GAO Report Reveals $2 Billion Cost Jump for MOX

Just days after the Project On Government Oversight learned that the budget for the Mixed Oxide Fuel (MOX) facility at Savannah River Site in South Carolina would be slashed by 75 percent, a Government Accountability Office (GAO) report has revealed that the newest cost estimate from the National Nuclear Security Administration (NNSA) is $6.8 billion dollars. That’s two billion dollars more than was previously reported.

The NNSA hadn’t released an updated baseline for the MOX project in two years, and has yet to acknowledge the cost increase or explain why the price tag has grown by two billion just as the facility nears completion. The GAO released its High-Risk Series: An Update on February 14, which featured the brand new baseline cost for the MOX facility. It will be interesting to see if this ridiculous cost increase will be the push the Administration needs to zero the program out for good. If not, they will have to cut an extra $2 billion from their budget just to stay even.

The MOX facility is just one more in a long history of NNSA projects that end up grossly over budget and behind schedule. Another of NNSA’s ongoing “high-risk” projects is the new Uranium Processing Facility (UPF) currently under construction at Y-12 in Tennessee. The cost of UPF has increased from between $600 million and $1.5 billion in 2004 to the current estimate of between $4.2 billion and $6.5 billion.

The GAO report also references the Defense Nuclear Facilities Safety Board’s discovery late last year that the UPF would not be able to safely house the equipment needed to process bomb-grade uranium, one of the main missions for this building. This failing was found after years of work had already gone into the planning and design, and will require raising the roof by 13 feet in addition to thickening the walls and floor. In a FY2012 performance evaluation report for the site contractor, Babcock and Wilcox Technical Services Y-12, LLC, NNSA revealed that this design blunder will delay the project by another 13 months and add an additional $539 million to the cost.

These extremely dramatic and troubling cost increases were certainly on the mind of congressional members during the February 14 budget hearing for NNSA weapons activities. Rep. Pete Visclosky (D-Ind.), a twenty-year veteran of the Energy and Water Development, and Related Agencies Subcommittee, was particularly frustrated by the seemingly never-ending excuses. “People have been working on this for 20 years, three administrations, both political parties, and we’re still talking about, ‘We’re gonna get started.’ I mean, I got a whole list of projects, major construction projects, billions of dollars burned up in a hole in the ground. And I’m having the same hearing I’ve had for 15, 20 years. I’m just beside myself,” he said.

The NNSA’s decades-long habit of beginning construction on a facility before the designs are even finished hopefully isn’t going to fly much longer. These outrageous cost increases and design errors have long plagued the NNSA and it’s past time that they took a good, hard look at cost estimates and designs before breaking ground on any more multi-billion dollar boondoggles.

For now, the responsible thing for NNSA to do is to cut off life-support funding for any further MOX construction, and reprogram the remaining funds to begin implementing a viable plutonium disposition program. Furthermore, it is POGO’s hope that any future designs and cost estimates for the UPF at Y-12 will be thoroughly reviewed so no more multi-million dollar mistakes are made at the taxpayers’ expense.