The two-company team of Bechtel National Inc. and Washington Group International Inc. is now Hanford's radioactive waste glassification contractor.

The companies signed a 10-year contract with the Department of Energy on Monday - about five weeks before the legal deadline for DOE to replace fired contractor BNFL Inc.

The two companies could earn up to $600 million in profits during those 10 years.

"This keeps us on track for Hanford's cleanup," said Harry Boston, acting manager of DOE's Office of River Protection, which supervises Hanford's 177 underground waste tanks and the project to convert the tanks' highly radioactive wastes into glass.

"(DOE) should be congratulated for selecting a contractor a month ahead of schedule," said U.S. Rep. Doc Hastings, R-Wash.

The project is supposed to convert the first wastes into glass in 2007 and have the plants fully running by 2011, when a new contractor is to take over.

The waste storage tanks are the site's biggest and most complicated problem. The 53 million gallons of wastes are mostly in 149 old leak-prone, single-shell tanks, 67 of which are suspected of leaking more than 1 million gallons. Hanford is moving all the wastes into 28 safer double-shell tanks for eventual vitrification.

The Bechtel-Washington team - with Bechtel leading - was picked over the sole competing team, which consisted of Fluor Corp., Cogema Inc. and Foster Wheeler Corp. The decision restarts the glassification project after a seven-month delay since BNFL was fired from the job.

"Both teams submitted good proposals consistent with (DOE's) request for proposals," Boston said.

DOE looked at design, construction and operating plans and experience - and liked Bechtel-Washington's approach better, said Leif Erickson, the Office of River Protection's deputy manager. Boston and Erickson declined to elaborate on why Bechtel-Washington's approach was better - citing corporate proprietary information in both proposals.

The Fluor-Cogema team has 10 days after it is debriefed on why it lost the bid - probably next week - to formally protest the decision.

"We felt our team delivered a competitive bid that met the department's needs. Despite our disappointment at not being selected, we look forward to the debriefing to better understand the basis for the decision," said a Fluor statement.

Fluor spokesman Jerry Holloway declined to speculate if Fluor might protest.

The new contract differs substantially from the contract that BNFL's four-company team, which included Bechtel, had with DOE. Under that so-called "privatized" contract, BNFL was to borrow billions of dollars up-front to build the treatment plant, and DOE would not start paying BNFL until 2007, when the first wastes were to be glassified.

But privatization created extraordinarily high financing costs that caused the project's price tag to skyrocket from an original estimate of $6.9 billion to $15.2 billion. In April, DOE fired BNFL, scrapped privatization and began scrambling to hire a new contractor by Jan. 15.

DOE's new contract includes incentives in which Bechtel-Washington will be reimbursed its costs, with any fees - meaning profits - coming from meeting or beating timetables and budgets.

The most that Bechtel-Washington can earn from cutting costs and beating schedules is $600 million through 2011.

DOE recalculated the project's cost from 2001 to 2011 at $4 billion, and sought bidders. The two bidding teams made up most of the companies in the small world of radioactive waste glassification.

The winning Bechtel-Washington team has strong ties to Hanford.

Bechtel, the San Francisco-based multinational 100-plus-year-old construction giant, was BNFL's primary partner in the original glassification venture. So, DOE removed it from any role in the project from June until now, putting CH2M Hill Hanford Group in place as an interim caretaker for the partly designed project.

Erickson said steps were taken to ensure Bechtel's familiarity with the project did not hurt other bidders. "We don't believe Bechtel had an unfair competitive advantage," he said.

But Gerald Pollet, director of Heart of America-Northwest, disagreed. "There's no question they had an automatic advantage," he said.

Washington Group began as a three-man highway construction firm in Missoula, Mont., in 1964. Since then, it has become the Northwest's biggest construction and engineering company.

It merged with then-bankrupt, Boise-based Morrison Knudsen Corp. in 1996. In 1999, it and BNFL bought Westinghouse Electric Corp.'s government and nuclear operations with Morrison Knudsen as majority owner. Westinghouse built and runs radioactive waste glassification plants at DOE sites at Savannah River, S.C., and West Valley, N.Y., as well as DOE's underground radioactive waste repository in New Mexico.

In July, Morrison Knudsen bought Raytheon Engineers & Constructors, which three months earlier gave DOE a cost analysis that produced the $4 billion price tag for Hanford's glassification project through 2011. The new consolidated company became Washington Group International with $5 billion in predicted annual revenues.

Washington Group's purchases of Westinghouse and Raytheon were part of a long-term corporate plan to expand its business with DOE and to compete for radioactive waste glassification projects, said Brent Brandon, the company's vice president for investor relations and corporate communications.

The transition from CH2M Hill to Bechtel-Washington has a loose timetable. The contract encourages Bechtel-Washington to work fast and save money while meeting DOE's standards. The team is to turn in a detailed transition plan to DOE by Feb. 15. The team's master design-and-construction plan plus cost figures are to be ready by April.

Also in April, Bechtel-Washington is to select a subcontractor to look after operations interests as the plants are built and tested. BNFL and Cogema have both voiced interest in competing for that subcontract. Also, GTS Duratek, which designs and operates glassification melters, including those proposed by BNFL's original team, is interested in working for the new team.

BNFL, Westinghouse, Cogema and Duratek are the only companies in the world with experience operating radioactive waste glassification facilities.