Absence of Key Management Reforms on Hanford's Cleanup Project Adds to Challenges of Achieving Cost and Schedule Goals
GAO-04-611: Published: Jun 9, 2004. Publicly Released: Jul 9, 2004.
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The Department of Energy's (DOE) Hanford Site in Washington State houses DOE's largest and most complex nuclear cleanup project--treating and preparing for disposal 55 million gallons of high-level radioactive waste. In 2000, DOE awarded an 11-year, $4.3 billion contract to design, construct, and test treatment facilities at Hanford. GAO was asked to review (1) efforts to accelerate the project's completion, (2) implementation on this project of agencywide management reforms, and (3) the challenges resulting from any unimplemented reforms.
DOE's initial approach called for treating 10 percent of the site's high-level waste by 2018 and for operating the plant until treatment was completed in 2046--well past a regulatory deadline to complete treatment by 2028. In 2002, DOE decided to accelerate cleanup by about 20 years and reduce the project's $56 billion cost by $20 billion. In the short term, however, several factors, including the accelerated approach and contractor performance problems, have lengthened construction time and raised contract costs by $1.4 billion to $5.7 billion. Because of long-standing problems that preceded Hanford's contract, DOE has instituted reforms in both contract and project management. DOE's 2000 Hanford contract implemented the contract performance reforms, including linking contractor fees to cost and schedule performance. The contract did not, however, implement project management reforms, such as an overall plan to accomplish waste treatment by the regulatory deadline. Not implementing project management reforms at the outset has added to the risks in cleaning up Hanford's tank waste. First, to start quickly, DOE committed to a "fast-track" process in which design, technology development, and construction are performed concurrently on different aspects of the project. For projects of Hanford's complexity, this approach is not compatible with controlling costs and schedules. Second, DOE has delayed completing analyses needed to determine the most cost-effective approach to waste separation and may have missed savings opportunities of at least $50 million a year. Third, DOE has not adequately defined or communicated the potential effects of a legal challenge to its overall plan for minimizing how much high-level waste is disposed of in an underground repository. Unless effectively managed, an adverse legal outcome could increase project costs by tens of billions of dollars.
Recommendations for Executive Action
Status: Closed - Implemented
Comments: DOE is following its project management order and implementing guidance more closely when acquiring complex nuclear waste treatment facilities at Hanford and other DOE sites. In late August 2005, the Secretary of Energy instructed all program offices to follow DOE's order "scrupulously, without exception." However, DOE continued to use a fast-track, design-build approach for the project. By 2006, the project faced a number of technical problems, the cost estimate had risen to over $10 billion, and the schedule had been delayed by 6 years. In an April 2006 testimony before the House Appropriations Subcommittee on Energy and Water Development, we pointed out that DOE's use of a fast-track, design-build approach in its design and construction of the Hanford waste treatment plant had continued to result in problems facing the project. We again recommended that DOE discontinue using a fast-track, design-build approach on the project. On September 8, 2006, DOE sent a letter accepting our recommendation and stated it would discontinue using a fast-track, design-build approach to completing the project. DOE acknowledged that the use of this approach had been a weakness on the project. DOE stated that it would widen the time frame between design and construction to at least 1 year or longer before resuming construction on major facilities. Based on subsequent reviews of the waste treatment plant and other major DOE projects, DOE has discontinued the fast-track, design-build approach for complex, first-of-a-kind facilities.
Recommendation: The Secretary of Energy should follow more closely DOE's project management order and implementing guidance when acquiring complex nuclear waste treatment plants at Hanford and other DOE sites, especially by avoiding a fast-track, concurrent approach to the design, technology development, construction, and testing of such plants.
Agency Affected: Department of Energy
Status: Closed - Not Implemented
Comments: As of March 31, 2008, DOE stated that the legal landscape shaping DOE's options for disposal of high-level tank waste at Hanford are still being defined. DOE stated that since GAO's recommendation would cost considerable time and effort, DOE believes that it is prudent to wait until the remaining legal uncertainty at Hanford is clarified. DOE expects further clarification before waste treatment begins in Washington State, therefore does not expect further action on this recommendation.
Recommendation: The Secretary of Energy should develop and provide to Congress a plan that includes an estimate of the costs and time frames needed to treat and dispose of Hanford's and the rest of DOE's high-level tank wastes if the current court ruling is upheld and if a majority of DOE's tank wastes must be disposed of in a high-level waste repository.
Agency Affected: Department of Energy