Four-Year Project Now to Take More Than 10 Years to Finish
Mike Nartker
WC Monitor
9/19/2014
Efforts to complete the long-troubled Separations Process Research Unit (SPRU) D&D project appear to have hit a new hurdle, with the Department of Energy now projecting the need for an additional three years from previous estimates to complete the work. While DOE had previously stated a goal of having the SPRU D&D project completed by the end of Fiscal Year 2015, the Department now is planning for the work to be done by September 2018, according to a presentation Thomas Johnson, associate deputy assistant secretary for acquisition and project management in DOE’s Office of Environmental Management, gave at a meeting of the EM Site-Specific Advisory Board chairs this week. A DOE official late this week attributed the extended schedule to contractor URS’ “current pace of work” and monthly spending rate of approximately $3 million. “The completion date includes finalization of all documentation required to close the project. Physical work on the site is projected to complete during 2017,” the Department official said in a written response.
In July, DOE acknowledged that it was at risk of missing the FY 2015 goal, expressing concern over URS’ performance of the SPRU D&D project’s contractor. When asked this week how the Department would gauge URS’ work at SPRU, the DOE official said, “URS is working safely and continuing to make steady progress at SPRU. The pace of work activities is completely within the control of URS. DOE currently plans to complete the project under the current contract.” For its part, URS declined to comment this week on DOE’s new schedule for the SPRU D&D project, referring questions back to the Department.
Contamination Incidents in 2010 Derailed Work
The SPRU D&D project entails the removal of two buildings used in the 1950s to research chemical processes for separating plutonium and uranium from irradiated materials. In late 2007, URS won a four-year contract—then worth $66.9 million—for the project, which was to have been completed by the end of 2011. In the fall of 2010, though, a set of contamination incidents occurred during open-air demolition activities at one of the two SPRU buildings that resulted in the spread of low levels of contamination to the broader Knolls Atomic Power Laboratory, where SPRU is located, as well as to a local river. The contamination incidents helped to stall work at SPRU for approximately two years, and led to changes in how D&D would be performed at the site, chiefly through the addition of enclosures constructed around the buildings with ventilation systems.
DOE’s Total Estimated Cost Less Than URS’ Estimates
Johnson’s presentation this week also raises new questions over how much it will ultimately cost to complete the SPRU D&D project—an issue that could have significant financial ramifications for URS. Also in response to the 2010 contamination incidents, DOE subsequently moved to modify its contract with URS to set up a cost-sharing approach for completing work. That approach entails DOE being responsible for all project costs up to $105 million; DOE and URS splitting all costs incurred from $105-145 million; and URS being fully responsible for covering all costs exceeding $145 million. Since the contract modification was finalized, though, URS has been pushing back against being held responsible for significant portions of the costs to date incurred at SPRU, which have included, among other issues, addressing the impacts of bad weather at the site.
In an earnings report released in August, URS said the total project cost for the SPRU D&D project has increased to $280 million as of July 4. “In April 2013, WGI Ohio submitted claims against the DOE pursuant to the Contracts Disputes Acts seeking recovery of $118 million in unfunded requests for equitable adjustments (“REAs”), including additional fees on expanded work scope. Through July 4, 2014, the DOE has approved one of the REAs for $1 million and has authorized $34 million of additional funding primarily related to the hurricane-caused impacts,” the earnings report states. The report adds, “As of July 4, 2014, WGI Ohio has recorded $99 million in accounts receivable for project costs incurred to date in excess of the DOE contracted amount that may not be collected unless and until the claims are favorably resolved. In addition, due to continuing delays and disagreements about the responsibilities for the scope of the remaining project completion costs, WGI Ohio is unable to determine its portion of the remaining project completion costs, which may exceed $300 million.”
In contrast, though, Johnson’s presentation lists the “EAC”—estimate at completion—for the SPRU D&D project at $254.5 million. “The revised Estimate at Completion (EAC) of $254.5M is the DOE Federal Project Director’s estimate for completion. The DOE EAC includes DOE costs to date, estimated to-go costs and some project contingency associated with remaining project risks,” the Department official said this week. The official went on to say, “Discussions are ongoing in attempt to resolve current requests for equitable adjustment that have been submitted by URS. Costs above the contract cost cap are the responsibility of URS consistent with the contract.”
URS Says ‘Much D&D Progress’ Being Made
While DOE is pushing out the schedule for completing work at the SPRU site, URS said late this week that “much D&D progress” has been made. “Approximately 50% of contaminated pipe has been removed from cell #2 in building G2. G2 cells hatch cover size reduction activities are complete and openings of cells 1 through 5 have all been fitted with temporary hatch covers. In Building G2, vent and drain activities in cells 3, 4 and 5 are complete and we have completed pipe and equipment removal in cells 3 and 4,” URS spokesman Keith Wood said in a written response.
Outlining the work that has been completed at Building H2, Wood said, “In building H2, we have completed the radiation surveys and floor cleaning in cells 4 and 5. HEPA ventilation has been installed in cells 3 and 4 and asbestos tile removal in an elevated area. Packaging and removal of equipment and material from the basement to allow for safe access to cells is competed and contaminated pipe removal starts early next week.”
