The US military has cancelled the preliminary award of a potentially nine-figure contract to the company it had tentatively selected to build a small nuclear power plant at Eielson Air Force Base near Fairbanks.
In August, the Department of the Air Force and the Defense Logistics Agency announced an “intent to award” the contract to Oklo – a Silicon Valley startup backed by Sam Altman, the head of the company behind ChatGPT who was ousted and then rehired this month.
In late September, the DLA’s energy arm reversed its decision, citing the need for “further consideration” of its obligations under a specific military contracting regulation, according to a memo sent to a rival bidder and obtained by the Northern Journal from another source.
The regulation states that the military should engage in post-bid negotiations and discussions for contracts worth $100 million or more.
A DLA spokeswoman, Michelle McCaskill, declined to make agency officials available for an interview. In an emailed response to questions, she explained the cancellation by repeating the language from the memo and said all bidders who responded to the agency’s request for proposals were still under consideration.
McCaskill said a “pre-filing notice of protest” of the award to Oklo had been filed with the US Court of Federal Claims, but she declined to provide a copy. A spokeswoman for Ultra Safe Nuclear Corp, the company that received the notice obtained by the Northern Journal, confirmed that her company had filed the pre-filing notice, but added that no formal protest had been filed.
Oklo is one of a growing number of companies developing so-called “micro-reactors”, which the military describes as small projects with “built-in safety features that self-adjust to changing conditions and demands to prevent overheating”.
The Eielson contract has attracted widespread interest from the energy industry; officials from companies such as Westinghouse, Rolls-Royce and Siemens attended a briefing on it last year, according to a list published by the military.
Oklo’s chief executive, Jake DeWitte, said in a brief interview that his company was letting the contract process play out.
“But we are more than excited about the opportunity,” he said.
Experts say the micro-reactor concept could be a good fit to replace generators running on expensive imported diesel in remote Alaskan communities or at resource development projects such as mines – not to mention for the military.
But the systems now being developed are not commercially proven: No micro-reactor has been built in the US since the early days of nuclear technology.
This month, the only company with an approved design, Oregon-based Nuscale Power, announced that it had cancelled a leading demonstration project in Idaho. According to Reuters, several potential customers had abandoned the project amid rising costs.
Oklo officials and military leaders had celebrated the August announcement that the company would build the micro-reactor at Eielson, home to dozens of fighter jets, including two squadrons of F-35s.
“You have a power source – local, within the facility – that will allow you to get those two critical fighter squadrons in the air and doing their business, doing their mission,” Deputy Secretary of the Air Force Ravi Chaudhary said at the time.
At five megawatts – about the average demand of the southwest Alaska hub of Bethel – military officials hailed the micro-reactor as a way for Eielson to generate carbon-free power that’s independent of the rest of the grid. The base currently relies on a 15-megawatt coal-fired power plant, according to KUAC.
Following the cancellation, the office of Republican U.S. Sen. Lisa Murkowski, who helped secure federal spending on micro-reactor development, asked the Department of Defense for a timeline but has not heard back, spokesman Joe Plesha said in an email.
“We will continue to monitor this issue closely,” he said.
At the time of the August announcement, the Air Force said the micro-reactor was expected to be online by the end of 2027, based on a directive in Congress’ 2019 military spending bill. McCaskill, the DLA spokeswoman, said there is no revised timeline for the contract process and that the agency still intends to meet all deadlines.
Ultra Safe Nuclear Corp spokeswoman Mary Woollen said her company remains “extremely interested in providing this solution to the Air Force and (is) awaiting notification from the DLA contracting officer as to the next steps in the acquisition process”.
“USNC believes it is in the best position to support the Air Force and will continue to pursue all avenues available to support its proposal,” she wrote in an email.
USNC, which is based in Seattle, has proposed building what could be Canada’s first micro-reactor in Ontario and aims to have it up and running by 2028.