site's radioactive waste tanks, is being sold to Denver-based CH2M Hill and will become its subsidiary.

Lockheed Martin Corp. has sold its Hanford operation to CH2M Hill for an undisclosed amount, the two corporations announced Tuesday.

The sale is expected to be final later this month after the Department of Justice reviews the transaction to ensure no federal antitrust laws are violated.

That review is routine, said Dick French, manager of the Department of Energy's Office of River Protection, which oversees Hanford waste tank work. The Office of River Protection reviewed and approved the two finalists to buy out the Lockheed contract - CH2M Hill and Bechtel - about a month ago.

"For all intents and purposes, it's a done deal,"French said.

Fran DeLozier, Lockheed Martin Hanford Corp.'s president, said: "I don't expect the bulk of the employees will experience much change, and I expect a very smooth transition."

No new name for the sold Lockheed Martin Hanford Corp. has been picked yet.

Hanford has 54 million gallons of radioactive wastes in 177 underground tanks, which are the site's biggest cleanup project. Lockheed Martin Hanford, which has 1,158 employees, is in charge of maintaining the tanks, plus moving and preparing the wastes to be converted into glass by BNFL Inc.

The sale was prompted by major financial difficulties battering Maryland-based Lockheed Martin Corp., one of the nation's largest defense and aerospace contractors. Numerous mistakes and bad luck have cut so deeply into the parent corporation's profits that it decided it cannot sufficiently manage its huge collection of worldwide subsidiaries.

Lockheed Martin Corp. wants to concentrate on its core aerospace, defense and technology service businesses and sell off much of the rest. DeLozier was told Tuesday that CH2M Hill will take over.

In recent weeks, CH2M Hill studied Lockheed Martin Hanford and the tank farms.

"We're impressed with the outstanding job the Lockheed management and employees have done there,"said CH2M Hill spokesman Andre Armstrong. DOE consistently has given Lockheed good grades at Hanford.

No major changes in Lockheed's Hanford operation are planned immediately. Any changes will be gradual, Armstrong and DeLozier said.

CH2M Hill is leaning toward keeping as many top Lockheed Hanford managers as possible, Armstrong said. "Everyone here (at CH2M Hill's headquarters) thinks Fran DeLozier is a top-notch manager,"Armstrong said.

The sale comes as Lockheed and the Office of River Protection have almost finished negotiating the company's first prime contract to manage the tank farms.

Lockheed previously managed the tank farms as a subcontractor of Fluor Daniel. Earlier this year, Congress split the Office of River Protection from the rest of DOE Hanford operations so the new agency concentrates solely on tank waste issues. As a result, Hanford officials decided to make Lockheed a prime contractor.

That happened Oct. 1, and Lockheed and the Office of River Protection have been hammering out a new contract since, which CH2M Hill appears likely to assume.

CH2M Hill still has to decide if it will sign that contract, Armstrong said. But, he added: "We've been looking at the negotiations. If we didn't think we could perform (to the contract terms), we would not have gotten into it."

Only a couple of incentive issues are left to negotiate, DeLozier and French said. DOE has not nailed down the tanks farms' budget for fiscal 2000, which began Oct. 1. It is expected to total between $325 million and $348 million.

CH2M Hill's profit would come from performance fees for meeting or exceeding specific goals. The contract is set up so that if CH2M Hill performs to the level Lockheed achieved in fiscal 1999, its performance fee would be $7 million, French said. That can climb to $15 million if CH2M Hill achieves additional specific goals that will speed up work. During 2000, if CH2M Hill accomplishes specific work, scheduled for 2001 and beyond, without exceeding its budget, it can earn another $5 million, bringing its maximum profit to $20 million, French said.

CH2M Hill began as a small engineering firm in Oregon in 1946. Today, it has 7,000 employees working around the world in engineering, environmental, construction and other projects. CH2M Hill has had a presence at Hanford for about 30 years and has a small subsidiary that is part of Bechtel Hanford Inc.'s environmental restoration team.