Built in the 1940s and 1950s, the Y-12 National Security Complex,
located in Oak Ridge, Tennessee, is the National Nuclear Security
Administration's (NNSA) primary site for enriched uranium
activities. Because Y-12 facilities are outdated and deteriorating,
NNSA is building a more modern facility--known as the Uranium
Processing Facility (UPF). NNSA estimates that the UPF will cost up
to $3.5 billion and save over $200 million annually in operations,
security, and maintenance costs. NNSA also plans to include more
advanced technologies in the UPF to make uranium processing and
component production safer. GAO was asked to (1) assess NNSA's
estimated cost and schedule for constructing the UPF; (2) determine
the extent to which UPF will use new, experimental technologies,
and identify resultant risks, if any; and (3) determine the extent
to which emerging changes in the nuclear weapons stockpile could
affect the UPF project. To conduct this work, GAO reviewed NNSA
technology development and planning documents and met with
officials from NNSA and the Y-12 plant. The UPF project costs have
increased since NNSA's initial estimates in 2004 and construction
may be delayed due to funding shortfalls. NNSA's current estimate
prepared in 2007 indicates that the UPF will cost between $1.4 and
$3.5 billion to construct--more than double NNSA's 2004 estimate of
between $600 million and $1.1 billion. In addition, costs for
project engineering and design, which are less than halfway
completed, have increased by about 42 percent--from $297 to $421
million--due in part to changes in engineering and design pricing
rates. With regard to the project's schedule, NNSA currently
estimates that UPF construction will be completed as early as 2018
and as late as 2022. However, because of a funding shortfall of
nearly $200 million in fiscal year 2011, NNSA officials expect that
the UPF will not be completed before 2020, which could also result
in additional costs. NNSA is developing 10 new technologies for use
in the UPF and is using a systematic approach--Technology Readiness
Levels (TRL)--to gauge the extent to which technologies have been
demonstrated to work as intended. Industry best practices and
Department of Energy (DOE) guidance recommend achieving specific
TRLs at critical project decision points--such as establishing a
cost and schedule performance baseline or beginning
construction--to give optimal assurance that technologies are
sufficiently ready. If critical technologies fail to work as
intended, NNSA may need to revert to existing or alternate
technologies, possibly resulting in changes to design plans and
space requirements that could delay the project and increase costs.
Changes in the composition and size of the nuclear weapons
stockpile could occur as a result of changes in the nation's
nuclear strategy, but NNSA officials and a key study said that the
impact of these changes on the project should be minor. For
example, the New Strategic Arms Reduction Treaty signed in April
2010 by the leaders of the United States and Russia would, if
ratified, reduce the number of deployed strategic warheads from
about 2,200 to 1,550. According to NNSA officials, NNSA and DOD
have cooperated closely and incorporated key nuclear weapons
stockpile changes into UPF's design. Also, an independent study
found that most of the UPF's planned space and equipment is
dedicated to establishing basic uranium processing capabilities
that are not likely to change, while only a minimal amount--about
10 percent--is for meeting current stockpile size requirements. GAO
is making five recommendations for, among other things, improving
the UPF's cost and funding plans, ensuring that new UPF
technologies reach optimal levels of maturity prior to critical
project decisions, and for improving DOE guidance. NNSA generally
agreed with the recommendations.
General
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