The “mammoth” cost overruns of the Mixed Oxide Fuel Fabrication Facility Project, Salt Waste Processing Facility and other major DOE capital projects is confounding lawmakers and possibly jeopardizing the completion of multibillion-dollar projects.
In two panel sessions before a U.S. House Appropriations subcommittee Wednesday, testimony cited outdated organizational strategies, increased material prices and equipment design problems as the reasons for ballooning project costs – including a new $7.7 billion MOX Project baseline.
Highlighting the testimony was a report from David Trimble of the Government Accountability Office.
The report states that the National Nuclear Security Administration’s MOX Project’s $4.9 billion original cost will increase to $7.7 billion, and it will not be operational until November 2019, three years later than planned.
“I look around at all of the departments, I’ve never seen it at the VA, at HUD, at NASA … these (overruns) are mammoth,” said ranking member Rep. Marcy Kaptur, D-Ohio. “What can we do on these projects … if indeed we are going to complete them?”
The MOX plant has been rumored to be facing a significant reduction in funding in the FY14 budget, with numbers as high as a 75 percent cut suggested. Tom Clements of Friends of the Earth stated last week that such a cut would mean the end of MOX.
But MOX was not the only project under fire for cost overruns and not even the only project at SRS.
“EM’s (Environmental Management) second largest construction project is the Salt Waste Processing Facility (SWPF), which will process 31 million gallons of the liquid radioactive waste inventory at (SRS),” testified Jack Surash of DOE-EM. “SWPF is experiencing cost overruns and schedule delays.”
Kaptur and House Energy and Water subcommittee chair Rodney P. Frelinghuysen, R-N.J., expressed great frustration with all of the large DOE projects.
“It’s inexcusable, these cost overruns,” Frelinghuysen said during the hearing. “Someone should have known what the hell was going on.”
Robert Raines of NNSA and Surash of EM, both of whom work in their Acquisition and Project Management divisions, stated that the original baseline cost for several projects were derived using a method that has since been rejected. MOX, SWPF and other facilities had their ultimate cost estimated using overly “optimistic” principles, Raines said.
“Specifically, the design for the facility was not sufficiently complete to develop an accurate and credible cost estimate,” he testified.
Initiated over 10 years ago, long before DOE instituted new “rigorous contract and project management processes,” it was stated by several that testified that these inaccurate cost baselines would not have been offered.
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