GAO Assistant Director Jonathan Gill and David Trimble, GAO’s director of natural resources and environment, were on a panel on the summit’s final day. The focus was NNSA’s management of big projects. UPF was the main topic.
There were some positives in the presentation, but the GAO officials noted many expensive missteps on the UPF’s path to date.
The NNSA and DOE have a notably bad record on big projects, Gill and Trimble said, while acknowledging progress over the past couple of years in updating project and program management — such as requiring 90 percent design completion before construction.
Still, the GAO officials found it difficult to create a success story out of UPF. As Trimble noted, the cost of the project has increased sevenfold to $6 billion-plus and there’s still much uncertainty about where it’ll end up. GAO and others are looking at why the same cost issues seem to happen again and again, he said.
“Everyone is tired of singing the same song,” Trimble said.
Gill said there is a high level of congressional interest in the Uranium Processing Facility, in part because of skepticism over NNSA’s ability to manage it. Because of that congressional interest, GAO has been under orders to do quarterly audits of its progress — although Gill said that’s being amended because of the difficulty in creating that many reports. The next review is due for delivery in March.
In short, Gill said the UPF project that the Government Accountability Office has been reporting on is unlikely to be the one that is built. (That’s a decidedly different view that one offered last week by U.S. Rep. Chuck Fleischmann). Gill referenced the NNSA’s reevaluation of the project that’s under way.
The National Nuclear Security Administration recognized in December 2013 that the cost estimate for UPF was unlikely to be valid, he said.
GAO’s early reviews of UPF attempted to shed light on how the project grew from a cost range of $600 million to $1.1 billion to a range of $4.2 billiion to $6.5 billion. The initial cost estimate, Gill said, was based on the price tag of the “distantly related” Highly Enriched Uranium Materials Facility that was built at Y-12. DOE did not have a cost estimating policy, he said.
There have been multiple other issues, including the cost-fit problem that forced a redesign and added $540 million to the price tag and ate up 45 percent of the project’s contingency before ground water broken. There have also been questions about management of risk and technologies for the project.
“Many of the issues that have plagued UPF,” Gill said, “are rooted in the bad old days of DOE and NNSA project management . . . They overpromised capabilities and underestimated costs.”
The news from GAO wasn’t all bad, however. The speakers had good things to say about the UPF Project Office in Oak Ridge, saying the office had demonstrated some “impressive capabilities,” added significant staff expertise, and likely would keep the Uranium Processing Facility from being as bad as two other high-cost DOE/NNSA projects — the Waste Treatment Plant at Hanford and the MOX facility at Savannah River.
But it took about a decade and a billion dollars to get the project on the right track, Gill said.
I caught up with Gill following the talk, and asked him specifically about the NNSA’s creation of a Red Team (headed by ORNL Director Thom Mason) to evaluate alternatives for UPF and the agency’s goal to keep the cost between $4.2 billion and $6.5 billion.
“The efforts by NNSA have been enormous over the past couple of years and I like the project office. I think John Eschenberg is a good dude. But I think they probably saved us from being $4 billion into a project that might be very difficult to complete. Like WTP or MOX. Now, so that’s the positive (not being the worst project),” Gill said.
“But that means we’re back to the drawing board. And we’re not anywhere close to replacing 9212 capability. We’re not any closer. So that’s the issue.
“You can look at it as a half full, half empty. I’m glad that they finally came to the conclusion, hey, we’re not going to be able to do this. The writing was on the wall. The (Department of Defense) CAPE report put a nail through it, and NNSA in its own analysis acknowledged that, hey, it’s going to cost more than we thought. We’ve already drew up a lot of our contingency . . . You only have so much funding over a certain amount of time. What’s disappointing is NNSA didn’t have the data, like CAPE did, to say, OK, a facility of this nature is X number of dollars per square foot, and your amount that you can budget for this annually is $300-$500 million, whatever that figure is. And so, using those simple metrics, it’s going to be 2030 before this is done. So it was good analysis, not rocket science but good analysis, that I think finally the agency couldn’t wriggle out of it.”
A new feature on Atomic City Underground allows readers to sign up for email updates and receive a notice each time new information is posted on the news blog. Just put your email address in the box on the lower right of the blog’s front page and follow instructions. Thanks to all loyal readers.