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Corps Report Validates Cost of $12.2 billion and Construction Completion in November 2019
WASHINGTON, DC - The U.S. Department of Energy (DOE) today released the U.S. Army Corps of Engineers (USACE) report detailing their extensive review and validation of the project contractor, Bechtel National Inc.'s Estimate at Completion - or detailed cost and schedule - for Hanford's Waste Treatment and Immobilization Plant (WTP) in southeastern Washington State. To reduce uncertainty in the planning of this first-of-its kind project, Secretary Samuel W. Bodman last year requested this independent review and validation by the USACE to produce a credible and defensible cost and schedule.
The USACE recommends a $650 million addition to the cost which includes $320 million in base costs to cover potential fluctuations in labor rates and $330 million in additional contingency, bringing the total estimated cost for completing and testing the WTP to $12.2 billion. The USACE also recommends the addition of 3 months to the overall project schedule, putting completion of the facility in November 2019. The validated cost and schedule estimate assumes consistent Congressional appropriations of $690 million from fiscal year (FY) 2007 through construction and commissioning completion.
"To effectively manage a project of this size and complexity, the Department must have a credible cost and schedule from which we can effectively plan. With the Army Corps' validation of Bechtel's estimate, we can now begin to put together a reliable baseline that will lead us to the safe and successful construction of the Waste Treatment Plant," Assistant Secretary for Environmental Management Jim Rispoli said.
The $12.2 billion validated cost estimate includes $9.1 billion in base cost and approximately $3.1 billion in contingency. Of the $9.1 billion base cost, $2.7 billion has been expended through FY05, leaving approximately $6.4 billion total remaining as "to go" costs for the project. With the approximate $3.1 billion of contingency, the remaining estimate to complete the plant is $9.5 billion.
In addition to the validated cost and schedule, the USACE report recognized organizational and staffing changes that have been initiated by the Department of Energy and Bechtel National, Inc. that are improving project management processes. The report also includes findings and associated recommendations and observations regarding cost, schedule, risk, and management processes. Those findings and associated recommendations include:
- Addition of base cost for labor rate estimates, specifically in electrical, piping, and instrumentation;
- Establishment of an electronic interface to integrate data systems;
- Addition of base cost for labor rates related to startup and testing of the WTP;
- Negotiation and revision of the Bechtel contract to clarify roles, authority and enforcement provisions between Bechtel and DOE;
- Establishment of a technical scope, cost and schedule baseline for the project;
- Improvement of the change control process;
- Implementation of an Earned Value Management System; and,
- Establishment of DOE ownership of all project contingency.
Each of the findings and associated recommendations in the USACE report will be evaluated by the Department. Several are already being addressed, including implementation of an Earned Value Management System, baseline establishment, and planned negotiation and revision of the Bechtel contract.
The USACE report can be found at the DOE's Office of River Protection internet website at http://www.hanford.gov/ under the section titled Public Information/Public Involvement.
Once constructed, the WTP will be an industrial complex of facilities for separating and vitrifying (immobilizing in glass) millions of gallons of radioactive and chemical wastes stored at the Hanford Site. The five major components of the WTP will be the Pretreatment Facility for separating the waste into high-level and low-activity waste fractions, the High-Level Waste and Low-Activity Waste facilities where the wastes will be immobilized in glass, the Analytical Laboratory for testing quality of the glass and other monitoring activities, and the Balance of Facilities which will comprise over 20 various support facilities. Once complete, the WTP will be the largest and most capable facility of its kind in the world.
Megan Barnett, (202) 586-4940