By George Lobsenz
The Senate Armed Services Committee, expressing concern about management of multiple big-ticket Energy Department projects, has proposed a new trigger system that would require the agency to notify Congress when projects suffer major cost overruns and schedule delays–and to provide new assurances that troubled projects remain needed and that problems are being fixed.
In approving its defense authorization bill for fiscal year 2011 last week–which included $17.7 billion for DoE’s nuclear weapons and cleanup operations next year–the committee voiced particular worries about:
- Design and management changes being considered at the massive radioactive waste processing plant being built by DoE at its Hanford site;
- Continuing uncertainties about the appropriate size of the new plutonium facility at Los Alamos National Laboratory–and whether DoE’s National Nuclear Security Administration (NNSA) was being forthright about cost estimates; and
- Budget increases sought by NNSA for the Kansas City Plant replacement facility, even though the facility is supposed to be funded by private developers for lease to NNSA.
On another big initiative, the committee praised NNSA, DoE’s semi-autonomous weapons agency, and the department’s environmental management office for collaborating on a new plan to combine facilities to be built at the Savannah River Site to purify surplus weapons plutonium for conversion into commercial reactor fuel–a key nonproliferation project.
However, the committee said delays in the plutonium purification project threaten to severely slow the production of feed materials needed to make efficient use of the mixed oxide (MOX) fuel fabrication facility, which is already under construction at the South Carolina nuclear weapons facility to manufacture the mixed plutonium-uranium fuel to be burned in commercial reactors.
Beyond airing its concerns about individual DoE and NNSA initiatives, the committee proposed a far-reaching new mechanism to address long-standing complaints by the congressional armed services and appropriations committees that they too often remain in the dark about significant cost overruns and schedule delays at the department’s priciest nuclear weapons and cleanup projects.
Under the bill, NNSA would have to establish a cost and schedule baseline for each project in its program to refurbish and extend the operating life of the nation’s aging nuclear warheads. Similarly, DoE would have to establish cost and schedule baselines for each new weapons facility or cleanup project with a price tag exceeding $100 million.
Those baselines would have to be submitted to the congressional armed services committees within 30 days after they are established by DoE and NNSA.
Thereafter, if DoE or NNSA determines that any of the $100 million-plus projects exceed 125 percent of the established cost or schedule baselines, the armed services committees would have to be notified within 30 days.
Further, the committee said in its report on the defense authorization bill: “Within 90 days of a cost or schedule breach the [NNSA] administrator or the [DoE] secretary as applicable shall notify the congressional defense committees if the project will be terminated or continued.
“If the project is continued, the [NNSA] administrator or the [DoE] secretary as applicable shall certify that a revised cost and schedule baseline is in place, that there is no alternative available other than to continue the project and still meet mission needs, and that a management structure is in place adequate to manage and control the cost and schedule of the project in the future.”
The proposed new trigger mechanism for poorly performing DoE and NNSA projects reflects intense congressional frustration about continuing and substantial cost and schedule creep among many of the department’s most complex projects. While acknowledging that some projects present unprecedented technical and safety issues–especially cleanup of highly radioactive wastes in decades-old facilities–lawmakers believe management failures by DoE site offices and contractors add millions of dollars and years of schedule delays to many projects.
The poster child for such concerns has been the radioactive waste processing plant at Hanford, which has a price tag exceeding $12 billion, making it the single biggest project in the department.
After a series of design and construction problems at the waste processing plant in recent years, the committee noted DoE had recently launched yet another review to examine the sensitive issue of whether levels of radioactivity in Hanford waste may be lower than previously believed–a change that could allow the department to save money by installing less elaborate safety systems in the plant.
The committee praised DoE for forming an independent technical review panel to look at any design changes made in the Hanford waste plant. However, it also reminded DoE of its commitment to also provide full information about any design changes to the Defense Nuclear Facilities Safety Board (DNFSB)–a federal watchdog agency that has repeatedly forced DoE to address inconvenient and expensive safety issues on other big projects.
The Senate committee also alluded to the possibility that DoE headquarters officials might take management responsibility for the Hanford waste plant away from officials at the Hanford site in eastern Washington, namely, DoE’s Office of River Protection.
“The committee…notes that the DoE is considering some changes to the management approach to the [Hanford waste plant] project and urges the DoE to ensure that the site retains project management responsibility or remains as integrally involved as possible in the management [of the waste plant] as the site must be responsible for the long-term operation of the facility…,” the committee said in its bill report.
On another high-profile project, the committee urged NNSA to resolve “many issues’ about the new Chemical and Metallurgical Research Replacement (CMRR) facility at Los Alamos, including how much plutonium processing capacity it needs to have given the shrinking size of the U.S. nuclear arsenal.
The committee said it still considered the CMRR facility “essential” to modernization of DoE’s nuclear weapons complex, but said it is “very concerned” that NNSA is not following DoE procedures on project management and cost analyses.
The committee ordered NNSA to conduct “a true independent cost estimate” of Phase III of the project and added: “The committee is concerned that the Phase III project is being divided into multiple sub-projects. Notwithstanding this management approach the committee directs the CMRR baseline to reflect all phases and subprojects for the purposes of the cost and schedule baseline provision and to be accounted for as a single project.”
On the replacement facility being built by NNSA for the Kansas City Plant, which makes electronic components for warheads, the committee was even blunter in its questioning of NNSA’s management of the project.
The committee noted that NNSA has followed an alternative financing course for the Kansas City project under which a private developer is paying for construction of the facility and then plans to lease it to NNSA for 20 years. NNSA maintains the “third party” ownership and leasing approach will save the government money, but critics suggest it is just a way for NNSA to avoid asking Congress to pay for an expensive new facility at a time when it is pursuing several other costly projects.
For its part, the Senate committee said while the private developer was supposed to pay for construction of the Kansas City facility, NNSA was still asking Congress for money for the project.
“The committee notes that the budget request for [the Kansas City facility] includes funds for `unique facility upgrades for utility and interior requirements,'” the committee said in its report. “The committee questions why funds are needed for upgrades and unique requirements at a facility that is being built to NNSA specifications.
“The committee is concerned that NNSA may be supplementing the construction costs. The committee also notes that ground-breaking for the new building has been delayed until August 2011.”