Contractor inexperience with big-ticket projects and the Department of Energy’s failure to fully account for risks contributed to mushrooming cost and a three-year slide in schedule for a critical underground ventilation system at the Waste Isolation Pilot Plant in New Mexico, a government watchdog reported this week.
Since 2018, the cost estimate for the Safety Significant Confined Ventilation System (SSCVS) at the Waste Isolation Pilot Plant (WIPP) has risen dramatically from the initial $288-million and the operation date slid from 2023 to 2026, according to a report published Tuesday by the Government Accountability Office (GAO). Congress ordered the report as part of the National Defense Authorization Act for 2021.
GAO published the report nine months after DOE issued a request for proposals for a 10-year, $3-billion successor deal to the current WIPP operations contract, held by Nuclear Waste Partnership since October 2012, valued at $2.7 billion and is set to run through September.
Big names are rumored to be in the running.
A Huntington Ingalls Industries-led venture, National TRU Solutions, is believed to be one of several ventures seeking the $3-billion contract at WIPP. Huntington Ingalls has a 75% share in that joint venture, the existence of which is confirmed by paperwork filed with state and federal regulators.
An industry source said Friday that other teams vying for the WIPP business could include a Fluor-Amentum combination and perhaps Jacobs-Atkins as well as a Bechtel-BWXT venture.
As for the underground ventilation system, its estimated cost as of October 2021 was about $486 million, some 70% more than first planned, with a completion date of January 2026, GAO said. That is only slightly different from the update — of $494-million and final approval in June 2026 — offered by DOE and prime contractor Nuclear Waste Partnership at the Waste Management Symposia last week in Phoenix.
The project was 58% complete as of that big industry conference, according to a joint presentation by Janelle Armijo, the federal project director for DOE’s Carlsbad Field Office, and Steve Smith, capital infrastructure manager for the contractor. Two new surface structures that are part of the SSCVS — the New Filter Building and the Salt Reduction Building—are both a little more than half finished, according to the presentation.
For big capital projects, DOE bosses for WIPP must follow the agency’s Order 413.3B, according to the GAO report. The order requires DOE’s Office of Program Management to do “an independent and objective root cause analysis to determine the underlying causes of the cost overruns, schedule delays, and performance shortcomings.”
The DOE finished a root cause analysis on the SSCVS in April 2021, but is not required to draft a corrective action plan, GAO said. This needs to change, GAO said.
The agency’s analysis said Nuclear Waste Partnership “hired an unqualified subcontractor to perform the primary construction responsibilities of this project,” according to GAO.
The original sub, Christensen Building Group and its Critical Applications Alliance, was terminated by the Amentum-led prime and subsequently replaced by a Kiewit subsidiary. The original subcontractor sued Nuclear Waste Partnership in federal court and the case was settled in June 2021.
A passage in the GAO report indicates Amentum, formerly AECOM Management Services, could have taken a more active direct role in the infrastructure project.
“Specifically, DOE awarded the contract for the SSCVS capital project to the existing maintenance and operations contractor at WIPP, in part based on assurance that the contractor could rely on support from its parent company,” GAO said. “However, according to a DOE official, DOE did not get that assurance in writing, and support from the parent company was insufficient to prevent or mitigate the significant downturn in performance, according to DOE’s analysis.”
Amentum declined comment. The DOE said issues cited in the GAO report are already being corrected.
“Over the past two years DOE has taken significant steps to address the issues that DOE self-identified and were reinforced by the GAO in their March 2022 report on Construction Challenges at WIPP,” a federal agency spokesperson said in a Thursday email. “The DOE response has included changing construction contractors, increasing project oversight and improving risk management activities for the project.”
Nuclear Waste Partnership (NWP) also failed to fully gauge the overall impacts of 200 engineering changes and how the tweaks affected cost and timeline, GAO said. “[T]he contractor did not properly evaluate subcontractors and awarded a $135 million Construction subcontract to an entity that did not have adequate qualifications to perform certain construction responsibilities for the project,” GAO said.
Another problem is that DOE has had five different federal project directors on the SSCVS, “which led to a lack of continuity and inconsistency in risk management plan oversight and compliance,” GAO said.
The risk analysis last year also pointed to a long-running problem at the transuranic waste disposal site near Carlsbad, N.M., according to the GAO report.
“DOE and contractors have not found viable solutions to incentivize personnel to work and stay in the Waste Isolation Pilot Plant area,” GAO said, adding turnover is a big problem.
Since a February 2014 underground radiation leak, ventilation hinders WIPP operations because air must be filtered after passing through the contaminated areas, and WIPP has limited air filtering ability, GAO said. Because of this, WIPP is limited to doing one of its three vital tasks at a time—maintenance, salt mining or waste disposal. It cannot currently multi-task these jobs. The SSCVS is meant to fix this by increasing underground airflow nearly three-fold to 540,000 cubic feet per minute.
Agency officials say as long as the recently-revived 700-C underground fan works as expected, “they do not need the SSCVS until December 2026,” GAO said in the report.
The DOE restarted the 700-C fan in October 2021 after it had been largely idle since 2014, GAO said in the report. “DOE officials told us that they are currently evaluating, as a mitigation strategy, a second legacy fan — called 700-B — to determine whether it could function as a backup to the 700-C fan.”
Regulatory Worries Over New Panel
Meanwhile, GAO also said DOE “faces risks related to construction and regulatory delays for completing the first new panel of the additional physical space at WIPP — panel 11 — by August 2025, which could affect DOE’s transuranic waste cleanup program at multiple waste generator sites across the country,” GAO said.
The New Mexico Environment Department as of January has not completed its review of DOE’s 10-year permit renewal to keep running WIPP through 2030. Although the old permit technically expired at the end of 2020, it is still good given the federal agency applied for 10-year renewal before the deadline, GAO said.
In addition, the Environmental Protection Agency (EPA) is required to certify WIPP’s continued compliance with EPA’s disposal regulations every five years, GAO said. DOE officials expect the EPA recertification decision in late May.
