March 17, 2014

IS DOE GIVING UP ON 2015 START-UP FOR SAVANNAH RIVER SWPF?

By ExchangeMonitor

The Department of Energy may be close to giving up on plans to have the Savannah River Site’s Salt Waste Processing Facility begin operation in late 2015, WC Monitor has learned. Yesterday, a team of DOE officials from Savannah River, led by SWPF Federal Project Director Tony Polk, briefed Deputy Secretary of Energy Daniel Poneman on the status of the project and reportedly advised against trying to secure the additional $130 million that Parsons, the contractor for the SWPF, has said is necessary in Fiscal Year 2013 to ensure the facility can begin operations by October 2015. The DOE Savannah River officials also briefed Poneman on several contract options for the project going forward, including possibly instituting some form of cost cap, WC Monitor has learned.

In its FY 2013 budget request, which was largely developed last year and sent to Congress in February, DOE asked for approximately $22.5 million intended to wrap up construction work at the SWPF, and approximately $58 million in funds for other project costs tied largely to commissioning and startup activities. In March of this year, though, Parsons submitted to DOE a revised estimate-at-completion for the project that put the cost of the SWPF at approximately $1.78 billion, an increase of more than $400 million from previous estimates. Parsons’ revised estimate tied the cost increase primarily to the lengthy delay experienced in the delivery of the set of 10 large vessels—a critical component of the SWPF—as well as subsequent productivity impacts. All 10 vessels have since been delivered, with the last four arriving at Savannah River and installed earlier this month. If the $130 million funding shortfall projected for next year is not addressed, the projected cost increase for the SWPF could go up from the approximately $440 million contained in Parsons’ revised estimate to significantly more than $500 million.

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