Kenneth Fletcher
NS&D Monitor
5/30/2014
The Mixed Oxide Fuel Fabrication Facility project has been "largely unsuccessful" in controlling project cost and schedule, according to a DOE Inspector General’s Office report released this week that includes several recommendations for a path forward. Rising costs prompted DOE earlier this year to announce plans to put the project into "cold standby" while it assesses alternatives for plutonium disposition. The cost and schedule was "significantly underestimated" due to numerous factors, the IG report states. "This included, most prominently, the Department’s 2007 approval of a project baseline that was developed from an immature design, understating the level of effort to install various construction commodity items, and high personnel turnover rates," the report states.
The MOX project was launched to dispose of 34 metric tons of surplus plutonium under an agreement with Russia, but cost concerns have helped to lead DOE to assesses alternatives for plutonium disposition—a review that is expected to be complete in 12 to 18 months. While a 2007 baseline for MOX came in at $4.8 billion with a 2016 completion date, that was pushed out to $7.7 billion and 2019 in a review completed by contractor Shaw AREVA MOX Services two years ago. "Considering the problems experienced by NNSA and MOX Services in controlling cost and schedule to date, we remain concerned as to whether the estimated cost and completion date for the MOX Facility and the plutonium metal oxidation capability are achievable," the IG report states.
Effort and Materials Underestimated
Construction on the MOX plant began before it’s design was found to be 90 percent complete, which DOE has said is now the standard for construction projects going forward. Cost increases were largely due to underestimating the effort and materials needed to complete the project, according to the IG. "The estimated amount of effort needed to install piping was increased by 26 percent, the estimated amount of effort needed to install valves was increased by 30 percent, duct work installation efforts were increased by 300 percent, and cable installation rates were increased by up to 151 percent," the IG report says that MOX Services reported in a baseline change proposal, which also stated that "assumptions regarding the availability of qualified equipment fabricators, suppliers and subcontractors capable of working under a nuclear quality assurance environment were incorrect." The cost of engineered equipment was also underestimated.
Addition of Feedstock Capability Upped Costs
Additionally, project costs increased by about $262 million after the addition to the baseline of a plutonium metal oxidation capability to the MOX facility to provide feedstock to the plant, according to the IG. The change was made after the National Nuclear Security Administration cancelled plans to build a standalone facility to prepare feedstock. "According to NNSA, the conceptual design for the metal oxidation systems is about 80 percent complete. As of January 2014, no formal decision had been made on whether or not to move forward with a plutonium metal oxidation capability," the report states.
The report contained several recommendations for DOE moving forward. For example, once the plutonium disposition alternatives assessment is completed, MOX Services should develop a new baseline change proposal that incorporates the results of the assessment, the IG recommended. The NNSA said in a management response that it plans to do so once the assessment is complete. DOE should also request approval of a new MOX baseline "only after all assumptions have been reviewed for reasonableness, the baseline change proposal is independently reviewed, and all necessary corrective actions are taken," the IG recommended—another point NNSA agreed to. And in a third recommendation, NNSA should apply the 90 percent design complete review policy to the metal oxidation capability, which DOE also said it plans to do.
