Nuclear Waste:

Hanford's Well-Drilling Costs Can Be Reduced

RCED-93-71: Published: Mar 4, 1993. Publicly Released: Apr 5, 1993.

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Pursuant to a congressional request, GAO reviewed the Department of Energy's (DOE) well-drilling program at its Hanford site, focusing on: (1) DOE and contractors' actions to reduce well-drilling costs; and (2) opportunities for additional cost savings.

GAO found that: (1) well installation costs could be lowered by using more efficient drilling methods; (2) DOE directed its contractors to study drilling cost reductions and set a goal for its drilling contractor to lower drilling costs by 10 percent over a 6-month period in 1991; (3) the contractors' April 1991 report recommended 104 specific ways to reduce drilling costs or improve efficiency; (4) although the implemented recommendations reduced drilling costs, the savings were offset by other factors, and the drilling contractor did not meet its 10-percent cost reduction goal; (5) faster drilling methods, particularly in noncontaminated areas, would reduce costs without jeopardizing safety or sampling standards; (6) the management contractor field-tested two faster drilling methods that could reduce costs by 33 percent and 40 percent respectively; (7) DOE has not developed a plan for determining which drilling technology to use or where to use it; (8) efficient use of well-drilling staff, such as cross-training in multiple tasks and changing work crews' composition and duties, would reduce costs, but this would involve sensitive labor relations discussions; and (9) consolidation of management responsibilities into one project would reduce costs by eliminating duplication, uncoordinated planning, and oversight by more than one DOE office.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: DOE has evaluated various alternative well-drilling technologies and approved several for use as appropriate. DOE has just awarded a contract which provides for use of various drilling technologies including air rotary and sonic.

    Recommendation: The Secretary of Energy should direct the Manager, Richland Field Office, to expedite the evaluation of alternative well-drilling technologies and, in the interim, require its contractors to select the most cost-effective technology, consistent with safety standards, for use at each well being drilled at Hanford.

    Agency Affected: Department of Energy

  2. Status: Closed - Implemented

    Comments: The award of the Environmental Restoration Management Contract to Bechtel Hanford Company gives the company maximum flexibility to procure drilling and other services on a competitive basis. The contract also gives Bechtel maximum flexibility to adjust worker skill mixes providing a greater incentive for bargaining units to be more cost-effective.

    Recommendation: The Secretary of Energy should direct the Manager, Richland Field Office, to direct its contractors to negotiate with representatives of the Hanford work force to allow more effective use of well-drilling staff.

    Agency Affected: Department of Energy

  3. Status: Closed - Not Implemented

    Comments: With the new DOE directed effort to manage parts of the cleanup as Major Systems Acquisitions, well-drilling is now viewed as a support function providing services to individual projects. In addition, Bechtel's new Environmental Restoration Management Contract provides the flexibility to procure the most cost-effective drilling available. Bechtel, therefore, may not choose to use a centralized Hanford service organization.

    Recommendation: The Secretary of Energy should direct the Manager, Richland Field Office, to simplify the organizational structure, put a single DOE official in charge of well-drilling decisions, and assign project status to well drilling. In addition, the DOE project manager should have the necessary authority to centralize contractor management to ensure efficient operation of the project.

    Agency Affected: Department of Energy

 

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