Department of Energy Office of Inspector General Bechtel National, Inc.'s Cost Proposal Estimates for Baseline Change Proposal 02 and Its Contract Modification 384 Counterpart for the Waste Treatment and Immobilization Plant (DOE-OIG-23-34)
What Did the OIG Find?
We found that Bechtel did not utilize reasonable cost proposal estimates for baseline change proposal 02 and its contract modification 384 counterpart at the Waste Treatment and Immobilization Plant. First, Bechtel did not always use adequate estimating practices. Second, Bechtel was unable to reconcile management reserve amounts to identified risks and demonstrate how estimates reconciled to the Risk Management Plan. Finally, Bechtel's use of its Monte Carlo simulation was not consistent with industry practice, which resulted in overstated hours and costs. We attributed these issues to inadequacies in Bechtel's estimating system and Department oversight. We identified several weaknesses related to Bechtel's labor hour estimates. The labor hour estimates account for approximately $1.8 billion of the total proposed $4.5 billion.
What Is the Impact?
These issues resulted in estimates that were likely unreasonable, could not be adequately supported, and potentially benefited Bechtel improperly and disadvantaged the taxpayer. In addition, the issues identified indicate an inadequate estimating system could impact every future estimate Bechtel makes on this project. We identified over 1 million direct labor hours added through Bechtel's questionable application of Monte Carlo.
https://www.energy.gov/sites/default/files/2023-10/DOE-OIG-23-34.pdf
8 comments:
Translation: Bechtel told DOE how much it was going to cost given the multitude of superfluous government regulations, union requirements and environmental laws, and DOE didn't like the answer. As a result, they told Bechtel to go back and "improve their estimates" until the number is less embarrassing to the government.
I am shocked, shocked that Bechtel would do such a thing.
Undoubtedly Bechtel will get an award for cost savings. Great work all around.
With Bechtel and DOE, it is still a tail wagging the dog relationship.
“The U.S. Department of Energy has asked its Office of Inspector General to investigate the recent firing of Hanford whistleblower Donna Busche.”
https://www.seattletimes.com/seattle-news/doe-to-investigate-whistleblower-firing/
https://www.energy.gov/sites/default/files/2014/10/f18/IG-0923.pdf
https://whistleblower.org/press/doe-inspector-general-fails-address-hanford-whistleblower-retaliation/
DOE contracts with Bechtel - they should remember the punchline of a story:
"You knew I was a snake when you picked me up."
When Congress got the idea to privatize the labs management, they did not do their homework: RFCs were open to interpretation, bid selection criteria were loosely followed and track records of prospective contractors were ignored
.That is costing taxpayers. There seems to be an unwritten rule: don't mess with Bechtel. I cannot believe Bechtel that a for-profit construction company is in charge of insuring national security. Will you hire your barber to perform surgery on you?
6:09 Bechtel is a mafia. I will never forget the day Riley Bechtel “toured” the Lab with his own, personal (armed) guard. The people who arranged the tour were part of the mob, the people who gave the tour were part of the mob, the people who allowed him to have an armed guard were part of the mob, and he literally surveyed the place like a mob boss looks over a Boston turnpike. Bechtel has no business doing ANY business in this country. They are bottom feeders.
11/05/2023 5:40 PM
Bechtel baby, that is how we role. Get in get the cash, leverage what you can and get out and on to the next.
On a more serious note people were say back in 2009 that our enemies may be watching how we are treating the national labs, and we do not take them seriously anymore.
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