Significant Technical Challenges Remain Unresolved

Since the start of the project, DOE and Bechtel have identified hundreds  of technical challenges that vary in their significance and potential  negative impact, and significant technical challenges remain. Among others, the significant technical challenges DOE and Bechtel are  trying to resolve include the following:
Waste mixing—One function of the WTP will be to keep the waste  uniformly mixed in tanks so it can be transported through the plant  and to prevent the buildup of flammable hydrogen and fissile material  that could inadvertently result in a nuclear criticality accident. Preventing erosion and corrosion of WTP components—Excessive  erosion or corrosion of components such as mixing tanks and piping  systems in the WTP is possible. Substantial Additional Cost Increases and Schedule Delays Are Likely

The estimated cost to construct the WTP has almost tripled since the  project’s inception in 2000, its scheduled completion date has slipped by  nearly a decade, and additional significant cost increases and schedule  delays are likely to occur because DOE has not fully resolved the  technical challenges faced by the project. DOE Has Not Yet Fully Estimated the Cost and Schedule Impact of Resolving Technical Challenges

DOE’s original contract price for constructing the WTP, approved in 2000,  stated that the project would cost $4.3 billion and be completed in 2011. As of May 2012,  according to our analysis, the project’s total estimated cost had increased  to $13.4 billion, and additional cost increases and schedule delays are  likely, although a new performance baseline has not yet been developed  and approved. In February 2012, DOE  directed Bechtel to develop a new, proposed cost and schedule baseline  for the project and, at the same time, to begin a study of alternatives that  includes potential changes to the WTP’s design and operational plans to  resolve technical challenges faced by the project. DOE Is Taking Steps to Address Some Management and Oversight Problems but Continues to Face Challenges to Completing the WTP

DOE is taking steps to improve its management and oversight of  Bechtel’s activities, including levying penalties on the contractor for  quality and safety problems but continues to face challenges to  completing the WTP project within budget and on schedule. For example, in 2008, DOE’s Office of  Enforcement and Oversight investigated Bechtel for circumstances  associated with procurement and design deficiencies of equipment for the  WTP and identified multiple violations of DOE nuclear safety  requirements. In addition, in January 2012, DOE’s Office of Health, Safety, and Security  reported that some aspects of the WTP design may not comply with DOE  safety requirements. In November  2011, according to DOE officials, DOE ordered Bechtel to suspend work  on design, procurement, and installation activities for several major WTP  systems including parts of the pretreatment facility and high-level waste  facility until the contractor demonstrates that these activities are aligned  with DOE nuclear safety requirements. For example, DOE’s  ongoing use of a fast-track, design-build approach continues to result in  cost and schedule problems. According to DOE officials, construction of the WTP is currently more  than 55 percent complete, though the design is only about 80 percent  complete. Nuclear industry guidelines suggest that design should be  complete to at least 90 percent before starting construction of nuclear  facilities. build approach can be used most successfully with projects that have  well-defined requirements, are not complex, and have limited risks. DOE has also experienced continuing problems overseeing its contractor’s  activities. For example, DOE’s incentives and management controls are  inadequate for ensuring effective project management and oversight of the  WTP project to ensure that the WTP project is completed within budget and  on schedule. This additional facility could add billions to the cost of treating  Hanford’s waste. Recommendations for Executive Action

To improve DOE’s management and oversight of the WTP project, we  recommend that the Secretary of Energy take the following three actions:
Do not resume construction on the WTP’s pretreatment and high-level  waste facilities until critical technologies are tested and verified as  effective, the facilities’ design has been completed to the level  established by nuclear industry guidelines, and Bechtel’s preliminary  documented safety analyses complies with DOE nuclear safety  regulations. Ensure the department’s contractor performance evaluation process  does not prematurely reward contractors for resolving technical issues  later found to be unresolved. Take appropriate steps to determine whether any incentive payments  made to the contractor for meeting project milestones were made  erroneously and, if so, take appropriate actions to recover those  payments. DOE generally agreed with the report and its recommendations.
Why GAO Did This Study

In December 2000, DOE awarded Bechtel a contract to design and construct the WTP project at DOE's Hanford Site in Washington State. This project--one of the largest nuclear waste cleanup facilities in the world-- was originally scheduled for completion in 2011 at an estimated cost of $4.3 billion. Technical challenges and other issues, however, have contributed to cost increases and schedule delays. GAO was asked to examine (1) remaining technical challenges, if any, the WTP faces; (2) the cost and schedule estimates for the WTP; and (3) steps DOE is taking, if any, to improve the management and oversight of the WTP project. GAO reviewed DOE and contractor data and documents, external review reports, and spoke with officials from DOE and the Defense Nuclear Facilities Safety Board and with contractors at the WTP site and test facilities.

What GAO Found

The Department of Energy (DOE) faces significant technical challenges in successfully constructing and operating the Waste Treatment and Immobilization Plant (WTP) project that is to treat millions of gallons of highly radioactive liquid waste resulting from the production of nuclear weapons. DOE and Bechtel National, Inc. identified hundreds of technical challenges that vary in significance and potential negative impact and have resolved many of them. Remaining challenges include (1) developing a viable technology to keep the waste mixed uniformly in WTP mix tanks to both avoid explosions and so that it can be properly prepared for further processing; (2) ensuring that the erosion and corrosion of components, such as tanks and piping systems, is effectively mitigated; (3) preventing the buildup of flammable hydrogen gas in tanks, vessels, and piping systems; and (4) understanding better the waste that will be processed at the WTP. Until these and other technical challenges are resolved, DOE will continue to be uncertain whether the WTP can be completed on schedule and whether it will operate safely and effectively.
Since its inception in 2000, DOE's estimated cost to construct the WTP has tripled and the scheduled completion date has slipped by nearly a decade to 2019. GAO's analysis shows that, as of May 2012, the project's total estimated cost had increased to $13.4 billion, and significant additional cost increases and schedule delays are likely to occur because DOE has not fully resolved the technical challenges faced by the project. DOE has directed Bechtel to develop a new cost and schedule baseline for the project and to begin a study of alternatives that include potential changes to the WTP's design and operational plans. These alternatives could add billions of dollars to the cost of treating the waste and prolong the overall waste treatment mission.
DOE is taking steps to improve its management and oversight of Bechtel's activities but continues to face challenges to completing the WTP project within budget and on schedule. DOE's Office of Health, Safety, and Security has conducted investigations of Bechtel's activities that have resulted in penalties for design deficiencies and for multiple violations of DOE safety requirements. In January 2012, the office reported that some aspects of the WTP design may not comply with DOE safety standards. As a result, DOE ordered Bechtel to suspend work on several major WTP systems, including the pretreatment facility and parts of the high-level waste facility, until Bechtel can demonstrate that activities align with DOE nuclear safety requirements. While DOE has taken actions to improve performance, the ongoing use of an accelerated approach to design and construction--an approach best suited for well-defined and less-complex projects--continues to result in cost and schedule problems, allowing construction and fabrication of components that may not work and may not meet nuclear safety standards. While guidelines used in the civilian nuclear industry call for designs to be at least 90 percent complete before construction of nuclear facilities, DOE estimates that WTP is more than 55 percent complete though the design is only 80 percent complete. In addition, DOE has experienced continuing problems overseeing its contractor's activities. For example, DOE's incentives and management controls are inadequate for ensuring effective project management, and GAO found instances where DOE prematurely rewarded the contractor for resolving technical issues and completing work.

What GAO Recommends

GAO recommends that DOE (1) not resume construction on WTPs pretreatment and high-level waste facilities until, among other things, the facilities design has been completed to the level established by nuclear industry guidelines; (2) ensure the departments contractor performance evaluation process does not prematurely reward contractors for resolving technical issues later found to be unresolved; and (3) take appropriate steps to determine whether any incentive payments were made erroneously and, if so, take actions to recover them. DOE generally agreed with the report and its recommendations.