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LANL Complex Price Increasing

By John Fleck
Copyright © 2010 Albuquerque Journal
Journal Staff Writer

          Three years ago, federal nuclear program managers told Congressional auditors their new plutonium building at Los Alamos National Laboratory was on budget and on schedule.
        The new Chemistry and Metallurgy Research building would replace an aging, unsafe complex completed in 1952, providing new lab space for workers analyzing samples of plutonium and other radioactive materials used in nuclear weapons.
        With a price tag at the time estimated at over $800 million, the new complex would be completed by 2014, they told the Government Accountability Office.
        Technologically, the project was simple, federal officials said, with "reliable cost estimates."
        How wrong they were.
        Less than a year later, the project's federal managers more than doubled their cost estimate but acknowledged that they had no firm idea about the final price tag.
        In a report to Congress late last month, the National Nuclear Security Administration upped its estimate again, saying it will cost between $3.7 billion and $5.8 billion — four to seven times as much as officials thought just three years ago.
        Even that is only a rough estimate, because design work on the project is only 45 percent completed, and key decisions have yet to be made.
        "We rarely see a cost go down," acknowledged Don Cook, head of the National Nuclear Security Administration's office of Defense Programs, which oversees the work.
        With cost increases come delays. Instead of 2014, the Chemistry and Metallurgy Research Replacement Nuclear Facility is now projected to be finished in 2023, 24 years after the federal government made the decision to build it.
        Federal officials acknowledge they underestimated how much it would cost to strengthen the plutonium lab to withstand a major Los Alamos earthquake without releasing its dangerously radioactive contents.
        Cook said the team that worked on the initial cost estimates were guilty of what he calls "early optimism bias."
        "Humans are generally optimistic," Cook said.
        Building a reputation for cost overruns
        Interviews and records show the project's designers significantly underestimated the cost of meeting tough nuclear safety standards for the building and equipment. The latest plans call for a much deeper foundation and massive amounts of steel and concrete to harden it against earthquake shaking.
        It is the latest in a long list of projects by the Department of Energy and the National Nuclear Security Administration, the DOE sub-agency with responsibility over Los Alamos, that end up costing far more than their original estimates.
        The problems have put the NNSA's construction program on the Government Accountability Office's "high risk list" among a group of federal agencies with management problems that are "impeding effective government and costing the government billions of dollars each year," according to a July letter from the GAO to the agency.
        A 2007 critique by congressional auditors complained of "ineffective ... project oversight and poor contractor management" in nuclear construction projects.
        In addition to the Los Alamos building, estimated costs for a second federal nuclear weapons project, the Uranium Processing Facility in Tennessee, have risen to between $4.2 billion and $6.5 billion. That is at least a fourfold increase from the estimated $600 million to $1.1 billion price tag when the project was launched in 2004.
        NNSA spokesman Damien LaVera said the new cost estimates for the Tennessee and Los Alamos projects reflect an effort by the agency to more carefully estimate project costs before work gets under way, to respond to the GAO's concerns.
        "We don't like our reputation any more than they do," LaVera said of the GAO's critique.
        Bargaining chip
        The Tennessee and Los Alamos projects until recently stumbled along out of the limelight. But that has changed this fall, as the Obama administration and a group of Senate Republicans wrangle over approval of a new arms control treaty with the Russians.
        The Republicans have made support for the two buildings a key bargaining chip, saying they will be needed to maintain the future U.S. nuclear arsenal once the treaty is in place.
        Funding to complete the increasingly expensive projects is included in the administration's proposed long-term budget, which calls for steady increases in spending on nuclear weapons work — $85 billion over the next decade, pushing the program's budget to the highest levels since before the end of the Cold War.
        Among the most vocal critics of the agency's nuclear project management are a cadre of retired nuclear weapons experts.
        "This is mismanagement," said Bob Peurifoy, who retired as a vice president at Sandia National Laboratories in 1991 after 39 years helping in the nuclear weapons complex. Peurifoy had a hand in the development of five of the eight nuclear weapons in the current U.S. arsenal.
        "They've fallen down the rabbit hole," Peurifoy said in an interview. "It's madness. They don't understand accountability to the taxpayer."
        Roger Logan, who worked at both Los Alamos and Lawrence Livermore national labs managing nuclear weapons maintenance efforts, noted in a recent letter to members of the U.S. Senate that the rising costs of the Los Alamos plutonium building fit a familiar pattern.
        Logan said weapons complex insiders have a word for what is happening: "NIFfing." The word comes from Livermore's National Ignition Facility, known as "NIF." Logan explained that it means launching a project with low initial cost estimates, only to see the numbers rise once Congress has approved it and serious work is under way. By that time, "they've got everybody over a barrel," Logan said.
        Originally proposed in the mid-1990s with a $1 billion price tag, the National Ignition Facility's eventual cost rose to $3.5 billion by official government estimates, though critics say the real price tag is more than $5 billion.
        Safety concerns
        The Chemistry and Metallurgy Research Replacement project would replace a hulking complex of concrete buildings completed in the early 1950s that served throughout the Cold War as a center for research and analysis of plutonium and other radioactive materials used in U.S. nuclear weapons.
        Federal and Lab officials acknowledged as early as the 1980s that the old lab structures needed to be repaired or replaced, but they have zigged and zagged regarding how to go about it.
        The original late-'80s plan was to build a new building. Federal officials abandoned that plan in the early 1990s in favor of upgrading the existing buildings.
        After spending $106 million doing that, they changed their minds again, returning to the idea of a replacement building in 1999.
        A part of the project, a building with offices and a small amount of laboratory space, is already finished. But the main building where most of the plutonium work would be done is more than a decade away.
        In addition to problems posed by rising costs, critics say the failure to complete a replacement for the old 1950s-era Chemistry and Metallurgy Research building is dangerous because of its inability to withstand an earthquake.
        The Defense Nuclear Facilities Safety Board recently reiterated a longstanding complaint that the building is "seismically fragile and poses a continuing risk to the public and workers." The building is "structurally unsound and ... unsuitable for protracted use," the board, an independent federal agency that provides nuclear safety oversight, wrote in a September report to Congress.
        In the next 10 years, as the replacement building is under construction, there is a one-in-50 chance of an earthquake strong enough to cause the old building to collapse, not only endangering workers inside, but also releasing nuclear material, according to the Safety Board.
        Nuclear cost overruns
        Current projects
        • Chemistry and Metallurgy Research Replacement-Nuclear Facility, Los Alamos National Laboratory
        Original estimate: $600 million
        Current estimate: $3.7 billion to $5.8 billion
        Original estimated completion: 2014
        Current estimated completion: 2023
        • Uranium Processing Facility, Y-12 Plant, Oak Ridge Tennessee
        Original estimate: $600 million to $1 billion
        Current estimate: $4.2 billion to $6.5 billion
        Original estimated completion: Between 2018 and 2022
        Current estimated completion: 2024
        Past projects
        • National Ignition Facility, Lawrence Livermore National Laboratory
        Original estimate: $1.1 billion
        Final cost: $3.5 billion
        Original estimated completion: 2002
        Completion: 2009
        • Dual-Axis Radiographic Hydrotest Facility, Los Alamos
        Original estimate: $30 million
        Final cost: more than $300 million
        Original estimated completion: 1990
        Completion: 2009
        Source: Department of Energy, Government Accountability Office

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