	Background

This section describes (1) WIPP’s layout and base operations, (2) the  February 2014 truck fire and radiological release accident investigation  reports, (3) DOE’s requirements for operations activities and for project  management applicable to the WIPP Recovery effort, (4) best practices  for cost and schedule estimating, (5) best practices for conducting an  AOA, (6) Revisions in 2014 and 2015 to DOE’s requirements for AOAs,  and (7) DOE’s AOA process for WIPP’s new permanent ventilation  system. The  process entails identifying, analyzing, and selecting a preferred  alternative. Selecting a preferred alternative. Later, in June 2015, the Secretary of Energy directed the  department to develop guidance for conducting AOAs consistent with the  AOA best practices that GAO has published. A DOE official told us in  June 2016 that the department expected the guidance to be completed by  December 2016. DOE Did Not Meet Its Initial Cost and Schedule Estimates for Restarting Waste Disposal Operations

DOE did not meet its initial cost and schedule estimates for the efforts  needed to restart WIPP disposal operations, resulting in about $64 million  in added costs and a delay of nearly 9 months. Specifically, in January 2016, approximately a year after approving the  initial project baseline, DOE approved a new project management  baseline that increased the estimated costs for the recovery project by $2  million (from $242 million to $244 million) and added 8.5 months to the  project schedule, extending the date when limited waste disposal  operations might begin from March 2016 to December 2016. In December 2015, DOE  received $192.1 million for fiscal year 2016 base operations, an increase  of $61.6 million (47 percent) over the initial estimate for base operations  in fiscal year 2016. DOE partially met best practices for a credible schedule, in  particular, because its schedule did not include extra time, or  contingency, to account for known project risks. However, according to DOE  officials, they did not follow other best practices. DOE did not follow all best practices in developing the initial cost and  schedule estimates for the WIPP recovery project or in developing new  estimates because, unlike DOE’s requirements for capital asset projects  under Order 413.3B, DOE’s EM operations activities protocol that  governs cleanup operations such as WIPP recovery does not require the  use of best practices in developing such estimates. Without having followed all best practices, including having an  independent cost estimate conducted to validate the estimates, DOE  cannot be confident that NWP sufficiently accounted for these challenges  in revising its risk analysis and that DOE set an appropriate allowance for  contingency to reduce the risk of cost overruns and delays in restarting  WIPP’s operations. DOE Did Not Follow All Best Practices in Analyzing and Selecting an Alternative for the New Ventilation System at WIPP

DOE did not follow all best practices in analyzing and selecting an  alternative for the new ventilation system at WIPP. As a result, DOE’s  analysis was not reliable and DOE cannot be confident that the selected  alternative will best provide the needed capabilities. NWP and Trinity identified a broad range  of alternatives. Most notably, DOE and its contractors did not follow the  best practice to select the alternatives based on a cost-benefit analysis  and only partially followed the best practice to independently review the  AOA process, as follows:
Regarding cost-benefit analysis, DOE and its contractors did not  select the alternatives based on such an analysis which compares the  life-cycle costs and benefits or effectiveness of each alternative. Specifically, an independent  review conducted by DOE’s Office of Project Management Oversight  and Assessments found that the project team did not adequately  document a cost-benefit analysis and that, as a result, the selection of  the preferred alternative was not supported by compelling information. By  not implementing the recommendation from the independent review to do  a cost-benefit analysis or not justifying and documenting the reason for  not doing so, DOE cannot provide assurance that the final alternative  selected would best provide the capabilities needed at WIPP. DOE did not develop its  estimates for WIPP recovery following best practices, in part because  DOE does not require its cleanup operations activities, such as WIPP, to  follow them. This lack of a requirement is in contrast to a new policy put  into effect in June 2015 by the Secretary of Energy, which established the  requirements that DOE develop cost and schedule estimates for its  capital asset projects following best practices—such projects include the  new permanent ventilation system at WIPP. By also requiring cleanup operations to follow best practices,  DOE would have more confidence in the estimates for its cleanup  operations activities and its capital asset projects. In addition, the report includes a  breakout of the cost increase. Appendix I: Objectives, Scope, and Methodology

Our report examined the extent to which the Department of Energy (DOE)  (1) met its initial cost and schedule estimates for restarting waste disposal  operations at the Waste Isolation Pilot Plant (WIPP) and (2) followed best  practices in analyzing and selecting an alternative for the new ventilation  system. Overall, DOE’s AOA process fully met the category  for identifying alternatives and partially or minimally met the other three  categories of best practices—general principles, analyzing alternatives,  and selecting the preferred alternative.
Why GAO Did This Study

DOE's WIPP is the only deep geologic repository for the disposal of U.S. defense-related nuclear waste. In February 2014, waste operations were suspended following a truck fire and an unrelated radiological release. DOE estimated in February 2015 that it would complete recovery activities and restart limited waste operations by March 2016. To resume full operations, DOE planned to build a new ventilation system at WIPP. DOE completed an AOA to identify the best solution for this system in December 2015.
The Senate Report accompanying a bill for the National Defense Authorization Act for Fiscal Year 2015 included a provision for GAO to review WIPP operations. This report examines the extent to which DOE (1) met its initial cost and schedule estimates for restarting waste disposal operations, and (2) followed best practices in analyzing and selecting an alternative for the new ventilation system. GAO examined documentation on the WIPP recovery estimates. GAO compared DOE's February 2015 cost and schedule estimates and AOA with best practices GAO published.

What GAO Found

The Department of Energy (DOE) did not meet its initial cost and schedule estimates for restarting nuclear waste disposal operations at the Waste Isolation Pilot Plant (WIPP), resulting in a cost increase of about $64 million and a delay of nearly 9 months. DOE incurred this cost increase and delay partly because it did not follow all best practices in developing the cost and schedule estimates. In particular, DOE's schedule did not include extra time, or contingency, to account for known project risks. Instead, DOE estimated it would restart waste operations in March 2016 based on a schedule with no contingency that gave DOE less than a 1 percent chance of meeting its restart date. In January 2016, DOE approved new estimates that added 8.5 months to the schedule, extending the restart to December 2016; increased the estimated cost of recovery by $2 million; and resulted in an additional $61.6 million in costs for operating WIPP in fiscal year 2016. DOE's WIPP operations activity manager said the revised schedule included contingency. However, according to DOE officials, they did not follow other best practices. For example, DOE did not provide evidence of having an independent cost estimate to validate the revised estimate. DOE did not follow all best practices for cost and schedule estimates in part because DOE does not require that its cleanup operations, such as WIPP, follow these practices. Therefore, DOE cannot have confidence that its estimates are reliable. In contrast, DOE established new requirements in June 2015 that its capital asset projects, such as the new ventilation system at WIPP, follow these best practices. By also requiring cleanup operations to follow them, DOE would have more confidence in the estimates for cleanup operations and capital asset projects.
DOE did not follow all best practices in analyzing and selecting an alternative for the new ventilation system at WIPP. As a result, DOE's analysis was not reliable and DOE cannot be confident that the alternative it selected in December 2015 will best provide the needed capabilities at WIPP. The analysis of alternatives (AOA) process entails identifying, analyzing, and selecting a preferred alternative to best meet the mission need. Of the four categories of best practices for AOAs, DOE's process fully met the category for identifying alternatives. For example, DOE identified a broad range of ventilation alternatives. However, DOE only partially or minimally met the other three categories: general principles, analyzing alternatives, and selecting the preferred alternative. DOE did not follow the best practice to select the preferred alternative based on a cost-benefit analysis that assesses the difference between the life-cycle costs and benefits of each alternative. In addition, an independent review that DOE commissioned consistent with best practices found that DOE's AOA did not adequately document a cost-benefit analysis and that, as a result, the selection of the preferred alternative was not supported by compelling information. The independent review recommended that DOE conduct a cost-benefit analysis consistent with best practices. However, DOE did not conduct the recommended analysis and document it before selecting the final alternative because there was no requirement to do so. In June 2015, the Secretary of Energy directed DOE to develop guidance for conducting AOAs consistent with AOA best practices. A DOE official said the department expected to issue the new guidance by December 2016.

What GAO Recommends

GAO recommends that DOE require cleanup operations to follow best practices for cost and schedule estimates and require projects, including the WIPP ventilation system, to implement recommendations from independent AOA reviews or document the reasons for not doing so. DOE concurred with the recommendations.