Nuclear Waste:

DOE's Hanford Spent Nuclear Fuel Storage Project--Cost, Schedule, and Management Issues

RCED-99-267: Published: Sep 20, 1999. Publicly Released: Oct 21, 1999.

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Pursuant to a congressional request, GAO provided information on the Department of Energy's (DOE) efforts to improve the storage of spent nuclear fuel from its nuclear reactors at DOE's Hanford Site in Washington State, focusing on: (1) its status; (2) what problems might affect achieving cost and schedule estimates; and (3) whether changes have been sufficient to address management weaknesses.

GAO noted that: (1) although DOE has increased confidence that the project eventually will begin to remove fuel from the water storage basins, uncertainty remains over when the project will be finished and how much it will cost; (2) completion is scheduled for July 2007 at a cost of $1.7 billion--about 6 years and $1 billion beyond the original estimates made in 1995; (3) however, the new completion date includes $133.5 million and about 2 years for work activities not included in the original estimate; (4) compared with conditions that GAO reported on in May of last year, the amount of progress is substantial, with considerable construction completed and equipment installation under way; (5) since the schedule was established in December 1998, the estimated date for completing safety documentation has slipped, operational readiness issues have become major challenges, and most of the extra time built into the schedule for addressing contingencies has already been used up; (6) DOE's contractors have addressed the three main problems that existed earlier in the project--an unrealistic schedule, poor control over the project's baseline, and unresolved technical issues--but still have several matters to resolve before being able to provide assurance that cost and schedule estimates can be met; (7) the time required to reassess the procedures for removing loaded fuel-shipping casks from the basins and the compressed schedule to complete safety documentation and pass readiness reviews place in jeopardy a project milestone to begin removing fuel from the first storage basin by November 2000; (8) to process the fuel within the project's completion dates and cost targets, DOE and its contractors must ensure the reliability of complex one-of-a-kind equipment that has not yet been operated as a system; (9) DOE's contractor must also overcome challenges in hiring operations staff and in processing the spent fuel at a rate that can meet the project's milestones; (10) corrective actions have addressed some but not all of the management weaknesses on the project; and (11) although DOE's contractor responsible for overall management of the Hanford Site has consolidated its control over the project and made other changes to strengthen the project's performance, it has been slow to address problems with safety documentation and quality assurance.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: DOE appointed a permanent project director, effective September 29, 1999.

    Recommendation: To ensure that the Department of Energy provides effective leadership and oversight to the project, the Secretary of Energy should immediately take steps to permanently fill the positions of the key day-to-day managers that oversee the project.

    Agency Affected: Department of Energy

  2. Status: Closed - Implemented

    Comments: In December 1999, appropriate DOE offices formalized the implementation of quality assurance requirements for the canisters and baskets which should minimize the long term packaging costs and increase the likelihood of eventually shipping the fuel to the repository.

    Recommendation: In addition to establishing a continuity of DOE leadership during this critical time, the Secretary of Energy should take steps to ensure that the Hanford spent fuel project is completed as efficiently and effectively as possible by clarifying the quality assurance standards to be applied to the fuel containers and baskets to minimize the long-term costs of packaging and eventually shipping the fuel to a repository.

    Agency Affected: Department of Energy

  3. Status: Closed - Implemented

    Comments: Contract incentives for FY2000 emphasize the importance of beginning to move the fuel from the basins. Contract incentives for FY2001 emphasize fuel movement but also focus on rewarding operational efficiencies.

    Recommendation: In addition to establishing a continuity of DOE leadership during this critical time, the Secretary of Energy should take steps to ensure that the Hanford spent fuel project is completed as efficiently and effectively as possible by ensuring that the contractor's performance incentive fees contain the proper balance between the incentives to achieve the interim milestone to begin moving spent fuel and the incentives to achieve efficiencies during the operational period of the project.

    Agency Affected: Department of Energy


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