Nuclear Nonproliferation
DOE Needs to Address Uncertainties with and Strengthen Independent Safety Oversight of Its Plutonium Disposition Program Gao ID: GAO-10-378 March 26, 2010The end of the Cold War left the United States with a surplus of weapons-grade plutonium, which poses proliferation and safety risks. Much of this material is found in a key nuclear weapon component known as a pit. The Department of Energy (DOE) plans to dispose of at least 34 metric tons of plutonium by fabricating it into mixed oxide (MOX) fuel for domestic nuclear reactors. To do so, DOE's National Nuclear Security Administration (NNSA) is constructing two facilities--a MOX Fuel Fabrication Facility (MFFF) and a Waste Solidification Building (WSB)--at the Savannah River Site in South Carolina. GAO was asked to assess the (1) cost and schedule status of the MFFF and WSB construction projects, (2) status of NNSA's plans for pit disassembly and conversion, (3) status of NNSA's plans to obtain customers for MOX fuel from the MFFF, and (4) actions that the Nuclear Regulatory Commission (NRC) and DOE have taken to provide independent nuclear safety oversight. GAO reviewed NNSA documents and project data, toured DOE facilities, and interviewed officials from DOE, NRC, and nuclear utilities.
The MFFF and WSB projects both appear to be meeting their cost targets for construction, but the MFFF project has experienced schedule delays. Specifically, the MFFF and WSB projects are on track to meet their respective construction cost estimates of $4.9 billion and $344 million. However, the MFFF project has experienced some delays over the past 2 years, due in part to the delivery of reinforcing bars that did not meet nuclear quality standards. Project officials said that they expect to recover from these delays by the end of 2010 and plan for the start of MFFF operations on schedule in 2016. The WSB project appears to be on schedule. NNSA is reconsidering its alternatives for establishing a pit disassembly and conversion capability. However, it seems unlikely that NNSA will be able to establish this capability in time to produce the plutonium feedstock needed to operate the MFFF, due to the amount of time and effort needed to reconsider alternatives and construct a facility as well as the amount of uncertainty associated with NNSA's current plans. NNSA had previously planned to build a stand-alone facility near the MFFF construction site to disassemble pits and convert the plutonium into a form suitable for use by the MFFF. However, NNSA is now considering a plan to combine this capability with another project at an existing facility at the Savannah River Site. NNSA officials could not estimate when the agency will reach a final decision or establish more definitive cost and schedule estimates for the project. However, NNSA's new alternative depends on an aggressive, potentially unrealistic schedule. In addition, NNSA has not sufficiently planned for the maturation of critical technologies to be used in pit disassembly and conversion operations, some of which are being tested at the Los Alamos National Laboratory in New Mexico. NNSA has one potential customer for most of its MOX fuel, but outreach to other utilities may be insufficient. NNSA is in discussions with the Tennessee Valley Authority to provide MOX fuel for five reactors. NNSA plans to offer several incentives to potential customers, including offering to sell MOX fuel at a discount relative to the price of uranium fuel. In interviews with the nation's nuclear utilities, GAO found that while many of the utilities expressed interest in NNSA's proposed incentives, the majority of utilities also expressed little interest in becoming MOX fuel customers. This suggests that NNSA's outreach to utilities may not be sufficient. NRC is currently reviewing the MFFF's license application and has identified several issues related to construction. However, oversight of the MFFF and the WSB by DOE's independent nuclear safety entities has been limited. For example, DOE's Office of Health, Safety, and Security has not conducted any oversight activities or participated in any project reviews of the WSB, despite the WSB's status as a high-hazard nuclear facility. In addition, NNSA's Chief of Defense Nuclear Safety has not conducted any nuclear safety oversight activities for the MFFF project and has not conducted all oversight activities for the WSB project that are required by DOE order.
RecommendationsOur recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director: Team: Phone:GAO-10-378, Nuclear Nonproliferation: DOE Needs to Address Uncertainties with and Strengthen Independent Safety Oversight of Its Plutonium Disposition Program
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United States Government Accountability Office:
GAO:
Report to the Subcommittee on Energy and Water Development, Committee
on Appropriations, House of Representatives:
March 2010:
Nuclear Nonproliferation:
DOE Needs to Address Uncertainties with and Strengthen Independent
Safety Oversight of Its Plutonium Disposition Program:
GAO-10-378:
GAO Highlights:
Highlights of GA0-10-378, a report to the Subcommittee on Energy and
Water Development, Committee on Appropriations, House of
Representatives.
Why GAO Did This Study:
The end of the Cold War left the United States with a surplus of
weapons-grade plutonium, which poses proliferation and safety risks.
Much of this material is found in a key nuclear weapon component known
as a pit. The Department of Energy (DOE) plans to dispose of at least
34 metric tons of plutonium by fabricating it into mixed oxide (MOX)
fuel for domestic nuclear reactors. To do so, DOE's National Nuclear
Security Administration (NNSA) is constructing two facilities”a MOX
Fuel Fabrication Facility (MF1410 and a Waste Solidification Building
(WSB)”at the Savannah River Site in South Carolina. GAO was asked to
assess the (1) cost and schedule status of the MFFF and WSB
construction projects, (2) status of NNSA's plans for pit disassembly
and conversion, (3) status of NNSA's plans to obtain customers for MOX
fuel from the MFFF, and (4) actions that the Nuclear Regulatory
Commission (NRC) and DOE have taken to provide independent nuclear
safety oversight. GAO reviewed NNSA documents and project data, toured
DOE facilities, and interviewed officials from DOE, NRC, and nuclear
utilities.
What GAO Found:
The MFFF and WSB projects both appear to be meeting their cost targets
for construction, but the MFFF project has experienced schedule
delays. Specifically, the MFFF and WSB projects are on track to meet
their respective construction cost estimates of $4.9 billion and $344
million. However, the MFFF project has experienced some delays over
the past 2 years, due in part to the delivery of reinforcing bars that
did not meet nuclear quality standards. Project officials said that
they expect to recover from these delays by the end of 2010 and plan
for the start of MFFF operations on schedule in 2016. The WSB project
appears to be on schedule.
NNSA is reconsidering its alternatives for establishing a pit
disassembly and conversion capability. However, it seems unlikely that
NNSA will be able to establish this capability in time to produce the
plutonium feedstock needed to operate the MFFF, due to the amount of
time and effort needed to reconsider alternatives and construct a
facility as well as the amount of uncertainty associated with NNSA's
current plans. NNSA had previously planned to build a stand-alone
facility near the MFFF construction site to disassemble pits and
convert the plutonium into a form suitable for use by the MFFF.
However, NNSA is now considering a plan to combine this capability
with another project at an existing facility at the Savannah River
Site. NNSA officials could not estimate when the agency will reach a
final decision or establish more definitive cost and schedule
estimates for the project. However, NNSA's new alternative depends on
an aggressive, potentially unrealistic schedule. In addition, NNSA has
not sufficiently planned for the maturation of critical technologies
to be used in pit disassembly and conversion operations, some of which
are being tested at the Los Alamos National Laboratory in New Mexico.
NNSA has one potential customer for most of its MOX fuel, but outreach
to other utilities may be insufficient. NNSA is in discussions with
the Tennessee Valley Authority to provide MOX fuel for five reactors.
NNSA plans to offer several incentives to potential customers,
including offering to sell MOX fuel at a discount relative to the
price of uranium fuel. In interviews with the nation's nuclear
utilities, GAO found that while many of the utilities expressed
interest in NNSA's proposed incentives, the majority of utilities also
expressed little interest in becoming MOX fuel customers. This
suggests that NNSA's outreach to utilities may not be sufficient.
NRC is currently reviewing the MFFF's license application and has
identified several issues related to construction. However, oversight
of the MFFF and the WSB by DOE's independent nuclear safety entities
has been limited. For example, DOE's Office of Health, Safety, and
Security has not conducted any oversight activities or participated in
any project reviews of the WSB, despite the WSB's status as a high-
hazard nuclear facility. In addition, NNSA's Chief of Defense Nuclear
Safety has not conducted any nuclear safety oversight activities for
the MFFF project and has not conducted all oversight activities for
the WSB project that are required by DOE order.
What GAO Recommends:
GAO recommends, among other things, that NNSA improve its plans for
the maturation of critical technologies related to pit disassembly and
conduct additional outreach to potential MOX fuel customers. hi
commenting on a draft of this report, DOE agreed with GAO's
recommendations.
View [hyperlink, http://www.gao.gov/products/GA0-10-378] or key
components. For more information, contact Gene Aloise at (202) 512-
3841 or aloisee@ gao.gov.
[End of section]
Contents:
Letter:
Background:
Construction Projects Appear to Be Meeting Cost Targets, but the MFFF
Has Had Schedule Delays:
NNSA Is Reconsidering Alternatives for Its Pit Disassembly Mission
That Could Delay Production of Material Needed for the MFFF:
NNSA Has One Potential Customer for Most of Its MOX Fuel, but Outreach
to Others May Be Insufficient:
NRC Has Been Providing Oversight for the MFFF, but DOE's Independent
Oversight of the MFFF and the WSB Has Been Limited:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Scope and Methodology:
Appendix II: Extent to Which the MFFF Project's Schedule Used Key
Practices:
Appendix III: Extent to Which the WSB Project's Schedule Used Key
Practices:
Appendix IV: Summary Results of Interviews with 22 Utilities:
Appendix V: Nuclear Regulatory Commission's Notices of Violation for
the MFFF:
Appendix VI: Comments from the Department of Energy:
Appendix VII: Comments from the Nuclear Regulatory Commission:
Appendix VIII: GAO Contact and Staff Acknowledgments:
Tables:
Table 1: Technology Assessments of Critical Pit Disassembly and
Conversion Technologies Conducted in 2008 and 2009:
Table 2: Factors Affecting a Utility's Interest in the MOX Fuel
Program:
Table 3: Number of Utilities Indicating Increased Interest in the MOX
Fuel Program Due to Possible Incentives:
Table 4: Status of NRC's Review of the MFFF's Operating License as of
January 2010:
Figures:
Figure 1: Cumulative Cost and Schedule Variances for MFFF over a 2-
Year Period (2007-2009):
Figure 2: Cumulative Cost and Schedule Variances for the WSB, January
through November, 2009:
Figure 3: The MFFF Planned Production Schedule for MOX Fuel Assemblies:
Abbreviations:
ARIES: Advanced Recovery and Integrated Extraction System:
CDNS: Chief of Defense Nuclear Safety:
DOE: Department of Energy:
EVM: earned value management:
HSS: Office of Health, Safety, and Security:
LANL: Los Alamos National Laboratory:
MFFF: Mixed Oxide Fuel Fabrication Facility:
MOX: mixed oxide:
NNSA: National Nuclear Security Administration:
OECM: Office of Engineering and Construction Management:
NRC: Nuclear Regulatory Commission:
PDCF: Pit Disassembly and Conversion Facility:
SRS: Savannah River Site:
TRL: technology readiness level:
TVA: Tennessee Valley Authority:
WSB: Waste Solidification Building:
[End of section]
United States Government Accountability Office:
Washington, DC 20548:
March 26, 2010:
The Honorable Peter J. Visclosky:
Chairman:
The Honorable Rodney P. Frelinghuysen:
Ranking Member:
Subcommittee on Energy and Water Development:
Committee on Appropriations:
House of Representatives:
The end of the Cold War left a legacy of fissile material that the
United States no longer required for national security. This fissile
material includes large quantities of weapons-grade plutonium, such as
the plutonium used in the pit of a nuclear warhead.[Footnote 1]
Plutonium is a man-made, radioactive element that poses a danger of
nuclear weapons proliferation and a risk of environmental, safety, and
health consequences. For example, internal exposure in humans to
plutonium through inhalation or consumption poses an extremely serious
health hazard by exposing organs and tissues to ionizing radiation and
increasing the risk of cancer.
In 1997, the Department of Energy (DOE) established a program to
provide for the disposition of surplus, weapons-grade plutonium.
[Footnote 2] The National Nuclear Security Administration (NNSA), a
separately organized agency within DOE, manages this program, now
called the U.S. Plutonium Disposition program. NNSA's goal is to
dispose of at least 34 metric tons of surplus, weapons-grade plutonium
by (1) combining it with uranium to produce mixed oxide (MOX) fuel and
(2) selling the MOX fuel to domestic utilities that own nuclear
reactors. Once the MOX fuel is irradiated in a nuclear reactor, it
would be rendered useless to potential proliferators. According to
NNSA officials, the sale of MOX fuel over a 15-year period could
return over $1 billion to the U.S. Treasury. To achieve this goal,
NNSA is currently constructing the following two facilities at the
Savannah River Site (SRS) in South Carolina:
* MOX Fuel Fabrication Facility (MFFF)”The MFFF is projected to use up
to 3.5 metric tons of plutonium a year to fabricate about 1,700 MOX
fuel assemblies over a 15-year period. NNSA began construction on the
MFFF in August 2007. As we reported in March 2007, NNSA initially
estimated that the MFFF would cost about $1.4 billion and be completed
by September 2004.[Footnote 3] NNSA currently projects that the MFFF
will cost about $4.9 billion, be ready for operations by October 2016,
and begin producing MOX fuel assemblies in 2018.
* A Waste Solidification Building (WSB) will process radioactive waste
from the MFFF and related facilities. NNSA began construction on the
WSB in December 2008, and it is projected to cost $344 million and to
be ready for operations by September 2013.
In addition, because NNSA expects to obtain the majority of the
plutonium from nuclear pits, it also plans to build a facility at SRS
to disassemble pits and convert the plutonium into a plutonium oxide
form suitable for use in MOX fuel.
Several entities oversee nuclear safety for the Plutonium Disposition
program. The National Defense Authorization Act of 1999 amended the
Energy Reorganization Act of 1974 to require the Nuclear Regulatory
Commission (NRC), an independent oversight agency, to regulate and
license the operation of the MFFF. DOE is responsible for regulating
the nuclear safety of the WSB and the planned Pit Disassembly and
Conversion Facility (PDCF), with NNSA taking the primary role. Several
other DOE offices and entities provide independent nuclear safety
oversight for all three facilities, including the DOE Office of
Health, Safety, and Security (HSS); the NNSA Central Technical
Authority; and the NNSA Chief of Defense Nuclear Safety (CDNS).
This report assesses (1) the performance status of the MFFF and WSB
construction projects with respect to cost and schedule, (2) the
status of NNSA's plans to establish a pit disassembly and conversion
capability to supply plutonium to the MFFF, (3) the status of NNSA's
plans to obtain customers for MOX fuel from the MFFF, and (4) the
actions that NRC and DOE have taken to provide independent nuclear
safety oversight of the MFFF and WSB construction projects.
To assess the performance status of the MFFF and WSB construction
projects with respect to cost and schedule, we reviewed earned value
management (EVM) data and assessed the reliability of EVM data by
evaluating each project's schedule against GAO's scheduling best
practices.[Footnote 4] We also interviewed key NNSA and contractor
officials and reviewed data and key processes used to conduct a risk
analysis of the MFFF project's schedule. To assess the status of
NNSA's plans to establish a pit disassembly and conversion capability
to supply plutonium to the MFFF, we reviewed documentation provided by
NNSA and its contractors for the MFFF, WSB, and PDCF projects,
including project execution plans, project status reports, EVM data,
and independent project reviews. We also reviewed project plans and
research and development data related to the Advanced Recovery and
Integrated Extraction System (ARIES) project at DOE's Los Alamos
National Laboratory (LANL) in New Mexico; toured site facilities at
SRS and LANL; and interviewed DOE, NNSA, and contractor officials. To
assess the status of NNSA's plans to obtain customers for MOX fuel
from the MFFF, we reviewed documentation provided by NNSA and its
contractors, including project plans, studies, and MOX fuel production
schedules. We also interviewed NNSA and contractor officials. In
addition, we analyzed responses to structured interviews we
administered to U.S. utilities that own nuclear reactors. We received
data from utility officials representing 22 of the 26 utilities, for a
response rate of 85 percent. Finally, to assess the actions that NRC
and DOE have taken to provide independent nuclear safety oversight of
the MFFF and WSB construction projects, we reviewed NRC and DOE
regulations related to nuclear safety, NRC inspection reports, and DOE
independent review reports. We also spoke with officials in NRC's
Office of Nuclear Materials Safety and Safeguards and the Division of
Construction Projects; NNSA's program offices responsible for the MFFF
and WSB projects; the CDNS; DOE's HSS; and the Defense Nuclear
Facilities Safety Board to discuss their oversight roles and
activities in relation to the MFFF and the WSB. Appendix I contains
additional information on our scope and methodology.
We conducted this performance audit from March 2009 to March 2010, in
accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe
that the evidence obtained provides a reasonable basis for our
findings and conclusions based on our audit objectives.
Background:
A number of events are important in the history of DOE's U.S.
Plutonium Disposition program.
* In 1994, the United States declared 38.2 metric tons of weapons-
grade plutonium as surplus to national security needs.
* In 1997, DOE announced a plan to dispose of surplus, weapons-grade
plutonium through the following dual approach: (1) conversion into MOX
fuel and (2) immobilization in glass or ceramic material. According to
DOE, its approach would require the construction of three facilities”a
pit disassembly and conversion facility, a MOX fuel fabrication
facility, and an immobilization facility.
* In 2000, the United States and Russia entered into a Plutonium
Management and Disposition Agreement, in which each country pledged to
dispose of at least 34 metric tons of surplus, weapons-grade
plutonium, including the disposition of no less than 2 metric tons of
plutonium per year.
* In 2000, DOE announced in a record of decision that it would
construct a pit disassembly and conversion facility, a MOX fuel
fabrication facility, and an immobilization facility at SRS.
* In 2002, NNSA canceled the immobilization portion of its surplus
plutonium disposition strategy due to budgetary constraints. In
addition, according to NNSA officials, NNSA canceled the
immobilization portion because (1) Russia would not dispose of its
plutonium if the United States adopted an immobilization-only approach
and (2) the technology for MOX fuel fabrication had been in use in
Europe for three decades, whereas immobilization of weapons-grade
plutonium in glass or ceramic had never before been demonstrated.
* In 2003, NNSA announced that it was pursuing a MOX-only plutonium
disposition program to dispose of 34 metric tons of surplus, weapons-
grade plutonium.
The majority of the 34 metric tons of surplus, weapons-grade plutonium
is in the form of pits, clean metal, and oxides.[Footnote 5] The
remainder is in nonpit forms, such as contaminated metal, oxides, and
residues from the nuclear weapons production process. While NNSA plans
to build a pit disassembly and conversion facility to obtain plutonium
from pits, it also plans to use the ARIES project”a technology
development and demonstration project for pit disassembly and
conversion located at LANL”to obtain a small amount of plutonium from
pits. In addition, according to NNSA documents, NNSA plans to obtain
plutonium from nonpit forms in two ways. First, the K-Area Facility at
SRS is storing 4.1 metric tons of plutonium in nonpit form that is
already suitable for use by the MFFF.[Footnote 6] Second, NNSA plans
to prepare and process additional quantities of plutonium (3.7 metric
tons) already at the K-Area Facility or planned for storage at the
facility.
Prior work by GAO has identified persistent problems with cost
overruns and schedule delays on the PDCF project. For example, in our
March 2007 report on major DOE construction projects, we found that
ineffective DOE project oversight, poor contractor management, and
external factors were among the primary reasons for the cost increases
and schedule delays associated with the PDCF project.[Footnote 7] In
addition, according to a May 2005 DOE Inspector General report, NNSA
officials attributed schedule delays for the PDCF to the disagreement
between the United States and Russia about liability for work
performed by U.S. contractor personnel working in Russia and a change
in funding priorities.[Footnote 8]
NNSA project directors are responsible for managing the MFFF, WSB, and
PDCF projects and overseeing the contractors that design and construct
these facilities. In doing so, project directors follow specific DOE
directives, policies, and guidance for project management. Among these
is DOE Order 413.3A, which establishes protocols for planning and
executing a project. The protocols require DOE projects to go through
a series of five critical decisions as they enter each new phase of
work. These decisions are as follows:
* Critical decision 0, which approves a mission-related need.
* Critical decision 1, which approves the selection of a preferred
solution to meet a mission need and a preliminary estimate of project
costs”an approval that is based on a review of a project's conceptual
design.
* Critical decision 2, which approves that a project's cost and
schedule estimates are accurate and complete”an approval that is based
on a review of the project's completed preliminary design.
* Critical decision 3, which reaches agreement that a project's final
design is sufficiently complete and that resources can be committed
toward procurement and construction.
* Critical decision 4, which approves that a project has met its
performance criteria for completion or that the facility is ready to
start operations.
To oversee projects and approve these critical decisions, DOE conducts
its own reviews, often with the help of independent technical experts.
For example, for large projects (with a total project cost of greater
than $100 million), DOE's Office of Engineering and Construction
Management (OECM) validates the accuracy and completeness of the
project's performance baseline as part of the critical decision 2
process.
DOE Order 413.3A also requires projects to use EVM to measure and
report the progress of construction projects (with a total project
cost of greater than or equal to $20 million). EVM measures the value
of work accomplished in a given period and compares it with the
planned value of work scheduled for that period and with the actual
cost of work accomplished. Differences in these values are measured in
both cost and schedule variances. EVM provides information that is
necessary for understanding the health of a program and provides an
objective view of program status. As a result, EVM can alert program
managers to potential problems sooner than expenditures alone can,
thereby reducing the chance and magnitude of cost overruns and
schedule delays.
The following DOE offices and entities provide independent nuclear
safety oversight:
* HSS is responsible for policy development, independent oversight,
enforcement, and assistance in the areas of health, safety, the
environment, and security across DOE. Among its functions are periodic
appraisals of the environmental, safety, and health programs at DOE
sites, including evaluation of a sample of high-hazard nuclear
facility at these sites to determine whether the program offices and
their contractors are complying with DOE policies.[Footnote 9]
* The NNSA Central Technical Authority is responsible for maintaining
operational awareness of nuclear safety on NNSA projects, especially
with respect to complex, high-hazard nuclear operations, and ensuring
that DOE's nuclear safety policies and requirements are implemented
adequately and properly.
* The CDNS is responsible for evaluating nuclear safety issues and
providing expert advice to the Central Technical Authority and other
senior NNSA officials. In particular, the CDNS is responsible for (1)
validating that efforts to integrate safety into a project's design
include the use of a system engineering approach, (2) determining that
nuclear facilities have incorporated the concept of defense-in-depth
into the facility design process, and (3) validating that federal
personnel assigned to an integrated project team as nuclear safety
experts are appropriately qualified.
Finally, DOE considers assessments and recommendations from external
organizations, most prominently the Defense Nuclear Facilities Safety
Board”an independent, external organization that reviews nuclear
safety issues at DOE defense facilities and makes nonbinding
recommendations to DOE.
Construction Projects Appear to Be Meeting Cost Targets, but the MFFF
Has Had Schedule Delays:
The MFFF and WSB construction projects both appear to be meeting their
cost targets, but the MFFF project has experienced some delays over
the past 2 years. In accordance with DOE project management
requirements, both projects are using EVM to measure and report
progress against their established cost and schedule estimates (also
known as performance baselines) for construction. EVM provides a
proven means for measuring such progress and thereby identifying
potential cost overruns and schedule delays early, when their impact
can be minimized. Differences from the performance baseline are
measured in both cost and schedule variances.[Footnote 10] Positive
variances indicate that activities are costing less or are completed
ahead of schedule. Negative variances indicate that activities are
costing more or are falling behind schedule. These cost and schedule
variances can then be used in estimating the cost and time needed to
complete the project.
Figure 1 presents information on both cumulative cost and schedule
variances for the MFFF project over the 2-year period ending November
2009. With respect to cost, the MFFF project has experienced
fluctuating variances during this period. Overall, these cost
variances are relatively small compared with the project's average
monthly expenditures of over $20 million. In addition, it is normal
for variances to fluctuate during the course of a project.
Figure 1: Cumulative Cost and Schedule Variances for MFFF over a 2-
Year Period (2007-2009):
[Refer to PDF for image: multiple line graph]
Month: September 2007;
Cost Variance: -$2.9 million;
Schedule Variance: -$2.9 million.
Month: October 2007;
Cost Variance: -$2.3 million;
Schedule Variance: $1.4 million.
Month: November 2007;
Cost Variance: -$4.1 million;
Schedule Variance: -$2.6 million.
Month: December 2007;
Cost Variance: -$3.5 million;
Schedule Variance: -$2.1 million.
Month: January 2008;
Cost Variance: -$3.6 million;
Schedule Variance: -$4.7 million.
Month: February 2008;
Cost Variance: -$2.3 million;
Schedule Variance: -$7.8 million.
Month: March 2008;
Cost Variance: -$3.9 million;
Schedule Variance: -$13.4 million.
Month: April 2008;
Cost Variance: -$4.5 million;
Schedule Variance: -$17.1 million.
Month: May 2008;
Cost Variance: -$6.1 million;
Schedule Variance: -$25.3 million.
Month: June 2008;
Cost Variance: -$7.9 million;
Schedule Variance: -$20.6 million.
Month: July 2008;
Cost Variance: -$4.4 million;
Schedule Variance: -$19.3 million.
Month: August 2008;
Cost Variance: -$2.2 million;
Schedule Variance: -$27.2 million.
Month: September 2008;
Cost Variance: -$5 million;
Schedule Variance: -$30.8 million.
Month: October 2008;
Cost Variance: -$6 million;
Schedule Variance: -$30.4 million.
Month: November 2008;
Cost Variance: -$7.3 million;
Schedule Variance: -$34.1 million.
Month: December 2008;
Cost Variance: -$4 million;
Schedule Variance: -$36.1v.
Month: January 2009;
Cost Variance: -$1.5 million;
Schedule Variance: -$37.7 million.
Month: February 2009;
Cost Variance: -$0.9 million;
Schedule Variance: -$38.2 million.
Month: March 2009;
Cost Variance: $1.6 million;
Schedule Variance: -$35 million.
Month: April 2009;
Cost Variance: $2.1 million;
Schedule Variance: -$33.5 million.
Month: May 2009;
Cost Variance: -$2.1 million;
Schedule Variance: -$37.9 million.
Month: June 2009;
Cost Variance: -$0.3 million;
Schedule Variance: -$39.5 million.
Month: July 2009v
Cost Variance: -$0.5 million;
Schedule Variance: -$32.8 million.
Month: August 2009;
Cost Variance: -$2.6 million;
Schedule Variance: -$25.5 million.
Month: September 2009;
Cost Variance: -$4 million;
Schedule Variance: -$24.9 million.
Month: October 2009;
Cost Variance: -$5.4 million;
Schedule Variance: -$30.9 million.
Month: November 2009;
Cost Variance: -$10.6 million;
Schedule Variance: -$27.6 million.
Source: Shaw AREVA MOX Services, LLC.
[End of figure]
However, with respect to the project's schedule, the MFFF project has
experienced consistently negative variances for most of the past 2
years. Specifically, as shown in figure 1, these schedule variances
were consistently negative for most of 2008, and, for much of 2009,
the project had not completed almost $40 million in scheduled work.
According to the data and project officials, delays during 2008 were
due primarily to the delivery of reinforcing bars that did not meet
nuclear quality standards. Specifically, in February 2008, NRC
inspectors identified numerous pieces of reinforcing bars”steel rods
that are used in reinforced concrete”that did not meet industry
standards for nuclear facilities. At that point, NNSA's contractor,
Shaw AREVA MOX Services, LLC (MOX Services), had accepted delivery of
about 10,000 tons of reinforcing bars on-site and had installed almost
4,000 tons. Although NRC and MOX Services officials determined that
the error did not affect the safety of reinforcing bars already
installed, this issue had a major effect on the overall schedule for
pouring concrete and installing reinforcing bars in the structure
during 2008. According to project officials, the project switched to a
different supplier of reinforcing bars in September 2008 and by April
2009 had a sufficient supply of material to support the construction
schedule.
Schedule delays in 2009 occurred primarily because project officials
decided that they had not allocated sufficient time in the existing
schedule to ensure the delivery of materials that would meet the
stringent safety and design standards for nuclear facilities. For
example, according to project officials, the project extended the
amount of time needed to produce concrete for the MFFF to provide
additional assurance that the concrete will meet nuclear quality
standards. The rate of concrete production will be gradually increased
beginning in early 2010, according to project officials. In addition,
the project extended the amount of time needed to fabricate and
deliver slab tanks, which are used to hold liquid fissile material, to
provide additional assurance that these tanks meet stringent safety
and design standards.
In recent months, the MFFF project has improved its schedule
performance, so that it faced roughly $25 million in uncompleted work
by November 2009, compared with almost $40 million in uncompleted work
earlier in the year. According to project officials, this amount of
negative schedule variance is equivalent to about 2 to 3 week's worth
of work on the project, and they expect to recover from this variance
during 2010. In comparison, these officials stated that the project's
schedule includes 16 month's worth of contingency to mitigate any
risks from additional delays before the expected start of MFFF
operations.
Figure 2 presents information on both cumulative cost and schedule
variances for the WSB project over a 11-month period ending in
November 2009. With respect to cost, the WSB project has experienced
consistently positive cost variances. However, schedule variances have
been consistently negative over the same period. By November 2009, the
project had not completed over $4 million worth of scheduled work,
compared with average monthly expenditures of roughly $2 million
during fiscal year 2009. According to the NNSA federal project
director, the schedule variances are due to a variety of factors,
including delays in the procurement of cementation equipment and in
the installation of piping due to inclement weather. However, the
official said that he expects the project to recover from these
delays, and that none of these factors will affect the overall
construction schedule for the project.
Figure 2: Cumulative Cost and Schedule Variances for the WSB, January
through November, 2009:
[Refer to PDF for image: multiple line graph]
Month: January 2009;
Cost variance: $1.8 million;
Schedule variance: -$0.1 million.
Month: February 2009;
Cost variance: $2.0 million;
Schedule variance: -$0.4 million.
Month: March 2009;
Cost variance: $2.4 million;
Schedule variance: -$1.5 million.
Month: April 2009;
Cost variance: $2.6 million;
Schedule variance: -$2.7 million.
Month: May 2009;
Cost variance: $4.0 million;
Schedule variance: -$2.7 million.
Month: June 3009;
Cost variance: $2.9 million;
Schedule variance: -$2.6 million.
Month: July 2009;
Cost variance: $4.0 million;
Schedule variance: -$3.2 million.
Month: August 2009;
Cost variance: $5.5 million;
Schedule variance: -$3.0 million.
Month: September 2009;
Cost variance: $4.5 million;
Schedule variance: -$4.8 million.
Month: October 2009;
Cost variance: $4.4 million;
Schedule variance: -$5.9 million.
Month: November 2009;
Cost variance: $4.4 million;
Schedule variance: -$4.6 million.
Source: NNSA.
[End of figure]
The reliability of a project's EVM system depends in large part on the
reliability of its underlying schedule. A reliable schedule specifies
when the project's work activities will occur, how long they will
take, and how they relate to one another. We have previously
identified nine key practices necessary for developing a reliable
schedule.[Footnote 11] In a March 2009 testimony before this
subcommittee, we identified several instances in which the MFFF
project's schedule did not adhere to these practices.[Footnote 12] In
particular, we found that MFFF project staff had not conducted a risk
analysis on their current schedule.
However, since our March 2009 testimony, MFFF project officials have
taken a number of steps to address our concerns. For example, project
officials conducted a risk analysis of the MFFF project schedule in
the summer of 2009 and used the results to update their risk
management plan. In addition, project officials stated that they have
significantly reduced the number of scheduled activities with long
durations”that is, activities with start-to-finish durations of over
200 days.[Footnote 13] On the basis of these actions, we reevaluated
the MFFF project's schedule against the nine key scheduling practices.
We also evaluated the WSB project's schedule against these same
practices. We found that both projects met most of the key practices
to a satisfactory degree. For example, one key practice is to plan the
schedule so that it can meet critical project dates. To do so, project
officials must logically sequence all planned activities in the order
that they are to be carried out. In particular, project officials must
identify both predecessor activities”which must finish prior to the
start of another activity”as well as successor activities”which cannot
begin until other activities are completed. We found that the MFFF
project had logically sequenced all scheduled activities, while the
WSB project had logically sequenced the vast majority of its scheduled
activities. For the complete results of our analysis of the projects'
schedules, see appendixes II and III.
NNSA Is Reconsidering Alternatives for Its Pit Disassembly Mission
That Could Delay Production of Material Needed for the MFFF:
NNSA recently announced that it is considering a new alternative for
its pit disassembly and conversion mission. However, due to the amount
of time and effort needed to reconsider alternatives and construct a
facility, as well as the amount of uncertainty associated with the
agency's new alternative, it seems unlikely that NNSA will be able to
establish this capability in time to produce the plutonium oxide
feedstock needed to operate the MFFF. As result of the likely delay in
establishing a pit disassembly and conversion capability, NNSA may
need to expand the ARIES project at LANL to provide additional interim
plutonium feedstock to the MFFF. However, NNSA has not sufficiently
planned for such a contingency. In addition, NNSA has not sufficiently
planned for the maturation of critical technologies to be used in pit
disassembly and conversion operations.
NNSA Recently Announced a New Alternative for Pit Disassembly, but the
Alternative Depends on an Aggressive, Potentially Unrealistic Schedule:
In 1997, DOE decided to establish a pit disassembly and conversion
capability as part of its strategy for plutonium disposition. Because
about two-thirds of the plutonium slated for disposition is contained
in nuclear weapon pit form, the ability to disassemble pits is
critical to the success of the program. In 2000, DOE decided to
construct and operate a PDCF at SRS. Through 2009, NNSA's strategy has
been to design and construct the PDCF as a new, stand-alone facility
on a site adjacent to the current construction site of the MFFF. While
NNSA has never established a definitive cost and schedule estimate for
the PDCF project, a 2009 NNSA report estimated that the PDCF would
cost $3.65 billion to construct and be operational by April 2021.
[Footnote 14]
However, DOE recently proposed a new alternative for establishing a
pit disassembly and conversion capability at SRS. In September 2008,
DOE authorized a study to review alternatives to the siting location
of the PDCF capability within existing facilities at SRS and, as a
result, to potentially improve its approach to disposition of surplus
plutonium at SRS. Specifically, the study looked at the feasibility of
combining the capabilities of the PDCF project with the Plutonium
Preparation project, another project at SRS being managed by DOE's
Office of Environmental Management. The purpose of the Plutonium
Preparation project, as approved by DOE in June 2008, was to prepare
for disposition of up to 13 metric tons of surplus, nonpit, plutonium-
bearing materials that are either at the SRS K-Area Facility or
planned for storage at the facility. According to DOE's plans, the
project would be installed in the K-Area Facility and would prepare
the plutonium-bearing materials for disposition via two pathways: (1)
converting some of the materials into plutonium oxide feedstock for
the MFFF and (2) immobilizing the rest of the materials with high-
level waste in glass using the Defense Waste Processing Facility at
SRS. According to DOE's 2008 preliminary estimate, this project would
be operational in the 2013-2014 time frame at a cost of $340 million
to $540 million.
In November 2008,[Footnote 15] DOE issued a report stating that it
would be feasible to combine the two projects at the K-Area Facility.
According to NNSA's preliminary estimates, the combined project would
cost about $3.65 billion and would be constructed in two phases. The
first phase would include the design and installation of equipment in
one area of the K-Area Facility to provide the capability (formerly
associated with the Plutonium Preparation project) to process 3.7
metric tons of surplus, nonpit plutonium, which would be used as an
early source of plutonium oxide feedstock to the MFFF. The second
phase would include the modification of a different area within the
facility and the design and installation of equipment to provide the
pit disassembly and conversion capability.[Footnote 16] In December
2008, NNSA suspended many of the activities associated with the PDCF
project while it performed additional analyses, and DOE suspended
activities associated with the Plutonium Preparation project. Finally,
in November 2009, DOE approved the "pursuing" of the combined project
approach, noting several potential benefits, such as greater funding
flexibility, greater flexibility regarding DOE's secure transportation
system, the avoidance of expenditures associated with constructing a
new facility, and the avoidance of costs associated with
decontaminating and decommissioning two Category 1 nuclear facilities,
among others.
However, it appears unlikely that NNSA will be able to establish a pit
disassembly and conversion capability in time to produce the plutonium
feedstock needed to operate the MFFF beginning in 2021, due to the
amount of time and effort needed to reconsider alternatives and
construct a facility as well as the amount of uncertainty associated
with the agency's new proposal. First, according to NNSA officials,
they do not expect to make a decision in the near future on which
approach”either the PDCF as a stand-alone facility or the K-Area
Facility combination project”they will ultimately approve.
Specifically, officials told us that prior to making any decision,
NNSA must first select its preferred alternative as part of the DOE
critical decision 1 process. To prepare for critical decision 1, NNSA
will need to develop and manage numerous details, including (1) the
appropriate review and documentation pursuant to the National
Environmental Policy Act; (2) a transfer by the Secretary of Energy
from the Office of Environmental Management to NNSA of the necessary
materials, functions, and facilities to carry out the preferred
alternative; and (3) issues related to federal and contractor program
management, contract management, project management, and
budget/financial management. As a result, NNSA officials said that
they are still developing plans and schedules for the combination
project and cannot provide any specific project schedule dates at this
time. In addition, they stated that once NNSA makes a final decision
on its strategy for pit disassembly and conversion as part of the
critical decision 1 process, it will take several additional years to
develop definitive cost and schedule estimates for its final approach
as part of the critical decision 2 process.
Second, a number of issues with NNSA's new proposal raise doubts
regarding whether the agency will be able to construct a facility in
time to provide the plutonium feedstock necessary to operate the MFFF.
For example:
* According to NNSA documents, the K-Area Facility combined project
will require an aggressive, near-term acquisition strategy and project
development effort to design, construct, and start a pit disassembly
and conversion capability under the current time constraints. Phase 1
of the project is scheduled to be operational by 2014 to provide an
early source of feedstock (from nonpit plutonium sources) to the MFFF,
and phase 2 must be operational by 2021 to provide the bulk of the
plutonium oxide feedstock that the MFFF will require to meet its
planned production schedule.
* According to NNSA documents, the existing schedule for the K-Area
Facility combined project is at an early stage of development and
lacks any quantified schedule contingency.
* The project will require construction within an existing, secure,
operating facility. Specifically, the project will need to excavate
material from existing walls and floors in numerous locations to
install piping and utilities, among other things. According to NNSA,
during these excavations, the project may encounter conditions that
have not been documented in existing design drawings for the K-Area
Facility. Construction of a new facility, the original plan for the
PDCF project, carries fewer risks of encountering unknown conditions”
such as undocumented electrical wiring or other physical interfaces.
* The project will require substantial coordination between NNSA and
the Office of Environmental Management, as well as various contractor
organizations, to address competing missions and out-year issues. As a
result, according to NNSA, DOE may require additional federal
resources and interface agreements between its various offices to
ensure the proper integration and execution of the project.
NNSA Has Not Sufficiently Planned for an Expansion of the ARIES
Project If Pit Disassembly Operations Are Delayed:
NNSA's new alternative assumes that the K-Area Facility combined
project will become operational by the 6th year of MFFF operations
(2021). However, if the design and construction of the project are
delayed, NNSA may have to rely on the ARIES project at LANL to provide
additional plutonium oxide feedstock for the MFFF. The ARIES project
includes (1) laboratory facility preparation activities, (2) the
acquisition of gloveboxes,[Footnote 17] (3) the design and assembly of
a control system to operate the demonstration modules, (4) the
preparation of all system documentation requirements, (5) the
demonstration of the disassembly and conversion of all types of
surplus nuclear weapon pits, (6) material control and accountability,
and (7) measurements of personnel radiation exposure from all surplus
pit types. LANL conducts activities associated with the ARIES project
at its Plutonium Facility 4 building, which was constructed in 1978 as
a multiuse plutonium research and development facility. NNSA's current
production mission for the ARIES project is to produce about 2 metric
tons of plutonium oxide feedstock. Specifically, LANL is to produce 50
kilograms of plutonium oxide by the end of fiscal year 2010, ramp up
to a target rate of 300 kilograms per year in fiscal year 2012, and
sustain this rate through fiscal year 2017. However, this material”
along with additional quantities of plutonium in nonpit form currently
stored at the K-Area Facility”will only be enough for the first 5
years of the MFFF production schedule.
NNSA has examined the possibility of expanding the ARIES project at
LANL to provide additional plutonium oxide feedstock to the MFFF.
Specifically, in May 2008, NNSA published a report that estimated NNSA
might need as much as 12 metric tons of plutonium oxide feedstock to
bridge a time gap between the startup of operations at the MFFF and
the PDCF.[Footnote 18] The report's authors evaluated several
potential scenarios for increasing the amount of equipment and the
number of work shifts at LANL and estimated that ARIES could produce
up to 16.7 metric tons of plutonium oxide at a cost of over $700
million. In conducting its analysis, the report's authors made a
number of assumptions, including that space would be available within
the Plutonium Facility 4 building to accommodate an expanded ARIES
mission, and that LANL would be able to provide the necessary vault
space to accommodate an expanded ARIES mission. However, recent GAO
work raises questions about the validity of these assumptions.
Specifically, in May 2008,[Footnote 19] we assessed NNSA's plans to
expand pit manufacturing operations within the Plutonium Facility 4
building. We found that NNSA would not be able to substantially
increase its pit manufacturing capacity in the building for the
foreseeable future because of several major constraints, including (1)
limited vault space in the Plutonium Facility 4 building for storing
pits and associated wastes and (2) competition for available floor
space in the building due to the presence of other NNSA and DOE
programs. For example, we found that vault space was one of the major
limiting factors for pit production in fiscal year 2007, and that the
vault was operating at 120 percent of its originally designed capacity.
In a more recent study, NNSA concluded that LANL would not be a viable
option to perform the entire pit disassembly and conversion mission.
Specifically, in a November 2009 report,[Footnote 20] NNSA stated that
the ARIES project would be unable to sustain the annual output of
plutonium oxide feedstock necessary to support MFFF operations for a
number of reasons. For example, the report stated that because the
Plutonium Facility 4 building is a one-of-a-kind, mission-critical
facility for national defense, national defense missions in the
facility will continue to take precedence over other programs”
including the pit disassembly and conversion mission”for the
foreseeable future. In addition, the report pointed out several of the
same constraints to expanding operations in the Plutonium Facility 4
building that we described in our prior report on pit manufacturing.
NNSA's November 2009 report also concluded that LANL continues to be a
viable option to produce some additional plutonium oxide material to
fill a potential gap if the PDCF project is delayed further. However,
the report did not update the prior 2008 report to determine what
additional amount of material it would be feasible for the ARIES
project to produce. The report also did not provide estimates for how
much an expanded ARIES mission would cost or when LANL would be able
to produce additional plutonium oxide material. Instead, the report
noted that NNSA would need to prepare and validate a detailed,
resource-loaded, integrated schedule for an expanded ARIES mission. As
a result, it remains uncertain whether ARIES could fill a potential
gap if NNSA's main pit disassembly and conversion operations are
delayed.
In March 2010, DOE stated that NNSA does not plan on expanding the
current mission of the ARIES project until LANL demonstrates that it
can sustain a production rate of 300 kilograms of plutonium oxide a
year over an extended period of time. In addition, DOE stated that
NNSA is evaluating other options to provide plutonium oxide feedstock
to the MFFF prior to the start of pit disassembly and conversion
operations. These options included (1) the use of 1.4 metric tons of
fuel-grade plutonium already in storage at the K-Area Facility and (2)
starting up "limited but sufficient" pit disassembly processes.[Footnote 21]
NNSA Has Not Sufficiently Planned for the Maturation of Critical
Technologies:
NNSA's current strategy relies on a number of technologies that are
critical to establishing a pit disassembly and conversion capability.
These technologies include the following systems and components:
* Pit disassembly”-includes a lathe, manipulators, and grippers to cut
pits, extract the plutonium, and prepare it for oxidation.
* Hydride dehydride”-includes two furnaces to separate plutonium from
other pieces of material.
* Direct metal oxidation-”includes a furnace to convert plutonium and
uranium metal into plutonium and uranium oxide.
* Oxide product handling”-includes mill rollers and a blender to size
and blend the plutonium oxide product.
* Product canning-includes an automated bagless transfer system to
package the final product.
* Sanitization”-includes a microwave furnace to melt components that
do not contain plutonium or uranium.
To demonstrate the viability of these technological components, DOE
started the ARIES project at LANL in 1998. In addition, four other
organizations are conducting testing and development activities in
support of some of the critical technologies for pit disassembly and
conversion: DOE's Savannah River National Laboratory, DOE's Pacific
Northwest National Laboratory, the Clemson Engineering Technologies
Laboratory, and a commercial vendor.[Footnote 22]
Assessing technology readiness is crucial at certain points in the
life of a project. Within DOE's critical decision framework, such
assessments are crucial at critical decision 2”acceptance of the
preliminary design and approval of the project's cost and schedule
estimates as accurate and complete”and at critical decision 3”
acceptance of the final design as sufficiently complete so that
resources can be committed toward procurement and construction.
Proceeding through these critical decision points without a credible
and complete technology readiness assessment can lead to problems
later in the project. Specifically, if DOE proceeds with a project
when technologies are not yet ready, there is less certainty that the
technologies specified in the preliminary or final designs will work
as intended. Project managers may then need to modify or replace these
technologies to make them work properly, which can result in costly
and time-consuming redesign work.
DOE has endorsed the use of the technology readiness level (TRL)
process for measuring and communicating technology readiness in cases
where technology elements or their applications are new or novel. In
March 2008, DOE's Office of Environmental Management published
guidance on conducting technology readiness assessments and developing
technology maturation plans. According to the guidance, staff should
conduct technology readiness assessments using the TRL framework.
Specifically, staff are to use a nine-point scale to measure TRLs.
This scale ranges from a low of TRL 1 (basic principles observed) to a
midlevel of TRL 6 (system/subsystem model or prototype demonstration
in relevant environment) to a high of TRL 9 (total system used
successfully in project operations). According to the guidance, for
any critical technologies that did not receive a TRL of 6 or higher
during such an assessment, staff should develop a technology
maturation plan, which is supposed to describe planned technology
development and engineering activities required to bring immature
technologies up to the desired TRL of 6 or higher. This plan should
include preliminary schedule and cost estimates to allow decision
makers to determine the future course of technology development. In
addition, the guidance stated that once a project reached the critical
decision 2 stage, all critical technologies should have reached a TRL
of 6.
NNSA has undertaken a number of assessments of technological maturity
and readiness for pit disassembly and conversion over the past decade
as part of the ARIES project. For example, the PDCF project team
carried out an evaluation of the maturity of ARIES equipment in 2003.
According to project officials, the TRL framework was first used to
assess the maturity of pit disassembly and conversion technologies in
November 2008, in accordance with the Office of Environmental
Management's 2008 guidance.[Footnote 23] In addition, as part of an
independent review of the PDCF project, NNSA issued a report in
January 2009 that included a technology readiness assessment of the
ARIES equipment and other critical technologies.[Footnote 24] The
results of this assessment, as well as the earlier assessment
conducted in 2008, are shown in table 1.
Table 1: Technology Assessments of Critical Pit Disassembly and
Conversion Technologies Conducted in 2008 and 2009:
Technology system/component: Pit disassembly;
TRL: As assessed by the PDCF project in 2008: 6-7;
As assessed by NNSA's independent review in 2009: 5.
Technology system/component: Hydride dehydride;
TRL: As assessed by the PDCF project in 2008: 3-4;
As assessed by NNSA's independent review in 2009: 4.
Technology system/component: Direct metal oxidation;
TRL: As assessed by the PDCF project in 2008: 7-8;
As assessed by NNSA's independent review in 2009: 5.
Technology system/component: Oxide product handling;
TRL: As assessed by the PDCF project in 2008: 4-5;
As assessed by NNSA's independent review in 2009: 4.
Technology system/component: Product canning;
TRL: As assessed by the PDCF project in 2008: 7-8;
As assessed by NNSA's independent review in 2009: 6.
Technology system/component: Sanitization;
TRL: As assessed by the PDCF project in 2008: 4-6;
As assessed by NNSA's independent review in 2009: 4-6.
Sources: Washington Group International, Inc.; NNSA.
[End of table]
As table 1 shows, there are a number of key technologies for pit
disassembly and conversion that had not attained a TRL of 6. In
accordance with the guidance on TRLs, NNSA should have a technology
maturation plan in place to describe the planned technology
development and engineering activities required to bring immature
technologies up to the desired TRL of 6 or higher. According to NNSA
officials, LANL had developed such a plan.[Footnote 25] However, we
found that LANL's plan lacked several key attributes of a technology
maturation plan as described by DOE's guidance. Specifically, we found
the following problems with LANL's plan:
* A technology maturation plan is supposed to be developed to bring
all immature critical technologies up to an appropriate TRL. However,
LANL's plan only addressed the technologies under development at LANL
as part of the ARIES project. The plan did not address technologies,
such as the oxide product handling equipment, being tested by the four
other organizations.
* For each technology assessed at less than TRL 6, a technology
maturation plan should include preliminary schedule and cost estimates
to allow decision makers to determine the future course of technology
development. However, LANL's plan did not include preliminary
estimates of cost and schedule.
* LANL's plan is dated November 2007. However, NNSA has conducted or
sponsored two technology readiness assessments of the PDCF critical
technologies since that date. As a result, LANL's plan is out of date
and does not take into account the current state of maturity of its
critical technologies.
NNSA officials told us that while they recognize some of the problems
with the project's existing technology maturation plan, they have
already prepared budget and schedule estimates for technology
development activities in a number of separate documents (including
the overall PDCF project schedule). However, they still have not
updated the current technology maturation plan in accordance with DOE
guidance. Until such an update is completed, it is uncertain whether
these technologies will be sufficiently mature in time to meet the
current, aggressive schedule for establishing a PDCF capability.
NNSA Has One Potential Customer for Most of Its MOX Fuel, but Outreach
to Others May Be Insufficient:
NNSA has offered several incentives to attract customers for its MOX
fuel and is working toward a formal agreement for the Tennessee Valley
Authority (TVA) to purchase the majority of this fuel. However, NNSA's
outreach to other utilities may not yet be sufficient to inform
potential customers of incentives to use MOX fuel.
NNSA Has Taken Steps to Attract Customers and Is in Negotiations with
TVA:
NNSA and its contractor for the MFFF project, MOX Services, have
established a production schedule for the fabrication of MOX fuel
assemblies from surplus, weapons-grade plutonium. According to the
current production schedule, the MFFF is to produce 8 MOX fuel
assemblies in 2018, the initial year of production. The MFFF's
production rate is then to increase over the next 5 years up to a
maximum rate of 151 fuel assemblies per year (see figure 3). The MFFF
is expected to produce 1,700 fuel assemblies during its production
run. In addition, according to NNSA's plans, these fuel assemblies
will be designed for use in pressurized water nuclear reactors, which
are the most common type of nuclear reactor in use in the United
States.[Footnote 26]
Figure 3: The MFFF Planned Production Schedule for MOX Fuel Assemblies:
[Refer to PDF for image: line graph]
Year: 2018;
Number of MOX fuel assemblies: 8.
Year: 2019;
Number of MOX fuel assemblies: 20.
Year: 2020;
Number of MOX fuel assemblies: 75.
Year: 2021;
Number of MOX fuel assemblies: 100.
Year: 2022;
Number of MOX fuel assemblies: 100.
Year: 2023;
Number of MOX fuel assemblies: 151.
Year: 2024;
Number of MOX fuel assemblies: 151.
Year: 2025;
Number of MOX fuel assemblies: 151.
Year: 2026;
Number of MOX fuel assemblies: 151.
Year: 2027;
Number of MOX fuel assemblies: 151.
Year: 2028;
Number of MOX fuel assemblies: 151.
Year: 2029;
Number of MOX fuel assemblies: 151.
Year: 2030;
Number of MOX fuel assemblies: 151.
Year: 2031;
Number of MOX fuel assemblies: 151.
Year: 2032;
Number of MOX fuel assemblies: 38.
Source: Shaw AREVA MOX Services, LLC.
[End of figure]
In June 2000, Duke Power (now Duke Energy Carolinas, LLC, or Duke), a
power utility that operates seven pressurized water reactors in North
Carolina and South Carolina, signed a subcontract with NNSA's
contractor for the MFFF project, MOX Services. According to NNSA
officials, this subcontract gave the utility the option to purchase up
to three-fourths of the MOX fuel produced by the MFFF at a discount
relative to the price of normal reactor fuel, which uses low enriched
uranium. According to the officials, the subcontract also obligated
MOX Services to compensate Duke if the MOX fuel was not delivered by
December 2007. However, as project delays continued to push back the
start of construction, Duke, MOX Services, and NNSA began discussions
in 2005 to renegotiate the subcontract. After nearly 3 years of
discussions, Duke and MOX Services were unable to reach agreement by
the negotiation deadline, and the subcontract automatically terminated
on December 1, 2008.
As negotiations with Duke came to an end, MOX Services, at NNSA's
direction, issued a request to nuclear utilities in October 2008 to
express their interest in the MOX fuel program. The request outlined a
number of possible incentives to mitigate the risks to utilities in
using MOX fuel”risks that include the need to modify reactors and
obtain an operating license amendment from NRC to use MOX fuel. For
example, the request discussed the possibility of (1) selling MOX fuel
at a discount relative to the price of uranium fuel[Footnote 27] and
(2) paying for costs associated with modifying a reactor and obtaining
an operating license amendment from NRC. Furthermore, in January 2009,
DOE reserved 12.1 metric tons of highly enriched uranium from its
stockpile and hired a contractor to downblend this amount into 155 to
170 metric tons of low enriched uranium to serve as a backup supply of
fuel if MOX fuel deliveries to customers are delayed.[Footnote 28] As
of December 2009, NNSA and MOX Services were still working on an
agreement on liability if fuel is not delivered on time.
According to NNSA officials, three utilities have responded to MOX
Services' request and have expressed interest in the MOX fuel program.
Notably, in February 2010, NNSA and TVA signed an interagency
agreement to fund TVA studies on the use of MOX fuel in five of TVA's
reactors. Under the agreement, TVA will perform work on core design,
licensing, modifications, and other related activities to evaluate the
use of MOX fuel in its reactors. According to an NNSA official, using
MOX fuel in five of TVA's reactors could account for up to 85 percent
of the MFFF's output. The official also stated that an agreement with
TVA to become a customer could be signed by the fall of 2010. TVA
officials stated that they believed that familiarity gained by working
with DOE during the Blended Low Enriched Uranium would help them work
with DOE during the MOX program and cited this factor in their
decision to begin discussions about becoming a customer for MOX fuel.
Aside from TVA, NNSA officials characterized their contact with two
other utilities as in the preliminary stages, and they could not
estimate when or if they would secure them as customers for MOX fuel.
Because utilities typically contract with fuel suppliers at least 5
years in advance, NNSA and MOX Services will need to secure customers
several years before they deliver MOX fuel to them. NNSA officials
said that their goal is to obtain at least one customer by the end of
fiscal year 2010, in part because the 5-year period during which the
MFFF will increase its production capacity will allow them additional
time to secure more customers. Furthermore, if TVA agrees to be a
customer and uses MOX fuel in five of its reactors, these officials
said that NNSA may only need one additional utility to account for the
remainder of the MFFF's planned production of MOX fuel assemblies.
However, NNSA faces two main obstacles in obtaining TVA as its primary
customer. First, some of TVA's reactors that would be candidates for
using MOX fuel may not be permitted to use the fuel due to their
status as backup reactors in DOE's tritium production program.
According to NNSA officials, the 2000 U.S.-Russian plutonium
disposition agreement could be interpreted as precluding reactors
involved in weapons production from being used to dispose of MOX fuel.
TVA officials told us that they are working with DOE to transfer
tritium production responsibilities to another TVA reactor that is not
presently a candidate for the MOX program. Second, although NNSA
currently plans to produce MOX fuel assemblies for use in pressurized
water reactors, three of TVA's reactors that are candidates for
burning MOX fuel are boiling water reactors.[Footnote 29] NNSA
officials told us that they are studying how the MFFF can be
reconfigured to produce fuel assemblies for boiling water reactors. In
particular, they stated that the MFFF's design is based on a French
MOX Facility, which can switch production between fuel assemblies for
pressurized water reactors and for boiling water reactors in about 10
to 20 days. However, the officials also stated that they might need to
conduct additional tests on using MOX fuel assemblies in boiling water
reactors before producing the fuel assemblies in large quantities, and
that it was unclear whether such tests would delay the MOX production
schedule.
In March 2010, DOE stated that NNSA is evaluating several options for
providing alternative sources of plutonium oxide material to the MFFF
prior to the start of pit disassembly and conversion operations. One
option under consideration is to adjust the "quantity and timing in
providing initial fuel deliveries" to potential customers.
NNSA's Proposed Incentives Might Attract Customers, but Current
Outreach May Be Insufficient:
We interviewed fuel procurement officials at 22 of the nation's 26
nuclear utilities to determine the extent to which nuclear utilities
are interested in participating in DOE's MOX fuel program and to
evaluate what factors may influence their interest.[Footnote 30] The
factors we asked about were based on input we received from industry
experts, DOE officials, and former utility officials. (For a list of
the structured interview questions that we asked utilities, see app.
IV.) As shown in table 2, utility officials most often identified the
following factors as very or extremely important when assessing their
level of interest in participating in the MOX fuel program:
* consistent congressional funding of the program,
* DOE's ability to ensure timely delivery of MOX fuel,
* DOE's ability to ensure the timely delivery of a backup supply of
uranium fuel,
* the cost of MOX fuel relative to the cost of reactor fuel, and,
* the opportunity to test MOX fuel in their reactors prior to full-
scale use.
Table 2: Factors Affecting a Utility's Interest in the MOX Fuel
Program:
Factor: Congressional funding of the program throughout its expected
duration;
Number of utilities characterizing factor as "very important" or
"extremely important": 20.
Factor: DOE's ability to ensure timely delivery of MOX fuel;
Number of utilities characterizing factor as "very important" or
"extremely important": 20.
Factor: DOE's ability to ensure timely delivery of backup uranium fuel;
Number of utilities characterizing factor as "very important" or
"extremely important": 19.
Factor: Cost of MOX fuel relative to reactor fuel;
Number of utilities characterizing factor as "very important" or
"extremely important": 19.
Factor: Opportunity to test MOX fuel prior to full-scale use;
Number of utilities characterizing factor as "very important" or
"extremely important": 19.
Factor: Cost of modifying the reactor for MOX fuel use;
Number of utilities characterizing factor as "very important" or
"extremely important": 17.
Factor: Costs associated with obtaining NRC licensing to use MOX fuel;
Number of utilities characterizing factor as "very important" or
"extremely important": 15.
Factor: Public opinion regarding MOX fuel use;
Number of utilities characterizing factor as "very important" or
"extremely important": 14.
Factor: Storage of MOX fuel on site prior to use;
Number of utilities characterizing factor as "very important" or
"extremely important": 7.
Source: GAO analysis of structured interviews of 22 utilities.
[End of table]
We then asked utilities about possible incentives”some of which have
already been proposed by NNSA and DOE”that may affect their interest
in becoming program participants.[Footnote 31] We also asked about
scenarios in which DOE offered a discount of 15 percent and 25 percent
for MOX fuel relative to the price of regular reactor fuel. As shown
in table 3, DOE's payment for costs associated with reactor
modifications and NRC licensing to use MOX fuel”two incentives DOE has
actually proposed to utilities”resulted in the largest number of
utilities expressing increased interest in participating in the MOX
fuel program.
Table 3: Number of Utilities Indicating Increased Interest in the MOX
Fuel Program Due to Possible Incentives:
Incentive: DOE payment for reactor modifications for MOX fuel use[A];
Number of utilities expressing increased interest: 15.
Incentive: DOE payment of costs associated with obtaining NRC
licensing to use MOX fuels;
Number of utilities expressing increased interest: 14.
Incentive: DOE offering a 25 percent discount for MOX fuel in relation
to regular reactor fuel;
Number of utilities expressing increased interest: 13.
Incentive: DOE funding for MOX fuel testing prior to full-scale use;
Number of utilities expressing increased interest: 12.
Incentive: DOE offering a 15 percent discount for MOX fuel in relation
to regular reactor fuel;
Number of utilities expressing increased interest: 8.
Source: GAO structured interview of 22 utilities.
[A] Indicates proposed DOE incentive.
[End of table]
However, despite the incentives offered, as of October 2009 the
majority of the utilities that we interviewed expressed little or no
interest in becoming MOX fuel customers. Specifically, 12 utilities
reported they were either not interested or not very interested in
becoming MOX fuel customers, 8 utilities were somewhat interested, and
only 2 utilities indicated that they were currently very interested or
extremely interested in the program. Three utilities indicated that
they were currently interested enough to consider contacting DOE about
becoming MOX fuel customers. When asked to consider the proposed
incentives, however, 8 utilities expressed such interest.[Footnote 32]
NNSA officials stated that they have communicated their willingness to
provide incentives to potential customers. However, neither NNSA nor
MOX Services has provided additional outreach or information to
utilities in general since the October 2008 request for expression of
interest.[Footnote 33] Furthermore, 11 utilities responded in our
interviews that they had heard or read very little about the MOX fuel
program, while 5 responded that they had received no information. In
our view, the fact that so few utilities expressed sufficient interest
in even contacting NNSA and MOX Services suggests that NNSA's outreach
may not be sufficient.
NRC Has Been Providing Oversight for the MFFF, but DOE's Independent
Oversight of the MFFF and the WSB Has Been Limited:
NRC has been providing nuclear safety oversight of the MFFF, which so
far has included authorizing construction, identifying safety-related
issues with construction, and reviewing the license application for
the operation of the facility. DOE has looked at some aspects of
nuclear safety for both the MFFF and the WSB as part of its management
reviews, but oversight by DOE's independent nuclear safety entities
has been limited.
NRC Has Been Reviewing the MFFF's License Application and Has
Identified Issues with Construction Practices:
NRC is responsible for licensing the MFFF to produce fuel for
commercial nuclear reactors. To do so, NRC is using a two-stage review
and approval process: the first stage is construction authorization,
and the second stage is license application approval. The construction
authorization stage began in February 2001, when the MFFF contractor
submitted an application to begin construction. As part of the
construction authorization review, NRC reviewed key documents,
including the project's preliminary safety designs, environmental
impact statement, and quality assurance plan. NRC approved the
facility's construction authorization request in March 2005.
NRC began its review of the MFFF project's application for a license
to possess and use radioactive materials in December 2006. NRC has
divided the license review into 16 areas, including
criticality/safety, chemical processing, and fire protection. NRC has
issued requests for additional information for each of the 16 review
areas. According to NRC officials, once NRC staff obtain all of the
necessary information in a given area, they prepare a draft section
for that area to be included in the draft Safety Evaluation Report for
the facility. As shown in table 4, NRC had drafted sections for 6 of
the 16 review areas as of January 2010. Once all of the draft sections
are complete, NRC staff will prepare a draft safety evaluation report
and, after concurrence from NRC management, will submit them to NRC's
Advisory Committee on Reactor Safeguards-”a committee of experts that
is independent of the staff and that reports directly to NRC's
commissioners-”for review and comment. NRC staff are then to
incorporate, at their discretion, the committee's comments into the
license approval document and issue a final safety evaluation report
for the facility, which NRC expects to occur in December 2010. Once
NRC completes a safety review and verifies that MOX Services has built
the facility according to NRC's safety regulations, it may issue the
license. NRC officials stated that they could issue the license by
2014 or 2015, depending on the construction status of the facility.
Table 4: Status of NRC's Review of the MFFF's Operating License as of
January 2010:
Review area: Chemical processing;
Safety section drafted: No.
Review area: Civil/Structural;
Safety section drafted: Yes.
Review area: Classified matter handling;
Safety section drafted: Yes.
Review area: Criticality safety;
Safety section drafted: Yes.
Review area: Confinement;
Safety section drafted: No.
Review area: Emergency planning;
Safety section drafted: Yes.
Review area: Environmental protection;
Safety section drafted: Yes.
Review area: Fire protection;
Safety section drafted: No.
Review area: Human factors;
Safety section drafted: No.
Review area: Instrumentation and control;
Safety section drafted: No.
Review area: Integrated safety analysis;
Safety section drafted: No.
Review area: Management measures;
Safety section drafted: No.
Review area: Material control and accounting;
Safety section drafted: No.
Review area: Physical protection;
Safety section drafted: No.
Review area: Plant systems;
Safety section drafted: No.
Review area: Radiation protection;
Safety section drafted: Yes.
Source: NRC.
[End of table]
One issue that NRC raised during its review of the MFFF project is the
design of safety controls to prevent a chemical reaction known as a
"red oil excursion."[Footnote 34] Specifically, in January 2004,
during the construction authorization stage, a senior NRC chemical
safety reviewer stated that the MFFF's planned safety controls to
prevent a red oil excursion differed from those recommended by DOE and
the Defense Nuclear Facilities Safety Board. In response, NRC convened
a panel in March 2005 to evaluate the reviewer's concerns. The panel
issued a report in February 2007 concluding that although NRC's
construction authorization of the MFFF did not need to be revisited,
there was wide agreement among NRC staff and the Advisory Committee on
Reactor Safeguards that significant technical questions remained
unanswered about the MFFF's planned safety controls. To address these
technical questions, NRC has taken a number of actions, including the
following:
* NRC engaged the assistance of the Brookhaven National Laboratory to
provide two independent assessments of the risk of a red oil excursion
at the facility. Brookhaven National Laboratory issued an initial
report in March 2007 and a follow-up report in August 2009 in which it
examined updated safety information provided by MOX Services.[Footnote
35] The second of the two reports concluded that the risk of a red oil
excursion at the facility is highly unlikely.
* During the current licensing application stage, NRC officials have
requested and received additional information from MOX Services
related to planned safety controls to prevent a red oil excursion.
However, as of our review, NRC staff had not completed their draft
safety evaluation report for this area.
NRC's oversight responsibilities also include inspecting the
construction of the MFFF as well as the project's own quality
assurance plan. NRC's Division of Construction Projects, based in
NRC's Region II headquarters in Atlanta, conducts periodic inspections
of the MFFF that assess the design and installation of the facility's
principal structures, systems, and components and verifies that the
project's quality assurance program is adequately implemented. These
inspections involve document reviews and site inspections over several
weeks and can include specialty reviews in welding, concrete, and
other construction subject areas. NRC evaluates the MFFF's
construction against standards set by the American Concrete Institute
and the American Society of Mechanical Engineers, among others. In
addition to the Region II inspections, NRC maintains one resident
inspector at the construction site who conducts day-to-day inspection
activities, such as walk-throughs. NRC also plans to hire an
additional full-time resident inspector for the MFFF in fiscal year
2010.
As part of its ongoing inspection of the construction of the MFFF, NRC
has issued 16 notices of violation against MOX Services since the
start of construction in August 2007 related to various subjects,
including quality assurance and control over design changes.
(See appendix V for a complete list and description of NRC notices of
violation.) Although NRC has classified all of the violations to date
as severity level IV, the lowest safety-significant designation in its
four-category scale, the violations have had an effect on the
project's schedule.[Footnote 36]
In addition to its regular construction reviews, NRC issues periodic
assessments of the contractor's performance. In its latest assessment,
released in November 2009, NRC concluded that MOX Services had
conducted its overall construction activities at the MFFF in an
acceptable manner. However, NRC also determined that MOX Services must
improve its control over changes to the MFFF's design and increase its
attention to its quality assurance oversight of vendors. NRC
identified several examples of deficiencies associated with
performing, verifying, and documenting design changes and noted
failures on the part of MOX Services to adequately translate
requirements into design and construction documents. In addition, NRC
concluded that its finding of a violation related to MOX Services'
vendor oversight indicates "a challenge to [MOX Services'] quality
assurance staff to provide effective oversight of vendors that perform
work on, fabricate, or supply components and equipment for use at the
MFFF." In its assessment, NRC stated that it will conduct additional
inspections to assess the effectiveness of MOX Services' corrective
actions. In response to NRC's assessment, MOX Services stated that it
is taking steps to strengthen its design control process, such as
increasing training for quality control supervisors; introducing
quality control checklists into its subcontractor and construction
procedures; and conducting oversight visits to vendors.
DOE Included Nuclear Safety in Management Reviews of the Projects, but
Oversight by DOE's Independent Nuclear Safety Entities Has Been
Limited:
Although DOE has incorporated elements of nuclear safety in management
reviews of the MFFF and the WSB projects that were conducted as part
of its critical decision review process, the independent entities that
were to conduct reviews of these projects were minimally involved. As
part of the critical decisions 2 and 3 review process for the MFFF
project, OECM conducted a review of the MFFF project during April and
May, 2006, which included nuclear safety as one of several review
areas. A review team comprising independent consultants and former DOE
officials evaluated, among other things, the integration of nuclear
safety into the project's environmental, safety, and health programs,
as well the contractor's process for addressing issues found by NRC.
The review identified one finding related to safety, noting that the
ongoing revision of the project contract could introduce conflicts
with NRC regulations. NNSA accepted the review's recommendation to
develop a memorandum of understanding with NRC to resolve this issue.
Regarding the WSB project, OECM conducted a review during September
2008”as part of the critical decision 2 process”that included nuclear
safety as one of several review areas. The review team examined key
WSB documents related to nuclear safety, including the facility's
safety evaluation report, preliminary documented safety analysis, and
the design hazard analysis report. The review team recommended that an
additional hazard analysis for one system be performed but determined
that overall, the hazard analyses and safety assessments for the WSB
were comprehensive and complete. In addition, NNSA's Office of Project
Management and Systems Support conducted another review of the WSB
project during September 2008 as part of the critical decision 3
process. Because it was almost simultaneous with OECM's review, NNSA's
review was less comprehensive and focused specifically on the WSB's
ability to protect against a red oil excursion. This review resulted
in a single recommendation, that is, for additional justification for
the inclusion of certain equipment in the facility's design. In
response to the recommendation, the WSB project team submitted a
revised safety evaluation report justifying the equipment.
Oversight by HSS Has Been Limited:
Involvement by 1155, the main independent oversight entity for safety
within DOE, has been limited for both the MFFF and the WSB projects.
1155 is responsible for policy development, enforcement, and
independent oversight in the areas of health, safety, the environment,
and security across DOE. To accomplish this responsibility, this office
performs appraisals to verify, among other things, that the
department's employees, contractors, the public, and the environment
are protected from hazardous operations and materials. However, these
appraisals are designed to complement, not duplicate, program office
oversight and self-assessments. In particular, HSS conducts visits to
DOE sites and reviews a sample of facilities at those sites, including
construction activities for new facilities. In addition, according to
HSS officials, the office assists DOE's program offices by conducting
reviews of documents supporting the safety basis”which is a technical
analysis that helps ensure the safe design and operation of DOE's
nuclear facilities”of a sample of high hazard nuclear facilities at a
DOE site. For example, in response to our October 2008 report, which
found that HSS was not conducting reviews of the safety basis of new,
high-hazard nuclear facilities, HSS issued a new appraisal process
guide in July 2009 that emphasized increased focus on the safety basis
at such facilities.[Footnote 37] Finally, HSS has other oversight and
advisory responsibilities related to nuclear safety during critical
decision reviews for major DOE facilities. These responsibilities are
spelled out in DOE's Order 413.3A, which provides direction on program
and project management for the acquisition of capital assets, and
include the following actions:
* participating on the Energy Systems Acquisition Advisory Board”a
body comprising senior DOE officials who advise DOE's Secretarial
Acquisition Executive in critical decisions regarding major projects
and facilities;
* advising the DOE Secretarial Acquisition Executive on environmental,
safety, and security matters related to all critical decision
approvals;
* serving on independent project reviews as a team member at the
request of the Secretarial Acquisition Executive or program officials;
and;
* participating on external independent reviews as an observer at
OECM's request.
Regarding the MFFF project, IBS has provided limited oversight.
According to IBS officials, because the National Defense Authorization
Act of 1999 gave NRC responsibility for regulating nuclear safety at
the MFFF, HSS's oversight activities have been more limited at the
MFFF than at other DOE facilities. For example, while HSS has
conducted some inspection activities at the MFFF, including reviewing
reinforced concrete and structural steel at the facility during site
visits to SRS in August and September, 2009, HSS officials said that
these activities did not include a review of documents supporting the
MFFF's safety basis. In addition, while HSS officials stated that
personnel from HSS's predecessor office participated in the critical
decisions 2 and 3 reviews for the MFFF project during 2006, HSS was
unable to provide any documentation to substantiate this statement.
[Footnote 38] According to department officials, HSS had limited
resources for conducting reviews and needed to focus its resources on
facilities that were not subject to external regulation.
Regarding nuclear safety oversight of the WSB project, which is solely
regulated by DOE, we found that HSS had not conducted any oversight
activities or participated in any critical decision reviews.
Specifically, HSS officials told us that they have not reviewed any
documents supporting the WSB's safety basis, nor have they conducted
any inspection activities at the WSB construction site. Despite the
issuance of HSS's new appraisal process guide, which contains
inspection protocols for new and unfinished high-hazard nuclear
facilities, an HSS official told us that the office has yet to
determine when they will inspect the WSB. An HSS official told us that
he was uncertain whether a WSB inspection would occur in 2010 because
an ongoing internal DOE review has delayed the development of the
office's 2010 inspection schedule. However, if HSS's initial visit
occurs later than 2010, NNSA will have already completed at least half
of the WSB's construction, according to the project's schedule.
Additionally, 1155 did not participate in any of the critical decision
reviews for the WSB project because of existing DOE guidelines.
Specifically, although the WSB is considered a category 2 (high-
hazard) nuclear facility, it is categorized as a nonmajor project.
[Footnote 39] According to DOE's order, 1155 is not required to
participate on the review board for a nonmajor project. In addition,
neither OECM nor NNSA requested HSS to participate on the project
reviews conducted for critical decisions 2 and 3.
Oversight by CDNS Has Been Limited:
NNSA's Central Technical Authority and the CDNS, which provide
independent nuclear safety oversight, have not conducted any nuclear
safety oversight activities for the MFFF project, and the offices have
not conducted all of the oversight activities called for by DOE
guidance for the WSB. DOE's Order 413.3A calls for the Central
Technical Authority to maintain operational awareness regarding
complex, high-hazard nuclear operations, and to ensure that DOE's
nuclear safety policies and requirements are implemented adequately
and properly. The order directs the CDNS to support the Central
Technical Authority in this effort by:
* participating as part of the Energy Systems Acquisition Advisory
Board for major facilities, or similar advisory boards for minor
facilities;
* providing support to both the Central Technical Authority and the
Acquisition Executive regarding the effectiveness of efforts to
integrate safety into design at each of the critical decisions, and as
requested during other project reviews;
* determining that nuclear facilities have incorporated the concept of
defense-in-depth into the facility design process;
* validating that the integration of design and safety basis
activities includes the use of a system engineering approach tailored
to the specific needs and requirements of the project; and;
* validating that federal personnel assigned to projects as nuclear
safety experts are appropriately qualified.
The CDNS's manual for implementing DOE Order 413.3A provides
additional guidance, such as establishing the responsibilities of CDNS
staff for evaluating safety activities at nuclear facilities. The
manual also directs the head of the CDNS to participate in relevant
staff meetings for NNSA projects that are requesting a decision from
the Energy Systems Acquisition Advisory Board, an activity that may
not be delegated for major projects.[Footnote 40]
However, according to the head of the CDNS, his office has not
participated in any safety review activities at the MFFF because NRC
is regulating nuclear safety at the facility. The head of the CDNS
acknowledged that his office's approach to overseeing nuclear safety
for the MFFF project does not follow the guidance set out in DOE
orders and related manuals and has not been formally adopted by NNSA.
He stated this approach is necessary to make more efficient use of
CDNS resources by focusing oversight activities on facilities
regulated entirely by DOE.
The CDNS has provided some oversight of the WSB project, but according
to the head of the CDNS, this oversight has been limited, due in part
to difficulty in applying DOE's guidance to the WSB and staffing
issues. The CDNS participated as an observer on the advisory board for
the WSB project during the project's critical decisions 2 and 3
processes. However, the head of the CDNS said that he had no record of
whether his office participated in or evaluated the results of OECM's
review during the critical decision 2 process, which included several
lines of inquiry related to nuclear safety. During the critical
decision 3 process for the WSB project, CDNS staff reviewed key
project safety documents to determine how the facility would protect
against a red oil excursion and determine the qualifications of the
federal staff person assigned to the project as a nuclear safety
expert.
Despite these efforts, the head of the CDNS told us that during the
critical decision 3 review, his office experienced some difficulty in
implementing the guidance established in DOE orders for the WSB
project. The office's current policy is to review a project's safety
documentation early in the design process and determine whether it
conforms to DOE's relevant safety standard for integrating safety into
design and incorporating defense-in-depth.[Footnote 41] The WSB
project had completed its design work before DOE issued its current
standard, and before the CDNS implemented a systematic approach to
fulfilling its functions. Consequently, the CDNS did not perform a
systematic review of WSB safety documentation. The CDNS head
characterized the WSB review as being an ad hoc, qualitative
assessment of some of the project's safety documentation.
Additionally, the CDNS has not evaluated the qualifications of the
nuclear safety expert that replaced the one evaluated as part of the
critical decision 3 review. However, according to the head of the
CDNS, his office only plans to evaluate the qualifications of new
staff during technical reviews of the project, not after every change
to the project team's composition.
The head of the CDNS told us that his office has begun developing a
more systematic approach to evaluating the design safety of DOE
facilities. In addition, he stated that he would like to conduct
additional safety reviews of facilities currently in design and
construction. However, he said that these efforts have been hampered,
in part due to staffing shortages. For example, the CDNS had a staff
of 13 people in 2007. As of December 2009, however, only 4 people
remained on the CDNS staff due to attrition and NNSA's decision to
transfer some of the personnel into other program offices. The head of
the CDNS stated that current staffing levels have led the CDNS to
focus its attention on projects that are still in the design phase. He
said that it was doubtful that the CDNS would return to the WSB to
ensure that safety basis controls are fully integrated during its
construction. Concerns over CDNS staffing issues also were raised by
the Defense Nuclear Facilities Safety Board. Specifically, in its
March 2009 letter to the Secretary of Energy, the safety board noted
that reduced staff levels and the transfer of CDNS personnel into
NNSA's program offices have reduced the effectiveness of the office.
Conclusions:
NNSA is already over 2 years into its construction schedule for the
MFFF and expects the facility to become operational by 2016. It has
also established a production schedule for fabricating up to 151 MOX
fuel assemblies per year at full production. However, the agency faces
uncertainty as to (1) its ability to supply the MFFF with sufficient
quantities of plutonium oxide feedstock to meet its planned production
schedule of MOX fuel and (2) the demand for MOX fuel assemblies from
potential customers. Regarding the supply of plutonium oxide
feedstock, NNSA only has a limited quantity of feedstock on hand to
supply the MFFF prior to the start of pit disassembly operations.
However, NNSA has not established a definitive strategy for pit
disassembly operations, nor does it expect to do so in the near
future. As a result, it appears unrealistic that NNSA will be able to
meet its current production schedule for MOX fuel without obtaining
additional sources of plutonium oxide. NNSA has stated that while it
does not plan on expanding the current mission of the ARIES project
until LANL demonstrates a sustained production rate over an extended
period of time, it is evaluating other options to address this
potential shortfall of plutonium oxide. These options include (1) the
use of 1.4 metric tons of fuel-grade plutonium already in storage at
the K-Area Facility, (2) starting up "limited but sufficient" pit
disassembly processes, and (3) adjusting the "quantity and timing" in
delivering MOX fuel to potential customers. We have concerns with
these options, including (1) NNSA's use of a "wait-and-see" approach
to the ARIES project, and the implications this may have on the
ability of the ARIES project to meet its current and future production
goals; (2) the implications of the use of fuel-grade plutonium on the
design and safety of the MFFF, and the extent to which DOE has
adequately determined how much additional material throughout the DOE
complex may be suitable and available for use by the MFFF; (3) how DOE
plans to establish limited pit disassembly processes given the current
lack of a definitive strategy for pit disassembly operations; and (4)
how DOE plans to adjust the MOX fuel production schedule, and the
implications this may have on the cost and schedule for operating the
MFFF and DOE's ability to attract potential MOX fuel customers. In
addition to these concerns, while NNSA's strategy relies on critical
technologies currently under development at LANL and other sites for
pit disassembly and conversion operations, its current technology
maturation plan does not meet DOE's current guidance because the plan
is outdated and incomplete. Without a plan that provides more details
on the options DOE has mentioned to increase the supply of plutonium
oxide, or a comprehensive technology maturation plan, it is uncertain
whether NNSA will be able to meet the MFFF's planned production
schedule.
Regarding obtaining customers for MOX fuel assemblies, our survey of
utilities indicated that some utilities might be interested in
becoming customers but appear unaware of the incentives NNSA and DOE
are offering. Without additional outreach, NNSA may not be able to
obtain sufficient customers for the MOX fuel it plans to produce,
which would leave the agency with nuclear material it cannot dispose
of and the U.S. Treasury with a forgone opportunity for revenue.
Although DOE incorporated some aspects of nuclear safety oversight in
its management reviews of the MFFF and WSB projects, oversight by HSS
and the CDNS has been limited. Specifically, HSS has conducted limited
oversight activities at the MFFF but has played no role in the WSB
project because of its designation as a nonmajor project. In contrast,
the CDNS has played no role in the MFFF project and has provided some
elements of nuclear safety oversight for the WSB project. However, it
has not fully met the responsibilities laid out for it by DOE order,
in part due to a lack of a formal, standardized approach for reviewing
project safety documents. We believe that HSS's exclusion from these
project reviews, as well as the limited involvement of the CDNS,
creates a gap in oversight of the MFFF, WSB, and similar facilities.
Recommendations for Executive Action:
We are making the following five recommendations.
To address uncertainties associated with NNSA's plans to establish a
pit disassembly and conversion capability, we recommend that the
Administrator of the National Nuclear Security Administration take the
following three actions:
* Develop a plan to mitigate the likely shortfall in plutonium oxide
feedstock for the MFFF prior to the start of pit disassembly
operations. This plan should include, at a minimum, the following five
items: (1) the actions needed to ensure that the ARIES project will
meet its existing production goals, and the cost and schedule 40
associated with any needed expansion of the project; (2) an assessment
of how much additional plutonium material, including fuel-grade
plutonium, is available within the DOE complex for use as feedstock
for the MFFF; (3) an assessment of the effect on the design and safety
of the MFFF from the use of fuel-grade plutonium as feedstock; (4) an
assessment of potential changes to the MOX fuel production schedule
and the effect of these changes on the cost and schedule for operating
the MFFF; and (5) an assessment of the cost and schedule associated
with obtaining a limited but sufficient pit disassembly process to
produce feedstock for the MFFF.
* Develop a technology maturation plan for the pit disassembly and
conversion mission that (1) includes all critical technologies to be
used in pit disassembly and conversion operations and (2) provides
details (including preliminary cost and schedule estimates) on planned
testing and development activities to bring each critical technology
up to a sufficient level of maturity.
* Conduct additional outreach activities to better inform utilities
about the MOX fuel program and related incentives.
To ensure that the MFFF, WSB, and similar projects receive consistent
nuclear safety oversight that is independent from the DOE program
offices, we make the following two recommendations:
* The Secretary of Energy should revise DOE Order 413.3A to provide
that HSS participate in key project reviews for the WSB and similar
high-hazard facilities prior to the beginning of construction
activities regardless of their status as nonmajor projects.
* The Administrator of NNSA should ensure that the CDNS conducts
oversight activities to the extent called for by DOE Order 413.3A and
establishes a formal, standardized approach to reviewing safety
documentation.
Agency Comments and Our Evaluation:
We provided the Department of Energy, the National Nuclear Security
Administration, and the Nuclear Regulatory Commission with a draft of
this report for their review and comment. In commenting on the draft
report, the NNSA Associate Administrator for Management and
Administration said that DOE agreed with the report and its
recommendations.
However, we have concerns about DOE's response to one of our
recommendations. Specifically, NNSA agreed with our recommendation, in
a draft report, to ensure that CDNS conducts oversight activities for
the WSB and similar facilities. However, in its comments, NNSA stated
that it is working with DOE to more clearly exclude CDNS from
overseeing facilities regulated by NRC. We are concerned with the
suggestion that CDNS should be excluded from overseeing facilities
regulated by NRC. As our report explains, CDNS is responsible for
supporting the NNSA Central Technical Authority in a variety of ways,
including participating as part of the Energy Systems Acquisition
Advisory Board for major facilities and providing support regarding
the effectiveness of efforts to integrate safety into designs at each
of a project's critical decisions. We do not see a rationale for
excluding CDNS from providing technical advice to senior NNSA
officials on matters related to nuclear safety, including for the MFFF
or any other facility, merely because a facility is subject to
regulation by NRC. As a result, we have revised our conclusions to
more clearly express our concerns and expanded our original
recommendation to address nuclear safety oversight for both the MFFF
and the WSB.
In addition, in commenting on our recommendation in a draft report
that NNSA should develop a plan for expanding the ARIES project to
produce additional quantities of plutonium oxide feedstock for the
MFFF, DOE stated that NNSA is also evaluating other options for
producing additional feedstock material for the MFFF, including (1)
the use of 1.4 metric tons of fuel-grade plutonium already in storage
at the K-Area Facility, (2) starting up "limited but sufficient" pit
disassembly processes, and (3) adjusting the "quantity and timing" in
delivering MOX fuel to potential customers. This information was not
disclosed to us during our review, and we have a number of concerns
about these options. For example, regarding the option to process fuel-
grade plutonium, the MFFF was designed to process weapons-grade
plutonium, not fuel-grade plutonium. As a result, we are concerned
about the implications of this option on the design and safety of the
MFFF. We are also concerned about the extent to which DOE has
adequately determined how much additional material might be available
throughout the DOE complex for use as an alterative source of
feedstock for the MFFF. To address these concerns, we revised our
conclusions and expanded our original recommendation to ensure that
NNSA establishes a plan to more clearly explain its strategy for
mitigating the likely shortfall in plutonium oxide feedstock for the
MFFF prior to the start of pit disassembly operations.
DOE's written comments are reprinted in appendix VI, and NRC's written
comments are reprinted in appendix VII. In addition, DOE and NRC
provided detailed technical comments, which we incorporated as
appropriate.
We are sending copies of this report to the appropriate congressional
committees, the Secretary of Energy, the Administrator of NNSA, and
other interested parties. We will also make copies available at no
charge on GAO's Web site at [hyperlink, http://www.gao.gov].
If you or your staffs have any questions about this report, please
contact me at (202) 5123841 or aloisee@gao.gov. Contact points for our
Offices of Congressional Relations and Public Affairs may be found on
the last page of this report. Key contributors to this report are
listed in appendix VIII.
Signed by:
Gene Aloise:
Director, Natural Resources and Environment:
Appendix I: Scope and Methodology:
To assess the performance status of the MOX Fuel Fabrication Facility
(MFFF) ) and the Waste Solidification Building (WSB) construction
projects regarding cost and schedule, we requested and analyzed earned
value management (EVM) data contained in the projects' monthly reports
and variance reports, as well as EVM data for the MFFF project
contained in Excel spreadsheets. We assessed the adequacy of the MFFF
project's use of EVM reporting by using a set of analysis tasks
developed by GAO. In addition, we assessed the reliability of the EVM
data by evaluating each project's schedule against GAO's scheduling
best practices.[Footnote 42] We have previously identified nine key
practices necessary for developing a reliable schedule. These
practices are (1) capturing all activities, (2) sequencing activities,
(3) establishing the duration of activities, (4) assigning resources
to activities, (5) integrating activities horizontally and vertically,
(6) establishing the critical path for activities, (7) identifying the
float time between activities, (8) performing a schedule risk
analysis, and (9) monitoring and updating the schedule. To assist us
in these efforts, we contracted with Technomics, Inc., to perform an
in-depth analysis of data used in the MFFF's integrated master
schedule and the WSB's current schedule. For the MFFF project, we also
conducted a review of the project's schedule risk analysis, which was
performed during the summer of 2009. We also interviewed officials
from the Department of Energy's (DOE) National Nuclear Security
Administration (NNSA) and MOX Services regarding their use of EVM
data, scheduling practices, and schedule risk analyses for the two
projects. Finally, we conducted tours of the MFFF construction project
at DOE's Savannah River Site (SRS), and met officials from the MFFF's
contractor, MOX Services, Inc.; and DOE's NNSA and Office of
Engineering and Construction Management (OECM).
To assess the status of NNSA's plan to establish a pit disassembly and
conversion capability to supply plutonium to the MFFF, we reviewed
documentation provided by NNSA and its contractors for the Pit
Disassembly and Conversion Facility (PDCF), Plutonium Preparation
Project, K-Area Complex, and MFFF projects, including project
execution plans, project status reports, EVM data, and independent
project reviews. We also requested information from NNSA on risks
associated with the development of technology used in pit disassembly
and conversion. We analyzed these risks using DOE guidance on
assessing technology readiness.[Footnote 43] We also reviewed project
plans, testing and development data, and feasibility studies related
to the Advanced Recovery and Integrated Extraction System (ARIES)
project. We also toured the ARIES facility at DOE's Los Alamos
National Laboratory (LANL) in New Mexico and interviewed officials
involved in the project.
To assess the status NNSA's plans to obtain customers for mixed-oxide
(MOX) fuel from the MFFF, we reviewed project documents, including
interest requests communicated to utilities, descriptions of possible
incentives for participating in the MOX program, and analyses on the
expected return to the government from the sale of MOX fuel. We also
interviewed officials from NNSA and the Tennessee Valley Authority
(TVA) on current efforts to secure TVA as a customer for MOX fuel, as
well as officials from Duke Energy on factors that caused the utility
to end its agreement with NNSA's contractor to purchase MOX fuel. To
further identify factors impacting utilities' interest in the MOX fuel
program, we conducted structured telephone interviews of U.S. nuclear
utilities. We chose to interview fuel procurement officers because
they would be the most knowledgeable respondents about factors
impacting fuel purchasing decisions, including considerations for MOX
fuel. We asked fuel procurement officers to provide information on
their currents interest in MOX fuel, important factors in the
consideration of using MOX fuel, and possible incentives for the
adoption of MOX fuel. To develop the structured interview
questionnaire, GAO social science survey specialists and GAO staff
developed a draft of the questionnaire on the basis of survey design
principles and information obtained in interviews with DOE and nuclear
utility officials. The draft questionnaire underwent a blind review by
an additional social science survey specialist and was edited to
ensure consistency among questions and clearly defined terms. The
revised draft questionnaire was then pretested on three respondents,
all of whom were familiar with the nuclear fuel procurement process.
During the pretests, respondents were asked about their understanding
of the questions, how they would approach constructing their answers,
and any editorial concerns. The draft questionnaire underwent a final
revision before being used to conduct the structured telephone
interviews.
Structured interviews were completed by fuel procurement officials
from 22 of the 26 nuclear utilities in the United States, for an
overall response rate of 85 percent. All of the interviews were
conducted during September and October, 2009. Respondents were
contacted in advance to schedule a time to complete the interview. One
of the 22 responding utilities elected not to answer two of the
interview questions, but the other 21 completed the entire
questionnaire. Data from the interviews were recorded and entered by
the interviewer. A social science analyst performed a 100 percent
check of that data entry by comparing them with their corresponding
questionnaires, to ensure that there were no errors. Because
respondents were not drawn from a sample, there are no sampling errors
in our results. Additionally, the design process of the questionnaire,
previously described, was carefully constructed to minimize
nonsampling error.
To examine the actions that NRC and DOE have taken to provide
independent nuclear safety oversight of the MFFF and WSB construction
projects, we reviewed oversight documentation and reports and
interviewed oversight officials from both agencies. In relation to
NRC's oversight activities, we examined documents related to NRC's
approval of the MFFF's construction authorization request; information
requests submitted by NRC to MOX Services in support of NRC's ongoing
review of the facility's operating license application; and technical
analyses conducted by Brookhaven National Laboratory on behalf of NRC
examining the likelihood of a red oil excursion at the facility. We
also reviewed documents related to NRC's construction inspection
program, including inspection guidance and procedures, inspection
reports, periodic assessments of MOX Services' performance, and MOX
Services' responses to inspection findings. We also interviewed
officials from the Nuclear Regulatory Commission's Office of Nuclear
Materials Safety and Safeguards and the Region II Division of
Construction Projects. In relation to DOE's inspection activities, we
reviewed DOE project management and nuclear safety oversight guidance,
protocols for conducing facility inspections, inspection reports, and
records of decision related to reviews conducted by DOE's Office of
Health, Safety, and Security (HSS) and the Chief of Defense Nuclear
Safety. We also reviewed reports by the Defense Nuclear Facilities
Safety Board on DOE oversight and interviewed Safety Board officials.
We interviewed officials from NNSA's Office of Fissile Materials
Disposition, HSS's Office of Independent Oversight, and the Chief of
Defense Nuclear Safety.
We conducted this performance audit from January 2009 to March 2010,
in accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe
that the evidence obtained provides a reasonable basis for our
findings and conclusions based on our audit objectives.
[End of section]
Appendix II: Extent to Which the MFFF Project‘s Schedule Used Key
Practices:
Practice: Capturing all activities;
Explanation: The schedule should reflect all activities as defined in
the program's work breakdown structure, including activities to be
performed by both the government and its contractors;
Rating: Fully;
GAO analysis: The project has provided evidence that the schedule
reflects both government and contractor activities, such as the
building and testing of software components, as well as key milestones
for measuring progress.
Practice: Sequencing activities;
Explanation: The schedule should be planned so that it can meet
critical program dates. To meet this objective, activities need to be
logically sequenced in the order that they are to be carried out. In
particular, activities that must finish prior to the start of other
activities (i.e., predecessor activities), as well as activities that
cannot begin until other activities are completed (i.e., successor
activities), should be identified. By doing so, interdependencies
among activities that collectively lead to the accomplishment of
events or milestones can be established and used as a basis for
guiding work and measuring progress. The schedule should avoid logic
overrides and artificial constraint dates that are chosen to create a
certain result;
Rating: Fully;
GAO analysis: Of the approximately 22,000 normal activities, all are
logically sequenced--that is, the schedule identifies
interdependencies among work activities that form the basis for
guiding work and measuring progress.
Practice: Establishing the duration of activities;
Explanation: The schedule should realistically reflect how long each
activity will take to execute. In determining the duration of each
activity, the same rationale, historical data, and assumptions used
for cost estimating should be used. Durations should be as short as
possible and have specific start and end dates. In particular,
durations of longer than 200 days should be minimized;
Rating: Mostly;
GAO analysis: Of the 22,000 normal activities, only 569 have durations
of over 200 days. In addition, the schedule includes 38 activities
with a remaining duration over 500 days and 10 activities with
remaining duration over 1,000 days (3.9 years).
Practice: Assigning resources to activities;
Explanation: The schedule should reflect what resources (e.g., labor,
material, and overhead) are needed to do the work, whether all
required resources will be available when needed, and whether any
funding or time constraints exist;
Rating: Mostly;
GAO analysis: Of the 22,000 normal activities, resources are placed on
3,124 of these, and 13,988 of these have no resources. However, the
program does have all resources captured in an alternate software
package. According to DOE, the current baseline reflects $2.2 billion.
Practice: Integrating activities horizontally and vertically;
Explanation: The schedule should be horizontally integrated, meaning
that it should link the products and outcomes associated with other
sequenced activities. These links are commonly referred to as
"handoffs" and serve to verify that activities are arranged in the
right order to achieve aggregated products or outcomes. The schedule
should also be vertically integrated, meaning that traceability exists
among varying levels of activities and supporting tasks and subtasks.
Such mapping or alignment among levels enables different groups to work
to the same master schedule;
Rating: Mostly;
GAO analysis: Due to concerns about total float values discussed below
in "identifying float between activities," the schedule has not fully
integrated key activities horizontally. The schedule has sufficiently
integrated key activities vertically.
Practice: Establishing the critical path for activities;
Explanation: Using scheduling software, the critical path--the longest
duration path through the sequenced list of key activities--should be
identified. The establishment of a program's critical path is
necessary for examining the effects of any activity slipping along
this path. Potential problems that might occur along or near the
critical path should also be identified and reflected in the
scheduling of the time for high-risk activities;
Rating: Fully;
GAO analysis: The project has established a number of critical paths
by using the scheduling software to identify activities with low or
zero float, as well as by identifying high-risk activities. Project
officials said that they conduct weekly meetings to keep track of
critical path activities.
Practice: Identifying the "float time" between activities;
Explanation: The schedule should identify float time--the time that a
predecessor activity can slip before the delay affects successor
activities--so that schedule flexibility can be determined. As a
general rule, activities along the critical path typically have the
least amount of float time. Total float time is the amount of time
flexibility an activity has that will not delay the project's
completion (if everything else goes according to plan). Total float
that exceeds a year is unrealistic and should be minimized;
Rating: Partially;
GAO analysis: The schedule contains 8,600 activities with total float
exceeding 400 days (1.5 years) and 669 activities with total float
exceeding 1,000 days (3.9 years). Many of the activities with large
total float values are tied to completion milestones, rather than to an
intermediate successor.
Practice: Performing a schedule risk analysis;
Explanation: A schedule risk analysis should be performed using
statistical techniques to predict the level of confidence in meeting a
program's completion date. This analysis focuses not only on critical
path activities but also on activities near the critical path, since
they can potentially affect program status;
Rating: Fully;
GAO analysis: Project officials conducted a schedule risk analysis
during the summer of 2009. This analysis was performed using
statistical techniques and focused on critical path and near-the-
critical-path activities. Officials said that this analysis has
provided important overall project risk information to management.
Practice: Monitoring and updating the schedule;
Explanation: The schedule should be continually monitored to determine
when forecasted completion dates differ from the planned dates, which
can be used to determine whether schedule variances will affect
downstream work. Individuals trained in critical path method
scheduling should be responsible for ensuring that the schedule is
properly updated. Maintaining the integrity of the schedule logic is
not only necessary to reflect true status, but is also required before
conducting a schedule risk analysis;
Rating: Fully;
GAO analysis: Project officials said that they update the schedule on
a weekly basis. In particular, project controls staff are associated
with each engineering group and provide a status update on a weekly
basis.
Sources: Shaw AREVA MOX Services, LLC (data); GAO (analysis).
Note: The ratings we used in this analysis are as follows: Based on the
documentation provided, "fully" means that the project fully satisfied
the criterion; "mostly" means that the project satisfied the criterion
to a large extent; "partially" means that the project satisfied the
criterion in part; "minimally" means that the project satisfied the
criterion to a minimal extent; and "not" means that the project did not
satisfy the criterion.
[End of table]
[End of section]
Appendix III: Extent to Which the WSB Project‘s Schedule Used Key
Practices:
Practice: Capturing all activities;
Explanation: The schedule should reflect all activities as defined in
the program's work breakdown structure, including activities to be
performed by both the government and its contractors;
Rating: Fully;
GAO analysis: The project's schedule reflects both government and
contractor activities, such as the building and testing of cementation
equipment, as well as key milestones for measuring progress.
Practice: Sequencing activities;
Explanation: The schedule should be planned so that it can meet
critical program dates. To meet this objective, activities need to be
logically sequenced in the order that they are to be carried out. In
particular, activities that must finish prior to the start of other
activities (i.e., predecessor activities), as well as activities that
cannot begin until other activities are completed (i.e., successor
activities), should be identified. By doing so, interdependencies
among activities that collectively lead to the accomplishment of
events or milestones can be established and used as a basis for
guiding work and measuring progress. The schedule should avoid logic
overrides and artificial constraint dates that are chosen to create a
certain result;
Rating: Mostly;
GAO analysis: Of 2,066 activities that are currently in progress or
have not yet started, 80 are not logically sequenced--that is, the
schedule does not identify interdependencies among work activities
that form the basis for guiding work and measuring progress.
Practice: Establishing the duration of activities;
Explanation: The schedule should realistically reflect how long each
activity will take to execute. In determining the duration of each
activity, the same rationale, historical data, and assumptions used
for cost estimating should be used. Durations should be as short as
possible and have specific start and end dates. In particular,
durations of longer than 200 days should be minimized;
Rating: Mostly;
GAO analysis: Ninety-eight of the 2,066 activities that are currently
in progress or have not yet started have durations of 100 days or
more. While durations should be as short as possible and have specific
start and end dates to objectively measure progress, project officials
provided a valid rationale for the duration of these activities.
Practice: Assigning resources to activities;
Explanation: The schedule should reflect what resources (e.g., labor,
material, and overhead) are needed to do the work, whether all
required resources will be available when needed, and whether any
funding or time constraints exist;
Rating: Fully;
GAO analysis: The schedule reflects $336 million in resource costs.
The project's cost baseline is $344 million. According to project
officials, they are aware of this discrepancy. They stated that while
all of the project resources are reflected in the schedule, a software
problem has caused some of these resources to not show up. Project
officials are working to correct this software problem.
Practice: Integrating activities horizontally and vertically;
Explanation: The schedule should be horizontally integrated, meaning
that it should link the products and outcomes associated with other
sequenced activities. These links are commonly referred to as
"handoffs" and serve to verify that activities are arranged in the
right order to achieve aggregated products or outcomes. The schedule
should also be vertically integrated, meaning that traceability exists
among varying levels of activities and supporting tasks and subtasks.
Such mapping or alignment among levels enables different groups to work
to the same master schedule;
Rating: Fully;
GAO analysis: Project officials provided evidence that the schedule is
sufficiently integrated.
Practice: Establishing the critical path for activities;
Explanation: Using scheduling software, the critical path--the longest
duration path through the sequenced list of key activities--should be
identified. The establishment of a program's critical path is
necessary for examining the effects of any activity slipping along
this path. Potential problems that might occur along or near the
critical path should also be identified and reflected in the
scheduling of the time for high-risk activities;
Rating: Fully;
GAO analysis: A critical path has been established. The critical path
dates are driven by the logic of the schedule.
Practice: Identifying the "float time" between activities;
Explanation: The schedule should identify float time--the time that a
predecessor activity can slip before the delay affects successor
activities--so that schedule flexibility can be determined. As a
general rule, activities along the critical path typically have the
least amount of float time. Total float time is the amount of time
flexibility an activity has that will not delay the project's
completion (if everything else goes according to plan). Total float
that exceeds a year is unrealistic and should be minimized;
Rating: Mostly;
GAO analysis: The schedule contains 1,482 activities that have a float
time of over 100 days. However, project officials provided a valid
rationale for having activities with large float times.
Practice: Performing a schedule risk analysis;
Explanation: A schedule risk analysis should be performed using
statistical techniques to predict the level of confidence in meeting a
program's completion date. This analysis focuses not only on critical
path activities but also on activities near the critical path, since
they can potentially affect program status;
Rating: Fully;
GAO analysis: Project officials stated that they conducted a schedule
risk analysis using statistical techniques in July 2008 on the
baseline schedule.
Practice: Monitoring and updating the schedule;
Explanation: The schedule should be continually monitored to determine
when forecasted completion dates differ from the planned dates, which
can be used to determine whether schedule variances will affect
downstream work. Individuals trained in critical path method
scheduling should be responsible for ensuring that the schedule is
properly updated. Maintaining the integrity of the schedule logic is
not only necessary to reflect true status, but is also required before
conducting a schedule risk analysis;
Rating: Fully;
GAO analysis: Project officials conduct weekly meetings to review and
update the project schedule.
Appendix IV: Summary Results of Interviews with 22 Utilities:
1. How much information have you heard or read about DOE's MOX fuel
program?
Response: A great deal of information;
Frequency: 1.
Response: Some information;
Frequency: 5.
Response: Very little information;
Frequency: 11.
Response: No information;
Frequency: 5.
[End of table]
2. Does your utility own any reactors that are compatible with AREVA
fuel designs?
Response: No;
Frequency: 2.
Response: Yes;
Frequency: 19.
Note: The numbers in the table do not total to 22 because one utility
elected not to respond to this question.
[End of table]
3. Taking into account your current reactor fleet, what is your
utility's current level of interest in participating in the MOX fuel
program? (Choose One):
Response: Not at all interested;
Frequency: 2.
Response: Not very Interested;
Frequency: 10.
Response: Somewhat interested;
Frequency: 8.
Response: Very interested;
Frequency: 1.
Response: Extremely interested;
Frequency: 1.
[End of table]
4. What kinds of reactors owned by your utility do you think would be
the most likely candidates for MOX fuel if your utility decided to
participate in the MOX fuel program? Please choose only one answer.
Response: BWR only;
Frequency: 2.
Response: PWR only;
Frequency: 13.
Response: Both;
Frequency: 7.
[End of table]
5. How important is this factor in your assessment of your utility's
current level of interest in participating in the MOX fuel program?
Response: Somewhat important;
Frequency: 3.
Response: Very important;
Frequency: 9.
Response: Extremely important;
Frequency: 10.
[End of table]
6. If DOE would sell MOX fuel to your utility at a 15% discounted price
relative to the market price for uranium fuel, what do you think your
utility's level of interest in participating in the MOX program would
be?
Response: Not at all interested;
Frequency: 2.
Response: Not very Interested;
Frequency: 7.
Response: Somewhat interested;
Frequency: 8.
Response: Very interested;
Frequency: 5.
[End of table]
7. If DOE would sell MOX fuel to your utility at a 25% discounted price
relative to the market price for uranium fuel, what do you think your
utility's level of interest in participating in the MOX program would
be?
Response: Not at all interested;
Frequency: 2.
Response: Not very Interested;
Frequency: 4.
Response: Somewhat interested;
Frequency: 8.
Response: Very interested;
Frequency: 4.
Response: Extremely interested;
Frequency: 4.
[End of table]
8. How important is this factor in your assessment of your utility's
current level of interest in participating in the MOX fuel program?
Response: Somewhat important;
Frequency: 5.
Response: Very important;
Frequency: 5.
Response: Extremely important;
Frequency: 12.
[End of table]
9. If DOE would cover the costs associated with reactor modifications
for compatibility with MOX fuel, what do you think your utility's level
of interest in participating in the MOX program would be?
Response: Not very interested;
Frequency: 2.
Response: Somewhat interested;
Frequency: 11.
Response: Very interested;
Frequency: 6.
Response: Extremely interested;
Frequency: 3.
[End of table]
10. How important are the costs associated with NRC licensing
requirements, in terms of monetary outlays and staff time, to your
utility's current level of interest in participating in the MOX fuel
program?
Response: Not very important;
Frequency: 2.
Response: Somewhat important;
Frequency: 5.
Response: Very important;
Frequency: 7.
Response: Extremely important;
Frequency: 8.
[End of table]
11. If DOE would cover the costs associated with obtaining NRC
licenses, what do you think your utility's level of interest in
participating in the MOX program would be?
Response: Not at all interested;
Frequency: 1.
Response: Not very interested;
Frequency: 2.
Response: Somewhat interested;
Frequency: 9.
Response: Very interested;
Frequency: 8.
Response: Extremely interested;
Frequency: 2.
[End of table]
12. Another factor that may affect your level of interest is the
ability to test the quality and safety of MOX fuel at your reactor. How
important is this factor in your assessment of your utility's current
level of interest in participating in the MOX fuel program?
Response: Not very important;
Frequency: 1.
Response: Somewhat important;
Frequency: 2.
Response: Very important;
Frequency: 4.
Response: Extremely important;
Frequency: 15.
[End of table]
13. If DOE offered to fund a demonstration program of MOX fuel at your
reactor, what do you think your utility's level of interest in
participating in the MOX program would be?
Response: Not at all interested;
Frequency: 2.
Response: Not very interested;
Frequency: 5.
Response: Somewhat interested;
Frequency: 5.
Response: Very interested;
Frequency: 6.
Response: Extremely interested;
Frequency: 3.
Note: The numbers in the table do not total to 22 because one utility
elected not to respond to this question.
[End of table]
14. Another factor that may affect your level of interest is DOE's
ability to ensure the timely delivery of MOX fuel (i.e. - Delivery
occurs at an interval that meets a reactor's needed timeline to prepare
prior to a refueling outage). How important is this factor in your
assessment of your utility's current level of interest in participating
in the MOX fuel program?
Response: Not very important;
Frequency: 1.
Response: Somewhat important;
Frequency: 1.
Response: Very important;
Frequency: 3.
Response: Extremely important;
Frequency: 17.
[End of table]
15. Another factor that may affect your level of interest is DOE's
ability to provide a compatible backup supply of uranium fuel as
assurance in case of delays in the delivery of MOX fuel. How important
is this factor in your assessment of your utility's current level of
interest in participating in the MOX fuel program?
Response: Not very important;
Frequency: 1.
Response: Somewhat important;
Frequency: 2.
Response: Very important;
Frequency: 8.
Response: Extremely important;
Frequency: 11.
[End of table]
16. Another factor that may affect your level of interest is the
storage of MOX fuel at your reactor site for longer than the interval
that meets a reactor's needed timeline prior to a refueling outage. How
important is this factor in your assessment of your utility's current
level of interest in participating in the MOX fuel program?
Response: Not at all important;
Frequency: 2.
Response: Not very important;
Frequency: 3.
Response: Somewhat important;
Frequency: 10.
Response: Very important;
Frequency: 4.
Response: Extremely important;
Frequency: 3.
[End of table]
17. Another factor that may affect your level of interest is public
opinion regarding the use of MOX fuel. How important is this factor in
your assessment of your utility's current level of interest in
participating in the MOX fuel program?
Response: Not at all important;
Frequency: 1.
Response: Not very important;
Frequency: 1.
Response: Somewhat important;
Frequency: 6.
Response: Very important;
Frequency: 9.
Response: Extremely important;
Frequency: 5.
[End of table]
18. DOE's MOX fuel program relies on annual Congressional
appropriations. Another factor that may affect your level of interest
is the consistency of funding for the program through 2033. How
important is this factor in your assessment of your utility's current
level of interest in participating in the MOX fuel program?
Response: Somewhat important;
Frequency: 2.
Response: Very important;
Frequency: 8.
Response: Extremely important;
Frequency: 12.
[End of table]
19. In addition to the factors described above, are there any other
factors or issues that we have not discussed that affected your
assessment of your utility's current interest in participating in the
MOX fuel program?
Open ended responses are not presented in this appendix.
20. How interested in participating do you think your utility would
have to be to actually submit such an expression of interest?
Response: Somewhat interested;
Frequency: 5.
Response: Very interested;
Frequency: 10.
Response: Extremely interested;
Frequency: 6.
Note: The numbers in the table do not total to 22 because one utility
elected not to respond to this question.
[End of table]
21. The MOX Fuel Fabrication Facility is expected to begin delivery of
MOX fuel in 2018 and continue supplying fuel through 2032. How
confident are you in DOE's ability to deliver MOX fuel on time
throughout this period?
Response: Not at all confident;
Frequency: 3.
Response: Not very confident;
Frequency: 11.
Response: Somewhat confident;
Frequency: 8.
[End of table]
22. How confident are you in DOE's ability to ensure that a compatible
backup supply of uranium fuel is delivered on time in the case of MOX
fuel delays?
Response: Not very confident;
Frequency: 4.
Response: Somewhat confident;
Frequency: 15.
Response: Very confident;
Frequency: 2.
Response: Extremely confident;
Frequency: 1.
[End of table]
23. How satisfied are you with the amount of outreach that MOX Services
and DOE have used to obtain interest in the MOX fuel program?
Response: Very dissatisfied;
Frequency: 1.
Response: Somewhat dissatisfied;
Frequency: 3.
Response: Neither satisfied nor dissatisfied;
Frequency: 14.
Response: Somewhat satisfied;
Frequency: 3.
Response: Very satisfied;
Frequency: 1.
[End of section]
Appendix V: Nuclear Regulatory Commission's Notices of Violation for
the MFFF:
NRC report date: October 30, 2009;
Description of violation: MOX
Services failed to ensure that design considerations were considered
during installation of structures;
Outcome: To be determined.
NRC report date: October 30, 2009;
Description of violation: MOX
Services' design control procedures did not require that the method of
design verification, or the results, be adequately documented when
design verifications were performed;
Outcome: To be determined.
NRC report date: October 30, 2009;
Description of violation: MOX
Services failed to provide a technical justification for an engineering
change request;
Outcome: To be determined.
NRC report date: October 30, 2009;
Description of violation: MOX
Services failed to include a sequential description of work to be
performed in implementing documents;
Outcome: To be determined.
NRC report date: September 11, 2009;
Description of violation: MOX Services failed to promptly identify,
evaluate, correct, and document conditions adverse to quality,
including incorrect placement of a floor and failure to document a
rebar deficiency in the corrective action program;
Outcome: MOX Services conducted a root cause analysis for the
conditions that led to each of the findings in NRC's September 11,
2009, inspection report and instituted actions, including improving
communications between engineering, construction, and quality control
personnel; adopting checklists for changes; and adding additional
training for engineering personnel. NRC stated that the actions
appeared adequate, and that it will verify implementation during later
inspections.
NRC report date: September 11, 2009;
Description of violation: MOX Services failed to perform quality-
affecting activities in accordance with approved drawings and
specifications;
Outcome: MOX Services conducted a root cause analysis for the
conditions that led to each of the findings in NRC's September 11,
2009, inspection report and instituted actions, including improving
communications between engineering, construction, and quality control
personnel; adopting checklists for changes; and adding additional
training for engineering personnel. NRC stated that the actions
appeared adequate, and that it will verify implementation during later
inspections.
NRC report date: September 11, 2009;
Description of violation: MOX Services failed to provide and adequate
documented justification for changes to final designs;
Outcome: MOX Services conducted a root cause analysis for the
conditions that led to each of the findings in NRC's September 11,
2009, inspection report and instituted actions, including improving
communications between engineering, construction, and quality control
personnel; adopting checklists for changes; and adding additional
training for engineering personnel. NRC stated that the actions
appeared adequate, and that it will verify implementation during later
inspections.
NRC report date: July 30, 2009;
Description of violation: MOX Services failed to correctly translate
applicable requirements into design documents;
Outcome: MOX Services initiated corrective actions to address these
issues.
NRC report date: May 11, 2009;
Description of violation: Suppliers were found to fail to meet a basic
NQA-1 requirement, indicating that MOX Services failed to ensure that
services were controlled to ensure conformance with specified
technical and QA requirements;
Outcome: NRC determined that MOX Services' oversight of its
contractors was acceptable, despite numerous examples of failures to
meet the QA requirements.
NRC report date: January 30, 2009;
Description of violation: Testing documentation for two separate tests
did not include the required information;
Outcome: MOX Services revised documentation procedure to include the
necessary information.
NRC report date: January 30, 2009;
Description of violation: On two separate occasions, the contractor
failed to incorporate an approved design change in project documents,
and later did not verify a field drawing, which resulted in failure to
identify that the drawing did not implement design requirements;
Outcome: MOX Services took steps to ensure that documentation was
appropriately revised, and added the design change into the corrective
action plan to initiate correction before concrete placement.
NRC report date: October 30, 2008;
Description of violation: NRC found that some design reviews did not
ensure that design inputs were correctly incorporated into field
drawings;
Outcome: MOX Services revised the design drawings to match the as-
built drawings after completing an analysis of the structure.
NRC report date: July 29, 2008;
Description of violation: Contractor failed to identify certain
conditions adverse to quality assurance plan requirements, including
those related to incorrectly poured concrete;
Outcome: MOX Services placed the matter into its corrective action
program and took steps to ensure adequate pouring of concrete.
NRC report date: April 30, 2008;
Description of violation: Contractor failed to take corrective action
for conditions adverse to quality, including providing adequate
resolution to justify the use of reinforcing steel splices that did
not meet industry standards;
Outcome: NRC reviewers concluded that MOX Services implemented
appropriate actions to control purchase of items from the reinforcing
bar vendor.
NRC report date: April 30, 2008;
Description of violation: Contractor failed to ensure that numerous
pieces of reinforcing bar met industry standards for bend radius;
Outcome: NRC reviewers concluded that MOX Services implemented
appropriate actions to control purchase of items from the reinforcing
bar vendor.
NRC report date: October 30, 2007;
Description of violation: NRC found that MOX Services had not followed
quality insurance procedures, including, for example, ensuring that a
vendor provided clear instructions for operating a concrete batch
plant, which resulted in improperly mixed concrete;
Outcome: MOX Services took over concrete testing and took corrective
actions, including revising procedures and bringing in independent
experts to make recommendations for improvement.
Source: NRC.
[End of table]
[End of section]
Appendix VI: Comments from the Department of Energy:
Department of Energy:
National Nuclear Security Administration:
Washington, DC 20585:
March 19, 2010:
Mr. Gene Aloise:
Director, Natural Resources and Environment:
U.S. Government Accountability Office:
Washington, D.C. 20458:
Dear Mr. Aloise:
The Department of Energy (Department) appreciates the opportunity to
review and provide comments to the Government Accountability Office's
(GAO) report, Nuclear Nonproliferation: DOE Needs to Address
Uncertainties with and Strengthen Independence Safety Oversight of Its
Plutonium Disposition Program, GA0-10-378. In response to a
Congressional Mandate, we understand that GAO performed this review to
assess the (1) status of the MOX Fuel Fabrication Facility (MFFF) and
Waste Solidification Building (WSB) construction projects with respect
to cost and schedule, (2) status of NNSA's plans to establish a pit
disassembly and conversion capability, (3) status of NNSA's plans to
obtain customers for mixed oxide (MOX) fuel from the MFFF, and (4)
actions that the Nuclear Regulatory Commission (NRC) and DOE have
taken to provide independent nuclear safety oversight of the two
projects.
The Department agrees with the report and the recommendations. One
conclusion GAO reached as a result of its nuclear utility survey was
that utility interest in MOX fuel is enhanced by the offering of
certain incentives: DOE compensation for utility reactor
modifications, license amendments and fuel testing, and price
discounts for MOX fuel relative to low enriched uranium fuel. NNSA
notes that all of these incentives have previously been offered to
utilities in two separate MOX Services Requests for Expressions of
Interest and discussed in numerous other interactions with nuclear
utilities.
Since the issuance of your report, NNSA and the Tennessee Valley
Authority have signed an interagency agreement to evaluate the use of
MOX fuel made from U.S. surplus weapons plutonium in TVA's Sequoyah
and Browns Ferry nuclear power reactors, a total of five large units.
Under the interagency agreement, TVA will perform work on nuclear core
design, safety analyses, environmental and reactor modification
assessments, and other related activities. NNSA is optimistic that
these studies will yield favorable results, and that other
institutional issues noted in GAO's report will be manageable. The
five TVA reactors could potentially use between 85 and 100 percent of
the output of the MFFF. The signing of the interagency agreement
indicates the Department's commitment to and success in working with
the utilities on the MOX projects.
We also note that some aspects of the results section do not recognize
actions that HSS has taken to strengthen its oversight of nuclear
facilities undergoing construction, major modification, or major
changes in mission and operations. We believe the GAO report should
more clearly distinguish between the level of Office of the Health,
Safety and Security (HSS) oversight and that of the Nuclear Regulatory
Commission.
Our responses to the recommendations below are:
1. Develop a plan for expanding the ARIES project at Los Alamos
National Laboratory (LANL)....
Expanding ARIES production is one of several options NNSA is
evaluating to provide feedstock to the MFFF prior to the start of pit
disassembly and conversion operations. Other options include: (1)
process additional material suitable for MFFF feedstock currently
under the jurisdiction of the Office of Environmental Management (EM)
at the Savannah River Site (SRS), (2) work with utilities
interested in irradiating MOX fuel as to the quantity and timing in
providing initial fuel deliveries, and (3) start up limited but
sufficient processes in the Pit Disassembly and Conversion project to
produce feedstock for MFFF.
NNSA's current production schedule calls for LANL to produce 50
kilograms of certified oxide by end of fiscal year (FY) 2010.
Subsequently, I,ANL must ramp up to a target rate of 300 kilograms per
year in FY 2012 and sustain this rate through FY 2017 in order to meet
the two metric ton mission. As a prudent measure, NNSA undertook a
study in May 2008 of various options for expanding the production of
plutonium oxide at the Los Alamos National Laboratory (ARIES).
However, until LANL demonstrates that they can produce 300 kilograms
per year and sustain this rate over an extended period of time, NNSA
considers further expansion of this potential risk mitigation
alternative to be premature.
2. Develop a technology maturation plan for the pit disassembly and
conversion mission....
NNSA agrees with the recommendation, but notes that in a previous
report issued by GAO in March 2007, Major Construction Projects Need a
Consistent Approach for Assessing Technology Readiness to Help Avoid
Cost Increases and Delays, GAO stated that:
"Specifically, the DOE project director for the Pit Disassembly and
Conversion Facility systematically measured and assessed readiness
levels for each component of the overall project."
While we were encouraged by this finding, we realize the need to
continue updating the technology maturation plan for the Pit
Disassembly and Conversion project as the development and testing
efforts progress. With this in mind, as the project prepares for
Critical Decision 1, Approve Alternative Selection and Cost Range, a
technology readiness assessment will be conducted and a new integrated
technology plan will be developed to assess all critical technologies
to be used in pit disassembly and conversion operations. This work
will be closely integrated with the project's cost and schedule
performance baseline and the risk management plan. All technology
development activities will be managed and controlled as part of the
integrated project schedule.
3. Conduct additional outreach activities....
NNSA agrees with this recommendation and is actively considering
changes in the contracting approach for the marketing and sales of MOX
fuel that would better align these efforts with customary nuclear fuel
market practices. In particular, NNSA is exploring marketing and sales
of MOX fuel to utilities through established nuclear fuel fabrication
vendors with substantial sales organizations and established
relationships with U.S. utilities. In addition, NNSA is creating a
backup inventory of low-enriched uranium (derived from down-blended
surplus highly enriched uranium) to serve as fuel supply assurance to
participating utilities in the event of delays in production of MOX
fuel.
4. The Secretary of Energy revise DOE Order 413.3A....
HSS agrees with the recommendation. The current version of DOE Order
413.3A provides for HSS participation, if so requested by the line
organizations. However, HSS has considerable expertise and experience
with best practices and common pitfalls in safety programs at the
Department sites, including construction activities. As GAO
recommends, it would be prudent for the Department to better use the HSS
expertise on project reviews and to modify DOE Order 413.3A to include
more definitive language about HSS participation on project reviews
for higher hazard nuclear facilities.
5. The Administrator of NNSA ensure that CDNS conducts oversight
activities....
NNSA agrees with this recommendation. Just recently, CDNS has been
able to obtain the necessary staffing to provide oversight to the
extent called for by the DOE order. However, there is no clear
exclusion of CDNS in the DOE Order 413.3A from oversight of facilities
regulated by the Nuclear Regulatory Commission (NRC). However, we are
working with the Department to have that exception inserted into the
Order during the upcoming revision of the Order. Historically there
was never an intention that CDNS would have responsibilities for
facilities for which the NRC is the regulator. That needs to be
clarified in the Order.
For your consideration, enclosed are other general/technical
corrections and minor suggestions to the report.
If you have any questions concerning this response, please contact
JoAnne Parker, Acting Director, Policy and Internal Controls
Management at 202-586-1913.
Sincerely,
Signed by:
Gerald L. Talbot, Jr.
Acting Associate Administrator for Management and Administration:
cc:
Deputy Administrator for Defense Nuclear Nonproliferation:
Senior Procurement Executive:
Acting Director, Office of Independent Oversight, IISS Office of
Environmental Management:
Enclosure:
[End of section]
Appendix VII: Comments from the Nuclear Regulatory Commission:
United States:
Nuclear Regulatory Commission:
Washington, D.C. 20555-0001:
March 18, 2010:
Mr. Eugene E. Aloise, Director:
Government Accountability Office:
441 G Street, NW:
Washington, DC 20548:
Dear Mr. Aloise:
In response to your request on February 19, 2010, the U.S. Nuclear
Regulatory Commission (NRC) staff has reviewed the draft report
entitled "Nuclear Nonproliferation: DOE Needs to Address Uncertainties
with and Strengthen Independent Safety Oversight of Its Plutonium
Disposition Program" (GAO-10-378), and provides the enclosed comments.
The NRC appreciates the opportunity to review and comment on the draft
report and looks forward to discussing any of the comments at your
request. Please feel free to contact our staff regarding the draft
report.
Sincerely,
Signed by:
R.W. Borchardt:
Executive Director for Operations:
Enclosure: As stated:
[End of section]
Appendix VIII: GAO Contact and Staff Acknowledgments:
GAO Contact:
Gene Aloise, (202) 512-3841 or aloisee@gao.gov.
Staff Acknowledgments:
In addition to the individual named above, Daniel Feehan, Assistant
Director; Steve Carter; Antoinette Capaccio; Tisha Derricotte;
Jennifer Echard; Jason Holliday; and Ben Shouse made key contributions
to this report.
[End of section]
Footnotes:
[1] Weapons-grade plutonium is plutonium with an isotopic ratio of
plutonium-240 to plutonium-239 of no more than 0.10. The pit is a key
nuclear weapon component that begins the chain reaction leading to a
nuclear explosion.
[2] This program is linked to a larger, international effort with
Russia. In 2000, the United States and Russia entered into a Plutonium
Management and Disposition Agreement, in which each country pledged to
dispose of at least 34 metric tons of surplus weapons-grade plutonium.
[3] GAO, Department of Energy: Major Construction Projects Need a
Consistent Approach for Assessing Technology Readiness to Help Avoid
Cost Increases and Delays, [hyperlink,
http://www.gao.gov/products/GAO-07-336] (Washington, D.C.: Mar. 27,
2007).
[4] These practices are found in GAO, GAO Cost Estimating and
Assessment Guide: Best Practices for Developing and Managing Capital
Program Costs, [hyperlink, http://www.gao.gov/products/GAO-09-3SP]
(Washington, D.C.: March 2009).
[5] In addition to the 34 metric tons of weapons-grade plutonium
pledged for disposal in 2000, the Secretary of Energy declared 9
metric tons of weapons-grade plutonium as surplus to defense needs in
September 2007. According to NNSA documents, NNSA plans to convert
this additional material into MOX fuel at the MFFF but has not made an
official decision.
[6] The K-Area Facility is SRS's only special nuclear material storage
facility designated for storage of significant quantities of plutonium
and highly enriched uranium materials. The facility's principal
operations building housed K Reactor, which produced nuclear materials
to support the United States for nearly four decades. The K Reactor
was shut down in 1992.
[7] [hyperlink, http://www.gao.gov/products/GA0-07-336].
[8] DOE, Office of Inspector General, National Nuclear Security
Administration's Pit Disassembly and Conversion Facility, DOE/IG-0688
(Washington, D.C.: May 3, 2005).
[9] DOE regulations (10 CFR pt. 830, app. A to subpt. B § (C)(2))
define three categories of high-hazard nuclear facilities according to
their potential to produce significant radiological consequences from
an event that could either extend beyond the boundaries of a DOE site,
remain within the boundaries of a site, or remain within the immediate
vicinity of a nuclear facility.
[10] Cost variances compare the earned value of the completed work
with the actual cost of the work performed. For example, if a
contractor completed $5 million worth of work (i.e., the earned value
of the work) and the work actually cost $6.7 million, there would be a
negative $1.7 million cost variance. Schedule variances are also
measured in dollars, but they compare the earned value of the work
completed with the value of work that was expected to be completed.
For example, if a contractor completed $5 million worth of work at the
end of the month but was budgeted to complete $10 million worth of
work, there would be a negative $5 million schedule variance.
[11] These practices are (1) capturing all activities, (2) sequencing
activities, (3) establishing the duration of activities, (4) assigning
resources to activities, (5) integrating activities horizontally and
vertically, (6) establishing the critical path for activities, (7)
identifying the float time between activities, (8) performing a
schedule risk analysis, and (9) monitoring and updating the schedule.
[12] GA0, Department of Energy: Contract and Project Management
Concerns at the National Nuclear Security Administration and Office of
Environmental Management, [hyperlink,
http://www.gao.gov/products/GAO-09-406T] (Washington, D.C.: Mar. 4,
2009).
[13] When we conducted our analysis in February 2009, the MFFF project
schedule contained 1,064 activities with durations of over 200 days.
According to our more recent analysis and interviews with project
officials, the MFFF project schedule now has about 30 activities with
durations of over 200 days.
[14] NNSA, Savannah River Site, Alternative Study: Pit Disassembly and
Conversion at the Savannah River Site (June 2009), a predecisional
draft for official use only.
[15] DOE, Savannah River Site, Alternative Study: Combining the Pit
Disassembly and Conversion Facility (PDCF) and Plutonium Preparation
Project (PuP) within the K-Area Complex (KAC) (November 2008), a
predecision draft, unclassified controlled nuclear information.
[16] According to NNSA officials, the majority of pit disassembly and
conversion processing lines will be installed on the ground level of
the facility. However, the project may also install a mezzanine level
in several areas to house support equipment and electrical cabinets.
[17] A glovebox is a sealed, protectively lined compartment having
holes to which are attached gloves for use in handling especially
dangerous materials inside the compartment.
[18] NNSA, Report on ARIES Throughput Options (May 2008), for official
use only.
[19] GA0, Nuclear Weapons: NNSA Needs to Establish a Cost and Schedule
Baseline for Manufacturing a Critical Nuclear Weapon Component,
[hyperlink, http://www.gao.gov/products/GAO-08-593] (Washington, D.C.:
May 23, 2008).
[20] NNSA, Plutonium Capacity Option Study (Nov. 19, 2009),
unclassified controlled nuclear information.
[21] Fuel-grade plutonium is plutonium with an isotopic ratio of
plutonium-240 to plutonium-239 of greater than 0.10 and less than 0.19.
[22] The Clemson Engineering Technologies Laboratory is a contract
research laboratory operated by Clemson University.
[23] Washington Group International, Inc., Unclassified Summary for
Technical Readiness of PDCF Processes (U) (Denver, Co: Nov. 10, 2008).
[24] NNSA, Final Report: Technical Independent Project Review for the
Pit Disassembly and Conversion Facility (PDCF) at the Savannah River
Site (Jan. 13, 2009), for official use only.
[25] LANL, Pit Disassembly and Conversion Integrated Design Support
and Test Plan (November 2007).
[26] A pressurized water reactor uses pressurized water to transfer
heat from the reactor core to the steam generator, which then produces
steam to turn the turbine generator.
[27] According to NNSA officials, the sale of MOX fuel over the course
of the program would return approximately $1.1 billion to the U.S.
Treasury, even with a discount relative to the price of uranium fuel.
This figure assumes that the price of uranium fuel will remain at
least at March 2009 levels; increases and decreases in uranium fuel
price would affect the amount of revenue from MOX fuel sales.
[28] NNSA officials told us that current plans are for the backup fuel
to be stored at the contractor's facility in the form of canisters. If
the backup fuel is needed, the canisters can be delivered to a
utility's fuel fabricator to be converted into reactor fuel assemblies.
[29] In a boiling water reactor, water moves through the reactor core
and becomes a water-steam mixture, after which the water is removed
and the steam is used to move the turbine generator.
[30] To quantify utilities' responses, we administered a structured
interview to utilities, in which we asked them identical questions and
requested that they select their answers from a series of set
responses.
[31] During our interviews, we only identified DOE as the party
offering potential incentives to simplify our questions.
[32] Specifically, we asked utility officials to estimate what their
interest in participating in the program would have to be to submit an
expression of interest to DOE.
[33] An NNSA official told us that, as of February 2010, MOX Services
is in discussions with a nuclear services company to market and sell a
portion of the MFFF's output. Under this agreement, the nuclear
services company would purchase a portion of the output of the MFFF
and then would be responsible for selling the fuel assemblies to
nuclear utilities. The company also would be responsible for marketing
MOX fuel to utilities. The NNSA official told us that he could not
specify when a contract between MOX Services and the company will be
presented to NNSA for approval, although it could occur at some point
in 2010. MOX Services is also holding exploratory discussions about
potential roles in marketing MOX fuel to U.S. utilities with the two
other commercial nuclear fuel fabrication and services companies that
operate in the United States.
[34] A red oil excursion is an explosive, runaway reaction that can
occur when organic solvents containing tributylphosphates come into
contact with nitric acid. While this reaction could occur during the
manufacture of MOX fuel, it is not specific to the MOX process.
[35] Brookhaven National Laboratory, Risk Assessment of Red Oil
Excursions in the MOX Facility (Upton, N.Y.: March 2007), for official
use only; Brookhaven National Laboratory, Risk Assessment of Red Oil
Excursions in the MOX Facility (Upton, N.Y.: August 2009), for
official use only.
[36] As we have previously described, one of these violations was
NRC's February 2008 findings and notice of violation related to
nonconforming reinforcing bars, which resulted in delays in the
schedule for the pouring of concrete during 2008.
[37] GAO, Nuclear Safety: Department of Energy Needs to Strengthen Its
Independent Oversight of Nuclear Facilities and Operations,
[hyperlink, http://www.gao.gov/products/GAO-09-61] (Washington, D.C.:
Oct. 23, 2008); and DOE, Office of Health, Safety, and Security,
Office of Environment, Safety, and Health Evaluations Appraisal
Process Guide (Washington, D.C.: July 2009).
[38] DOE established HSS in October 2006.
[39] DOE Order 413.3A defines a nonmajor project (other than an
environmental management project) as one with a total project cost of
less than $750 million.
[40] DOE, "Implementation of CDNS Responsibilities Regarding Safety in
Design and Construction of Nuclear Facilities" (CDNS M 413.3A).
[41] DOE, "DOE Standard: Integration of Safety into the Design
Process," DOE-STD-1189-2008 (Washington, D.C.: March 2008).
[42] GAO, GAO Cost Estimating and Assessment Guide: Best Practices for
Developing and Managing Capital Program Costs, [hyperlink,
http://www.gao.gov/products/GAO-09-3SP] (Washington, D.C.: March 2009).
[43] DOE, Office of Environmental Management, Technology Readiness
Assessment (TRA)/Technology Maturation Plan (TMP) Process Guide
(Washington, D.C.:) March 2008.
[End of section]
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