Todd Jacobson
NS&D Monitor
4/24/2015
The newly redesigned Uranium Processing Facility might be in jeopardy of breaching its $6.5 billion cost cap, according to the report accompanying the House version of the Fiscal Year 2016 Energy and Water Appropriations Act cleared by the House Appropriations Committee this week. House appropriators fully funded the Administration’s $430 million request for UPF, but said an internal peer review conducted by the National Nuclear Security Administration “indicated a potential for cost growth above the $6,500,000,000 cost target.” The NNSA scaled back the project last year in the face of growing costs, settling on a modular approach to replacing the Y-12 National Security Complex’s aging Building 9212. The NNSA did not respond to a request for comment about the internal peer review.
However, House appropriators remain worried about the new approach. “The Committee is concerned that the NNSA has not fully addressed the root causes of its past project management failures for major construction projects,” the appropriators said in their report. “Few details have been solidified on the UPF project and the NNSA’s inability to lay out any of its plans in its budget request is indicative of the challenges that the NNSA faces in delivering this facility.” In their report, the appropriators said $140.8 million for site preparation work would not be available until the NNSA submits to Congress an “independently-verified cost estimate for the entire scope of the project that details the cost and schedule targets for each planned subproject.”
Lawmakers Suggest NNSA Not Following Project Management Guidelines
The report indicates that the NNSA is not following DOE project management guidelines and will not reaffirm Critical Decision-1 after scaling back the project. “The project plans show significant funds being spent for construction activities before the project baseline is set and without formal approval from the acquisition executive, in this case the Deputy Secretary of Energy,” the report said. “… The Committee will continue to closely monitor progress on the project to ensure these and other issues are being addressed.” The bill does not restrict $289.1 million in funding for Project Engineering and Design.
The NNSA isn’t expected to reach the 90 percent design completion point on the project until Fiscal Year 2017, and won’t begin construction until that point. Before it changed course on the design of the project, the agency expected to reach the 90 percent design point in October 2015. The NNSA celebrated the completion of initial site preparation work in March, and a project to establish site infrastructure and services is expected to begin soon and wrap up in the spring of 2018.
