DOE IG: OAK RIDGE BIOMASS PLANT COULD INCUR $67 M IN EXTRA COSTS

A lack of oversight and planning at the Department of Energy’s new biomass facility at Oak Ridge National Laboratory could cause more than $67 million in unnecessary costs over the life of the project, according to a DOE Office of Inspector General report released yesterday. Last year DOE began operating biomass plants at Oak Ridge and Savannah River under Energy Savings Performance Contracts with private firms. While the IG review found no major issues with the Savannah River plant, it “noted that the Oak Ridge Site Office had not always planned and operated its Biomass Plant to minimize the Government’s risk.” 

For example, Oak Ridge did not require characterization testing before awarding the contract, resulting in a $44 million lifecycle increase, and also did not mitigate the risk of biomass fuel shortages or verify the quantity of fuel deliveries. “These problems were due in part to inadequate guidance and oversight,” the report states. “Notably, the Department had not required major ESPC construction projects to adhere to critical elements of its existing capital project management and acquisition directive. Also, the Department had not developed a process to identify, document and disseminate lessons learned from ESPC projects across the complex.” In a response to the IG, DOE management agreed in general with the report’s recommendations and outlined how it is addressing the issues.