The National Nuclear Security Administration has not sufficiently analyzed the root causes of cost increases in its plutonium disposition program, according to a Government Accountability Office report expected to be released today. The report looked at the Mixed Oxide Fuel Fabrication Facility, which rose in cost by about $3 billion in a 2012 estimate, as well as the related Waste Solidification Building. “NNSA has not analyzed the underlying, or root, causes of the Plutonium Disposition program construction cost increases to help identify lessons learned and help address the agency’s difficulty in completing projects with cost and schedule,”states a draft copy of the report obtained by Morning Briefing. It adds: “Unlike a root cause analysis, the cost drivers NNSA identified provide few details about why the drivers existed, such as DOE’s reasons for approving the MOX facility’s cost and schedule estimates before the design was complete.”
The report also takes issue with the NNSA’s latest cost estimates for the program. “NNSA’s most recent estimates for the plutonium disposition program did not fully reflect all the characteristics of reliable cost estimates (e.g., credible) and schedule estimates (e.g., well-constructed) as established by best practices for cost-and schedule-estimating, placing the program at risk of further cost increases,” it states, noting, “NNSA’s draft April 2013 lifecycle cost estimate of $24.2 billion for the overall program was not credible because NNSA did not conduct an independent cost estimate to provide an unbiased test of whether the estimate was reasonable” It also adds, “Because the MOX contractor’s September 2012 proposal for increasing the cost of the MOX facility did not include a formal analysis to examine the effects of changing assumptions, it was minimally credible.”
