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Thursday, May 23, 2013

UPF's cost may soar above $11B

UPF's cost may soar above $11B

By Frank Munger
From the Knoxville News Sentinel
May 21, 2013

For the past couple of years, the government has stood behind a cost range of $4.2 billion to $6.5 billion for the Uranium Processing Facility, but that range may not be able to contain the giant project's growing costs as the schedule gets pushed into the future and funding gets stretched out.

Todd Jacobson of Nuclear Weapons & Materials Monitor this week reported that, based on a Government Accountability Office briefing prepared for congressional committees, the cost of UPF could go beyond the $6.5 billion estimated cap and perhaps go well beyond it.

According to information in the GAO's 27-page briefing package, the "space/fit" problem that forced the UPF team to re-do the building's design to accommodate more equipment is a big part of the cost escalation. The GAO cited NNSA documents that say the space problem will add $540 million to the project's cost, delay the start of construction and delay the start of facility operations by 13 months.

A bigger impact on the overall cost, however, appears to be the possibility of the project getting significantly lengthened due to funding constraints.

The NNSA declined to comment on the GAO analysis or discuss any updates on the estimated cost range for the Uranium Processing Facility.

The GAO briefing notes that UPF cost estimates made in 2010-2011 timeframe were based on annual appropriations not subject to budget constraints. The NNSA, which placed the cost range at $4.2 billion to $6.5 billion in that time frame, also planned on potentially changing the year-to-year funding to meet the needs as the UPF moved from design to site prepration to construction to operations.

In the same period, the Army Corps of Engineers challenged the NNSA's estimated cost range for UPF and came up with a range that went up to to $7.5 billion. The Corps also did not foresee budgetary constraints, with the idea of the biggest funding load coming with $900 per million per year for UPF in four consecutive fiscal years.

Now, however, with schedules getting lengthened and some work getting deferred, the overall costs are reportedly climbing.

Under less-optimum funding profiles, with limited appropriations (between $200 million and $500 million annually), the overall cost of UPF could go up to $11.6 billion and stretch the project out until FY 2035 -- the GAO analysis of Corps of Engineers data suggests.

The GAO said the current cost range (up to $6.5 billion) for UPF does not include significant portions of the original scope.

The briefing report said the NNSA in October 2012 updated its point estimate -- the closest estimate to actual cost of UPF -- from $5.2 billion to $5.8 billion. The NNSA reportedly said it did not update the cost range, which includes contingency for unknowns, at that time because it's scheduled to get a complete review when the cost baseline is established for the Critical Decision-2 process (which the contractor plans to submit in September 2013).

The GAO concluded by saying it is "unclear" if the project's current cost range of $4.2B to $6.5B remains valid because:

-- NNSA's current "point estimate" is $6B as design cost for certain processing equipment has increased.

-- The space/fit issue ate up about 45 percent of the NNSA's contingency for the project and the NNSA had not accounted for such a risk.

-- Several identified project risks, "including all risks related to construction activities," are still out there and could require funding to overcome in the future.

"It is possible that additional funds will be needed to ensure there is sufficient contingency to complete the UPF within a cost range that meets NNSA's 85 percent confidence level," the GAO briefing states. "As part of the CD-2 process, NNSA plans to establish a firm cost baseline by June 2014."

21 comments:

Anonymous said...

No big deal as long as you cut all funding to NIF, Z-Machine, Photon Science, Global Security, DOD and many other programs and concentrate on just building one and complete it on time.

Anonymous said...

CMMR on steroids?

Anonymous said...

Just rename it the Modern Pit Facility and all will be right in the universe.

Anonymous said...

And some people thought that the $4 billion figure for LANL's CMMR was too much?

Wow, Y-12 and the powerful Tennessee Congressional delegation sure did a number on NNSA and the rest of the Congress on this one. Guess another round of downsizing will have to take place at the NNSA labs to cover for the enormous increased funding expense of UPF.

Anonymous said...

And some people thought that the $4 billion figure for LANL's CMMR was too much?

May 25, 2013 at 10:34 PM

Old news was $4B, new news is closer to twice that number.

Anonymous said...

Old news was $4B, new news is closer to twice that number.

May 26, 2013 at 8:10 AM

After all, Lanl has to keep up with Y-12!

Anonymous said...

At least the CMRR-NF ceiling design was high enough.

Between corruption, incompetence and politics we've gutted our ability to even design and build a factory building.

Anonymous said...

Between corruption, incompetence and politics we've gutted our ability to even design and build a factory building.

May 27, 2013 at 3:46 PM

Who is "we"?? Are you part of the problem?

Anonymous said...

Y12 is more critical to the stockpile than CMRR. That's why they can screw up and still enjoy being rewarded for their incompetence. Now I'm not saying that CMRR is not important. CMRR should take much higher priority over NIF. In fact the two should never be compared in the same sentence. One is a critical multifaceted capability while the other is a sandbox for open-ended science.

Anonymous said...

Why is Y-12 critical to the US nuclear deterrent?

Anonymous said...

Why is Y-12 critical to the US nuclear deterrent?

May 29, 2013 at 4:50 PM

Uranium facility for nuclear weapon secondary stage refurbishment/repair/analysis/stewardship. No other reason.

Anonymous said...

Why build new secondary parts instead of new primary parts?

Anonymous said...

CMRR can do that. The big question is what NIF does, and more importantly, "what has NIF done for me lately?"

Anonymous said...

Why build new secondary parts instead of new primary parts?

May 29, 2013 at 7:49 PM

Try to learn a little bit about nuclear weapons before you make a bigger fool of yourself. There is lots of unclassified information out there that will explain the difference between the primary stage and the secondary stage of a nuclear weapon.

Anonymous said...

Haha reading this exchange gave me a chuckle.

Anonymous said...

Why was it more important to build a new uranium facility than a new plutonium facility?

Anonymous said...

Why was it more important to build a new uranium facility than a new plutonium facility?

May 31, 2013 at 4:56 AM

It isn't.

Anonymous said...

LANL can still build a limited number of pits per year without CMRR.

Anonymous said...

Y-12 can build a limited number of secondary parts without a new uranium facility.

Anonymous said...

UPF and CMMR are designed and intended to last 100 years - basically the last nuke production facilities we'll ever build. They will be used to keep the US stockpile around 1000 - 1500 warheads for the next 100 years.

Existing infrastructure can do this for say the next 20 or 30, but not 100 years. So you can stretch out construction of UPF over an additional 15 to 20 years, but as the articles on UPF cost point out, the longer you take to build the facility the more it cost.

Oh btw, why did I pick 100 years? There have been some interesting articles that speculate future technological advances will make strategic nuclear weapons impractical - pinpoint detection of subs at sea and orbital weapons to destroy them, kinetic kill vehicles for anti-ICBM reentry phase, etc. Replacing strategic nukes will be highly accurate hypersonic prompt delivery systems with conventional explosives. Just as 100 years ago, we would not have been able to envision nuclear weapons, today we cannot envision the actual strategic weapon systems that major countries will be using in 100 years.

Alysa said...

This is cool!

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