The Energy Department’s inspector general said Tuesday a Hanford Site contractor appears on track to start removing 27 cubic meters of radioactive sludge from a building near the Columbia River by October 2018, but dinged the company for masking cost overruns with dodgy accounting.
CH2M Plateau Remediation Co. “appears to be on schedule to meet current milestones,” but also shifted almost $18 million in contract funding that was supposed to be held in reserve to cover developments such as sudden spikes in construction-material costs.
Specifically, the company used the so-called management reserve to erase an $11 million overrun for adding an Annex onto the K Basin building. The additional funding would make it easier for workers to transfer sludge into the containers that will be used to move the material away from the river and into Hanford’s T-Plant for temporary storage. The Annex had a planned cost of $24.3 million and an actual cost of $35.3 million, according to the inspector general’s audit report.
Likewise, CH2M used management reserves to cover up a $3.6 million cost overrun — from the forecast $33.3 million to the actual $36.9 million — on design work related to containers in which the sludge is stored, the inspector general wrote.
While the DOE IG did not question whether this accounting sleight of hand was allowable, the agency watchdog was concerned that erasing the apparent overruns on the Sludge Removal Project might make CH2M’s performance on the contract look better than it actually was, according to the report. The inspector general therefore suggested that “the Acting Assistant Secretary, Office of Environmental Management and [CH2M] coordinate with the Director, Office of Project Management Oversight and Assessments to take necessary steps to ensure the Sludge Removal Project’s historical cost variances remain visible for project performance reporting purposes.”
The K Basin sludge comes from irradiated fuel rods left over from Cold War-era plutonium production at Hanford. The sludge eventually will be transported from the annex to Hanford’s T-Plant. Later, it will be shipped to the Waste Isolation Pilot Plant in New Mexico as transuranic waste.
A DOE spokesperson at Hanford referred questions to a DOE spokesperson in Washington, who did not reply to questions.
CH2M did not reply to a request for comment Tuesday.
