Todd Jacobson
NS&D Monitor
8/29/2014
Sandia National Laboratories may have trouble meeting neutron generator production requirements in the future, according to a Department of Energy Inspector General report released this week. The audit report calls into question Sandia’s ability to ramp up neutron generator production as requirements for the key nuclear weapons component increase 50 percent in Fiscal Year 2016. In FY 2013, Sandia produced about 600 neutron generator units, but it will need to produce 900 per year in FY 2016 to support limited-life component exchanges on the W80, B83, B61-11, B61-12, and W88 from FY 2015 to FY 2019. That’s in addition to ongoing life extension requirements for the W76 and limited-life component exchanges on the W78 and W87.
Can Lab Maintain Production Rates?
The IG said Sandia briefly increased production during a three-week period in FY 2013, producing 40 “tube starts” per week with about two-thirds being usable, an increase from 24 tubes per week (with a quarter usable) during FY 2012. The IG said that “it is not certain whether SNL can sustain that production-level and yield over an extended period of time,” indicating that production dipped in FY 2014 to about 12 tube starts a week. Sandia told the IG budget constraints impacted production in FY 2014 and that it planned to build up to 24 tube starts a week in late FY 2014 and 30 a week in FY 2015.
The IG also noted that production yields have varied significantly. In early FY 2014, the IG said yields were 33 to 49 percent of neutron tube production starts “due to unidentified quality issues with one lot of material which had met inspection and drawing requirements.” The varied yields, however, are considered to be part of the normal process of ramping up production. “Sandia is confident it can meet its mission deliverables,” Sandia spokesman Jim Danneskiold said.
The IG credited Sandia for developing, producing and testing new neutron generator designs to address challenges and risks and working to preserve its supplier base for key materials and components. It also said Sandia was trying to be more efficient in production and upping spending on materials and components, machining and tooling, and staffing. “SNL optimized equipment usage by repairing and requalifying equipment and testers to be utilized as backups,” the IG said. “To their credit, NNSA and SNL created annual and long-term schedules to meet production and shipping requirements, and established project milestones and related performance measures for the NG Enterprise.”
Cost Estimating Methods Questioned
The report also raises questions about Sandia’s ability to fully recover the costs of making the neutron generators for the United Kingdom, noting that the lab was in the process of improving its cost tracking methods to more accurately account for the costs and overhead associated with units produced. The IG said that Sandia provided an estimate of $146,000 per unit in Fiscal Year 2013 for units that will be delivered in FY 2015, but the NNSA retracted that estimate because of “inconsistencies” found in the cost model used by Sandia. It replaced the figure with a $97,000 placeholder, but the final cost per unit won’t be established until the shipments to the United Kingdom begin in FY 2015.
The IG said that federal and DOE policies require that costs for work outside the government be fully recovered and should include all direct and allocable costs, but they don’t provide a definition of what those costs are. “However, due to SNL’s inconsistent cost methodology, there is a risk that NNSA may not be fully compensated for the cost of building NG units for the UK,” the IG said.
