Case Study 12: Privatization of The Pinellas Plant

Background

The DOE Pinellas Plant, located in Largo, Florida, was built in 1957. The plant’s historic mission included the design, development, and production of special electronic and mechanical equipment for nuclear weapons applications, including neutron generators, specialty capacitors, thermal batteries, crystal resonators, oscillators, and clocks. In late 1993, DOE made a decision to close the Pinellas Plant as a result of the declining weapon production mission. Production of components was completed at the end of fiscal year 1994. Nuclear weapon reconfiguration was completed in fiscal year 1995. Operations at the plant now consist of production capacity consolidation, records and property dispositioning, and deactivation and characterization activities required to leave the plant available for commercial use. All DOE activities are scheduled for completion by the end of fiscal year 1997. Lockheed-Martin is the current DOE management and operating contractor for the site.

The Effort

In March 1995, the Federal Government sold the Pinellas plant to the Pinellas County Industry Council (PCIC). PCIC is a nonprofit organization created by State legislation to promote industrial growth in the local community. DOE leased back space required for administrative personnel as well as the space in which deactivation and characterization activities will continue until the end of fiscal year 1997.

Current Status

DOE deactivation, characterization, consolidation, and dispositioning efforts are complete on approximately one-third of the facility. Activities are on schedule for transferring approximately 98 percent of the facility to the full control and responsibility of PCIC by the end of fiscal year 1997. The contract with Lockheed-Martin was recently modified to include specific performance incentives for exceeding the cleanup schedule. The PCIC is actively seeking tenants to occupy the facility. To date, 80 percent of the available rental space is leased. Among these new businesses are three specialty electronic manufacturing firms, two of which involve the commercialization of technologies developed at DOE facilities. One firm is manufacturing highly specialized radiation detectors developed at the DOE Santa Barbara facility, while the other is manufacturing a tumor-detecting instrument developed at the DOE Los Alamos National Laboratory. The third firm is taking advantage of the electronics manufacturing basis of the site and will be designing and manufacturing communications electronics. In addition to these three firms, a soldering school and a graphics design company have moved onto the site as a result of the low cost.

Lessons Learned

In privatizing a facility such as the Pinellas Plant where the DOE mission is being eliminated, local community involvement is crucial. In this case, the community established a nonprofit economic development corporation to take ownership of the facility. The community must be involved with all efforts to make the facility economically viable and consistent with the community’s long-range needs. It also is essential for DOE and local community interests to reach consensus on privatization goals and methods. Once achieved, this consensus must be maintained as adjustments and updates are made to changing priorities and circumstances. This requires that the DOE field office have the authority and means to lead the process. It also requires that the DOE field office be an aggressive, proactive force to promote privatization.