April 13, 2017

Followup on the K Basin Sludge Removal Project

The K West Reactor Fuel Storage Basin is one of the last facilities along the Columbia River at the Department of Energy’s Hanford Site that contains nuclear material.  The K Basin contains highly radioactive sludge resulting from long-term storage and degradation of spent nuclear fuel.  CH2MHill Plateau Remediation Company, LLC (CHPRC), managed by the Department’s Richland Operations Office, has a mission to begin removal of 27 cubic meters of radioactive sludge by September 30, 2018.

In February 2011, the Office of Inspector General reported that the project’s previous contractor and one of its subcontractors failed to apply key project management principles and did not ensure that the contractor followed best business practices. Therefore, we initiated this followup audit to determine whether the Department was effectively managing the K Basin Sludge Removal Project at the Hanford Site.

Although the K Basin project has experienced cost and schedule performance issues throughout its history, according to CHPRC and the Department’s records, as of October 20, 2016, the Sludge Removal Project appears to be on schedule to meet current milestones.  However, we identified a concern where management reserve was used to reset the project’s performance measurement baseline, which included completed workscope. This occurred because CHPRC did not follow specific guidance required by the contract on the accepted use of management reserve.  We followed up on issues identified in a prior audit report and found that the Department made changes to the Sludge Treatment Project which addressed the project management concerns.

We are aware that the circumstances associated with this project were unique, and are not likely to recur. However, we are concerned that CHPRC’s performance on this project will be overstated.  Accordingly, to ensure the accuracy of the Sludge Removal Project’s historical cost variances, we suggest the Acting Assistant Secretary, Office of Environmental Management and CHPRC coordinate with the Director, Office of Project Management Oversight and Assessments to take necessary steps to ensure the Sludge Removal Project’s historical cost variances remain visible for project performance reporting purposes.

Topic: Environmental Cleanup