No News on the Uranium Processing Facility May Be Good News

By Lydia Dennett | Filed under analysis | October 28, 2014

Government officials remain tight lipped about future plans for the proposed Uranium Processing Facility (UPF), aka the Uranium Capabilities Replacement Project, a building that has spent nine years languishing in design purgatory. But as cost-saving alternatives are explored, no news may be good news.

The UPF is a facility planned to replace several buildings performing work involving uranium at theY-12 National Security Complex. Expected to cost between $600 million and $1 billion in 2005, estimates for the project now range between $6.5 billion and $19 billion. Part of the reason for this cost increase was a design flaw found in late 2012 that would have resulted in a building that could not have fit the equipment needed to perform its mission; as a result they needed to change the design to raise the ceiling by 13 feet and thicken the walls and flooring accordingly. This space/fit issue, found seven years into the design process, will add $540 million to the design cost alone. Partly because of this screw-up, the National Nuclear Security Administration (NNSA) denied the contractor $5 million out of the $5.7 million award fee (essentially a performance bonus) in 2012; however, the same contractor continues to manage the project, according to the Government Accountability Office.

The ongoing difficulties and setbacks with this project have prompted several reviews, both internal and external. Earlier this year the National Nuclear Security Administration (NNSA) formed a “Red Team” of internal experts to suggest alternatives to the planned “big box” UPF design. One of the suggestions in the Red Team’s report was similar to recommendations the Project On Government Oversight had made in our 2013 report on the UPF, specifically to utilize existing facilities at Y-12 and build smaller, modular facilities if necessary.

Furthermore, the House and Senate Appropriations committees included a mandate in the Fiscal Year 2013 National Defense Authorization Act to require the GAO to periodically review the UPF project. The GAO released its fourth report this month, which focuses on progress the NNSA has made since the design flaw was discovered and its integration of lessons learned.

While the report did not go into specific details about how the NNSA will move forward with the future design of UPF or how it will integrate the Red Team’s suggestions, the GAO confirmed that the NNSA is “reevaluating its approach.” The GAO further stated that this reevaluation will incorporate a strategy that will identify “existing infrastructure as a bridging strategy until replacement capability is available in new infrastructure.”

This is an important step in the right direction which will hopefully prevent this project from continuing to increase in cost.

The GAO also reported on several factors that the NNSA determined contributed to the space/fit design flaw, including a lack of staff conducting efficient oversight of the project. “NNSA determined that it did not have adequate staff to perform effective technical oversight of the project, and requests and directives from NNSA to the UPF contractor were not always implemented because NNSA did not always follow up.”

While the NNSA has now increased the number of oversight staff, from 9 in 2012 to over 50 in 2014, it is astounding that this wasn’t done sooner, particularly because this oversight issue was brought to the attention of NNSA leadership seven years ago: In August 2007, the Defense Nuclear Facility Safety Board sent a letter to then-NNSA Administrator Thomas D’Agostino raising concerns that the staff level would not be able to provide effective oversight of such a large project. In April 2012, the Board sent another letter to D’Agostino reiterating its concerns that the project remained understaffed and “additional resources are required for adequate oversight of the UPF project.”

The NNSA claims that it is now addressing this as well as other issues that contributed to the design problems with UPF, and is integrating lessons learned into other ongoing projects. It is POGO’s hope that NNSA’s claims are more than just lip service and that real changes will be made to the way the NNSA manages its programs.

The NNSA still hasn’t made a definitive statement on the future of UPF or uranium processing operations at Y-12, but in this case perhaps no news is good news.