A Government Accountability Office (GAO) report released July 24 makes several “observations” about management challenges at the Department of Energy (DOE). Though most concern weapons program issues, one problem area touches the nuclear power industry.
The overview of the 12-page report, “Observations on DOE’s Management Challenges and Steps Taken to Address Them,” begins by noting that “management of major projects and programs, security and safety at DOE sites, and reliable enterprise-wide management information, including budget and cost data, are among the most persistent management challenges the department faces.” Of particular interest to the power generation sector are the GAO’s observations about challenges “managing major projects and programs,” including the National Nuclear Security Administration’s (NNSA) poor track record with major projects and programs that “have incurred significant cost increases and schedule delays.”
The GAO reported earlier this month that “the cost estimate range for a project to construct a modern Uranium Processing Facility (UPF) at DOE’s Y-12 National Security Complex in Oak Ridge, Tennessee, had increased five- to seven-fold to up to $6.5 billion since the project’s inception in 2004. Furthermore, the most recent cost estimate range may no longer be valid after the contractor reported in August 2012 that the UPF’s roof would have to be raised 13 feet. GAO is currently assessing DOE cost estimating policies and practices and plans to issue a report based on this work later this year. DOE’s actions to improve project management appear promising, but their impact on meeting cost and schedule targets may not be clear. Because all ongoing major projects have been in construction for several years, neither EM nor NNSA has a major project that can yet demonstrate the impact of DOE’s recent reforms.”
Additionally, in March of this year, the GAO reported that the DOE is forecasting an increase in the total project cost for the MOX Fuel Fabrication Facility at the Savannah River Site in South Carolina from $4.9 billion to $7.7 billion and a delay in the start of operations from October 2016 to November 2019.
(For details of the mixed oxide fuel facility, see the December 2012 issue of POWER.)
“According to NNSA officials and the contractor for the MOX facility, inadequately designed critical system components, such as the gloveboxes to be used for handling plutonium and the infrastructure needed to support these gloveboxes, are among the primary reasons for the proposed cost increase and schedule delay. The performance baseline for the MOX facility was set several years before NNSA issued guidance in 2012 to set cost and schedule baselines only after design work is 90 percent complete. As part of our ongoing review of NNSA’s Plutonium Disposition Program, we are evaluating whether such guidance would have been useful for NNSA to apply to the MOX facility, as well as the potential impact this guidance might have had on mitigating cost increases and schedule delays.”
Funding for the MOX facility was a bone of contention in the confirmation of Dr. Ernest Moniz as secretary of energy. To date, no contracts with customers for the MOX fuel have been signed.
The GAO report notes that some have called for removing the NNSA from the DOE and creating another department or establishing it as an independent agency. However, the report says, “as we have previously stated for the record, it is our view that few, if any, of NNSA’s management challenges stem from the organizational relationship between NNSA and DOE.”
The report notes that the DOE has agreed with most of the “numerous recommendations” the GAO has made over the years “and is taking steps toward implementing them,”
The report constituted testimony before the Subcommittee on Oversight and Investigations, Committee on Energy and Commerce, House of Representatives.
Sources: POWER, GAO
—Gail Reitenbach, PhD, Editor (@POWERmagazine, @GailReit)
NOTE: This story was originally published on July 24