UPF Federal Project Director John Eschenberg acknowledged that the cost figures contained in a recently distributed briefing package put together by the Government Accountability Office are correct. Those figures show the current best estimate on the big project's cost is $6.0 billion, and the GAO briefing package suggested there's a likelihood of the project exceeding the high end of the official cost range for UPF of $4.2 billion to $6.5 billion.

"The facts are facts," Eschenberg said. But he added that he didn't necessarily agree with the way some cost figures were interpreted and the conclusions.

During an interview with Eschenberg at this week's Tennessee Valley Corridor Summit, I also sought to clarify other aspects of the cost estimates on the giant project at Y-12.

He confirmed that the $6.0 billion "point" estimate, the best available cost estimate at the moment, is only for the first phase of the UPF, which focuses on transferring the work at the existing (World War II-era) 9212 uranium complex into a newly constructed UPF. That does not include the UPF work that's been deferred, which is the uranium machining activities now done at Building 9215 or the weapons assembly/disassembly work that's currently done in a building known as Beta-2E. Those will be done later at Phase 2 and Phase 3 of the UPF project.

However, when the cost range ($4.2B-$6.5B) still used by NNSA was developed a couple of years back, it did include the entire project, so the fact that Phase One is now rivaling the top end of that estimate seems to give a better idea of how the cost has grown -- spurred, in part, by the forced redesign to accommodate the space-fit problems with the first design effort.

Asked if there now was a cost range that includes all three phases, Eschenberg replied, "No."

He reiterated that there won't be a true cost on UPF until the design is almost done.

"My official position is I'm not going to declare what it's going to cost until we're 90 percent design complete and until I solve all the technology issues," the federal project chief said, noting that'll be after the Critical Decision-2 pckage has been approved.

The first phase is the most important, Eschenberg said. "We need to put our men and women (in 9212) in another building," he said.

But he emphasized that the Phase One will actually cover "a little bit more" than just the transfer of the 9212 mission.

"We're sizing the building and all of its infrastructure, ventilation systems, power distribution, all that ..... the entireity of it all. (But) we won't, in this phase, put in the machines -- the lathes -- from the machine shop."

Eschenberg acknowledged that he'd been unhappy with B&W Y-12 -- the government's managing contractor at Y-12 -- a couple of months ago for some continuing problems in controlling the design of the Uranium Processing Facility.

But he lauded B&W, as well as Bechtel, the other corporate partners in the B&W Y-12 contracting team, for stepping up to the plate and addressing weak point in recent times.

He said there'd been a great deal of "corporate involvement" to address his concerns.

"We're starting to get some of these technical issues resolved and behind us," Eschenberg said, noting progress in the engineering reevaluation.

"I'm very pleased with the contractor's actions," Eschenberg said, recalling the letter he sent to B&W a couple of months ago raising new concerns about the design.

"I wasn't happy . . . and B&W reacted to that," he said. "We've got a whole suite of corporate resources that have come in. My new counterpart, Carl Strock, coming in here now. And taking command of this job. And really driving forward on this objective, and that's finish the design and make sure we understand where our risks are . . . "

The UPF team now totals about 650 people, he said.

Strock, who formerly headed the U.S. Army Corps of Engineers, was brought to the project leadership from the Bechtel camp, and his arrival to take over UPF would appear to be tied to the incoming contract team of Consolidated Nuclear Security (headed by Bechtel). CNS won the $22 billion contractor for managing Y-12 and Pantex, but it remains under protest. The NNSA is reportedly addressing some of the protests issue upheld by the Government Accountability Office and is taking new information from CNS and two losing bid teams.

Asked if Strock's leadership on UPF is contingent on the CNS contract award being upheld, Eschenberg said, "That's a fair assessment."

He acknwowledged that the pending transition of contractor is a concern of his, although he praised the current contractor team with keeping its focus on the job at hand -- the design of UPF.

Eschenberg said: "I'll be honest with you - the people I worry most about are the ones actually doing the work. Because they're unsettled by whom they'll be working for. How might it affect them? How might it affect their health insurance? Might it affect their benefits? It's not. But the employees don't have a full picture of that. And this is not the first time many of them have been through these contract transitions. And so I understand why they're very unsettled about this. But I think we've got a system on large acquisitions, a competitive system. It has a feature where it can be reevaluated, which we're in now, a very narrow reevaluation, and I think we're all looking forward to a prompt adjudication of it.

"But I worry . . about the people because those are the people you're relying on every day to do their 'A' work. And they're staying focused on it, but over time that can kind of wear on the employees.'"

U.S. Sen. Lamar Alexander, who is the ranking Republican on the Senate Appropriations energy and water subcommittee, also was at the summit, and in an interview he said he was concerned about the cost growth and wanted to be absolutely sure there was a design ready before construction is started on the big project.

Eschenberg said he and the rest of the UPF team understand Alexander's concerns and will make sure they're addressed.

"We've heard the message very clearly, for the nuclear part of the build," he said. "We're committed to driving to - and possibly beyond - 90 percent design before we start construction.''

He differentiated between the site readiness, which is taking place now under three contracts, and actual construction. Construction won't begin until a giant hole is excavated for the foundation, he said.

"But the senator makes a fine point," he said.

Photo credit: Department of Energy/Lynn Freeny

Posted by Frank Munger on May 31, 2013 at 11:35 AM |