The contractor for the Uranium Processing Facility at the Y-12 National Security Complex in Tennessee should in a matter of months deliver a new cost estimate and other information needed for the Department of Energy to sign off on construction of the complex.
The Department of Energy expects by the end of fiscal 2017, Sept. 30, to receive a design that is at least 90 percent completed, a validated cost projection, and a construction schedule for the remaining portions of the UPF, a set of buildings that will assume enriched uranium processing operations for the U.S. nuclear deterrent that are now housed in decades-old facilities at the Oak Ridge site, according to the office of Sen. Lamar Alexander (R-Tenn.).
The information would undergo five to six months of review and independent evaluation, after which the DOE project risk management committee will make its recommendation to the project acquisition executive on whether to approve Critical Decision-2 for the UPF. The executive makes the final call on whether to proceed, which Alexander’s office expects in mid-2018.
The acquisition executive in this case would be the deputy energy secretary, one of numerous senior Cabinet agency positions that have yet to be filled by the Trump administration. However, President Donald Trump has formally announced his intention to nominate former DOE and Capitol Hill staffer Dan Brouillette to the job.
In DOE parlance, Critical Decision-2 represents approval of cost, schedule, and scope targets for a project. Critical Decision-3 would normally be authorization to start construction. In this case, the two milestones are being “bundled,” the Knoxville News Sentinel reported in 2013.
It was not immediately clear whether the CD-2 information is being prepared by Consolidated Nuclear Security (CNS), the corporate partnership that manages Y-12 for DOE’s semiautonomous National Nuclear Security Administration; or by Bechtel, one of the CNS partners that is the subcontractor for design and construction of the Uranium Processing Facility.
After years of delays and escalating cost estimates, and under pressure from Capitol Hill, the NNSA has pledged to open a reworked version of the UPF by 2025 at a cost of no more than $6.5 billion.
This follows a redesign begun in 2012 for what was supposed to be one 350,000-square-foot plant that would assume all enriched uranium operations from the 72-year-old Building 9212 and other facilities at Y-12. The NNSA at the time acknowledged the structure as designed was not large enough to contain all the equipment it would need.
Subsequent assessments reportedly projected the facility’s cost at up to $19 billion, which led the NNSA to establish a “Red Team” led by then-Oak Ridge National Laboratory Director Thom Mason to study options for keeping the cost to no more than $6.5 billion. Following the Red Team’s report in May 2014, the NNSA moved ahead with plans to separate the UPF into several new buildings while extending the life of select existing facilities, including production buildings 9215 and Beta-2E.
About $500 million was spent prior to the redesign decision, though some portion of that – Alexander’s office could not provide a specific figure – contributed to current design activities. In total, $800 million to $900 million has been spent to date; that amount should rise to about $1.3 billion by the point of CD-2 approval, the senator’s office said.
Along with the redesign, Bechtel is also preparing the site for construction. The UPF utility substation has been completed, and workers in recent days started pouring concrete for a project support building that will house construction management teams during building and then be converted for office space and other uses once work is complete.
Alexander and Sen. Dianne Feinstein (D-Calif.), respectively the chairman and ranking member of the Senate Appropriations energy subcommittee that has jurisdiction over spending at Y-12, meet regularly with DOE and NNSA leadership, and the status of the UPF project is raised every time, the Tennessee senator’s office said. That also applies to Senate hearings involving representatives from the agencies, as well as formal “drumbeat meetings” with officials specifically on the Uranium Processing Facility.
The level of oversight from Capitol Hill remains insufficient, Ralph Hutchison, a critic of the UPF project and coordinator of the Oak Ridge Environmental Peace Alliance, said in an April 8 column in the Knoxville News Sentinel. He noted the lack yet of an updated schedule and budget for the facility, and said Alexander’s staff was evasive when he asked at one meeting whether they believed $6.5 billion was a viable estimate.
One staffer told Hutchison, “’Those are the numbers we are getting from the contractor,’” the activist wrote. “An artful answer that meant, ‘Nice try, taxpayer.’”
In a statement Thursday, the NNSA said it “remains committed to delivering UPF for $6.5B by 2025, so long as the Department’s annual budget requests are supported by Congress.” Bechtel directed questions to Consolidated Nuclear Security, which noted by email only that the NNSA had issued a response on the matter.
Alexander’s office declined to address Hutchison’s column. However, it said there are signs that the NNSA will meet its schedule and cost targets. In prior years, agency officials raised their projections in every meeting with Alexander, but that pattern has stopped. Early parts of the project, such as site readiness and infrastructure activities, have also been completed at or below budget, and at or ahead of schedule.
The agency has also placed all major construction projects under the management of personnel with acquisition and program management experience, according to Alexander’s office.
