Rather than reducing schedule delays and expense overruns, the Energy Department’s use of a cost cap at the Separations Process Research Unit (SPRU) cleanup project in upstate New York might have had the opposite effect, DOE’s Office of Inspector General said in an audit released Wednesday.
The Energy Department in February 2011 instituted what was essentially a $125 million limit on its financial responsibility and agreed with contractor URS to a completion date of December 2011 for work at the onetime research site on chemical separation of plutonium and uranium.
“Federal officials believed that, after the Department was no longer reimbursing D&D [decontamination and decommissioning] costs, the contractor worked at a slower pace than previously planned in an effort to conserve its monthly cash flow,” the IG said in the report dated March 23.
The contract’s cost to the department had risen to $180 million as of January 2018, due in part to changes in the scope of work, according to the audit.
Michelle Anderson, the deputy inspector general for audits and inspections, recommended DOE consider alternatives to meet schedule targets, such as milestone-based financial penalties. In his formal response for the DOE Office of Environmental Management, James Owendoff, principal deputy assistant secretary for environmental management, said the office will look at such options.
In December 2007, DOE awarded a $67 million cost-plus contract to URS Energy & Construction, which is now part of AECOM. The agreement called for the contractor to tear down and remove the SPRU buildings and equipment, dispose of resulting waste, and return the property at the Knolls Atomic Power Laboratory to the department’s Office of Naval Reactors. The target for completion was November 2011.
But the SPRU project encountered a number of bad breaks, including a 2010 radiological release and a 2011 hurricane that contributed to mudslides and delayed key decontamination and disposal operations for 16 months.
