FUSION ENERGY

Observations on DOE's 

Cost and Schedule 

Estimates for U.S. 

Contributions to an 

International Experimental 

Reactor

Statement of Frank Rusco, Director, 

Natural Resources and Environment

Testimony 

Before the Subcommittee on Energy, 

Committee on Science, Space, and 

Technology, House of Representatives

For Release on Delivery 

Expected at 9:00 a.m. ET

Friday, July 11, 2014

GAO-14-750T

United States Government Accountability Office
Page 1 GAO-14-750T 

Chairman Lummis, Ranking Member Swalwell, and Members of the 

Subcommittee:

I am pleased to be here today to discuss our recent report on the 

Department of Energy’s (DOE) cost and schedule estimates for U.S. 

contributions to the International Thermonuclear Experimental Reactor, 

now known as ITER.1 As you know, ITER is an international research 

facility being built in France to demonstrate the feasibility of fusion 

energy. Fusion occurs when the nuclei of two light atoms collide and fuse 

together at high temperatures, which results in the release of large 

amounts of energy. The United States has committed to providing about 9 

percent of ITER’s construction costs through contributions of hardware, 

personnel, and cash, and DOE is responsible for managing these 

contributions, as well as the overall U.S. fusion program. Agreeing to 

share the cost of building ITER allows the United States to benefit from 

the scientific and technological expertise of the other six ITER members 

and have full access to ITER’s research results.2

 1

GAO, Fusion Energy: Actions Needed to Finalize Cost and Schedule Estimates for U.S. 

Contributions to an International Experimental Reactor, 

However, since the 

ITER Agreement was signed in 2006, ITER’s expected construction cost 

has grown by billions of dollars, and its construction schedule has slipped 

by years, as have the cost and schedule estimates for U.S. contributions 

to the project’s construction (see fig. 1).

GAO-14-499 (Washington, D.C.: 

June 5, 2014).

2

The other six ITER members are the European Union, India, Japan, the People’s 

Republic of China, the Republic of Korea, and the Russian Federation.
Page 2 GAO-14-750T 

Figure 1: Total Estimated Cost and Completion Date for U.S. Contributions to ITER’s Construction

The ITER Agreement established a management framework under which 

the international ITER Organization manages the overall project and is 

governed by a council, known as the ITER Council, which is composed of 

high-level government officials from each of the seven ITER members. 

During ITER’s construction, each individual ITER member is responsible 

for managing the cost and schedule of its assigned contributions within 

the overall goals set in the international schedule. DOE manages U.S. 

contributions through the U.S. ITER Project Office at the Oak Ridge 

National Laboratory in Tennessee. In fiscal year 2014, the U.S. ITER 

Project received $199.5 million, which is about 40 percent of that year’s 

overall U.S. fusion program budget. The ITER Agreement includes a 

provision that allows any ITER member except the European Union to 

withdraw from the project after the agreement has been in force for 10 

years, which would be in October 2017. However, withdrawing members 

still have the responsibility of providing the entire cost of their assigned 

hardware components and cash contributions to the construction phase, 

and they could be responsible for other costs as well if they withdraw 

during ITER’s operation phase.

In 2007, when the United States was just beginning to participate in ITER, 

we reported on the importance of DOE assessing the full costs of U.S. 
Page 3 GAO-14-750T 

participation in ITER and setting a definitive cost estimate for the project.3

In this context, my testimony today discusses the findings from our recent 

June 2014 report on DOE’s cost and schedule estimates for the U.S. 

ITER Project. Accordingly, this testimony addresses (1) how and why the 

estimated cost and schedule for the U.S. ITER Project have changed 

since 2006; (2) the reliability of DOE’s current cost and schedule 

estimates for the U.S. ITER Project and the factors, if any, that have 

affected their reliability; and (3) the actions DOE has taken, if any, to 

reduce U.S. ITER Project costs and plan for their potential impact on the 

overall U.S. fusion program. In addition, I will highlight several key actions 

that we recommended in our report that DOE can take to help reduce 

uncertainty about the U.S. ITER Project’s cost and schedule.

Specifically, we reported that DOE had made a commitment to provide 

hardware components to ITER without a definitive cost and schedule 

estimate or a complete project design. We reported that, as a result, 

DOE’s preliminary cost estimate of $1.122 billion for U.S. contributions to 

ITER’s construction might be subject to significant change. We also 

reported that the management challenges facing the ITER Organization 

could result in ITER construction delays and further increase costs for the 

United States. Today, significant questions remain about how much the 

U.S. ITER Project will cost, when it will be completed, and how DOE 

plans to manage the impact of U.S. ITER Project costs on the overall U.S. 

fusion program in a constrained federal budget environment.

To conduct this work, among other things, we reviewed the ITER 

Agreement, relevant laws, and DOE guidance, DOE’s most recent cost 

and schedule estimates for the U.S. ITER Project—as developed by the 

U.S. ITER Project Office in August 2013—and DOE’s internal peer review 

of those estimates, and we interviewed DOE officials and U.S. ITER 

Project Office representatives. Our June 2014 report includes a detailed 

explanation of the methods used to conduct our work. We conducted the 

work on which this testimony is based in accordance with generally 

accepted government auditing standards.

 3

GAO, Fusion Energy: Definitive Cost Estimates for U.S. Contributions to an International 

Experimental Reactor and Better Coordinated DOE Research Are Needed, GAO-08-30 

(Washington, D.C.: Oct. 26, 2007).
Page 4 GAO-14-750T 

DOE’s estimated cost for the U.S. ITER Project has grown by almost $3 

billion since the ITER Agreement was signed in 2006, and the agency’s 

expected schedule for completing the project has slipped by 20 years.

DOE identified several reasons for the growth in its cost and schedule 

estimates, including

• higher estimates for U.S. hardware components as designs and 

requirements have been more fully developed over time;

• higher contingency amounts added to address risks from the project’s 

significantly longer schedule;

• U.S. schedule delays due to international project schedule delays and 

U.S. funding constraints; and

• higher cash contributions to the ITER Organization due to growth in 

ITER construction costs.

Nonetheless, DOE’s current estimates remain preliminary because DOE 

has not approved a performance baseline for the U.S. ITER Project. A 

performance baseline captures a project’s key performance, scope, cost, 

and schedule parameters, and it represents a commitment from DOE to 

Congress to deliver a project within those parameters.

DOE’s current cost and schedule estimates for the U.S. ITER Project 

reflect most characteristics of reliable estimates.4

 4

GAO, GAO Cost Estimating and Assessment Guide: Best Practices for Developing and 

Managing Capital Program Costs, 

However, DOE’s 

estimates cannot be used to set a performance baseline that would 

represent a commitment from DOE to Congress to deliver the project at a 

specific cost and date. DOE’s target date for setting such a performance 

baseline has slipped from fiscal year 2007 to late in fiscal year 2015. 

DOE’s current estimates cannot be used to set a performance baseline 

because of three factors, two of which DOE can only partially influence. 

First, the overall international project schedule that DOE uses as a basis 

for the U.S. schedule is not reliable, in part, because of management 

deficiencies within the ITER Organization. Second, DOE has not 

proposed a final, stable funding plan for the U.S. ITER Project. DOE’s 

most recent plan was to provide a flat $225 million per year for the 

project, but that plan could change depending on the outcome of the 

GAO-09-3SP (Washington, D.C.: Mar. 2, 2009) and 

GAO Schedule Assessment Guide: Best Practices for Project Schedules—Exposure 

Draft, GAO-12-120G (Washington, D.C.: May 30, 2012).

The Estimated Cost 

and Schedule of the 

U.S. ITER Project 

Has Grown 

Substantially Since 

2006 for Several 

Reasons

Despite Reflecting 

Most Characteristics 

of Reliable Cost and 

Schedule Estimates, 

DOE’s Estimates 

Cannot Be Used to 

Set a Baseline
Page 5 GAO-14-750T 

ITER Organization’s reassessment of the international project schedule. 

The third factor that has kept DOE from setting a performance baseline is 

within the agency’s direct control. Specifically, an August 2013 DOE 

internal peer review found that the methodologies used to develop the 

agency’s current cost estimate of $3.915 billion and its schedule estimate 

were appropriate, but the estimates do not sufficiently consider all the 

project’s risks and uncertainties. This review found that when these risks 

and uncertainties are accounted for, the U.S. ITER Project was more 

likely to cost from $4 billion to $6.5 billion.

DOE has taken several actions to try to get the ITER Organization to 

address international project management and scheduling deficiencies 

including: (1) participating in early ITER Agreement negotiations leading 

to the adoption of biennial management assessments; (2) advancing 

project management principles such as competitive procurement actions 

in ITER Council Management Advisory Committee meetings; and (3) 

providing position papers to other ITER members on DOE’s concerns 

about ITER Organization management. To address the uncertainty of the 

funding plan for the U.S. ITER Project, DOE has evaluated a range of 

funding scenarios for executing the project. To ensure that all risks and 

uncertainties are sufficiently incorporated into its estimates, DOE officials 

told us the U.S. ITER Project Office held a series of risk workshops. 

These efforts may have helped improve ITER Organization project 

management and helped jump-start efforts to develop a reliable 

international project schedule, but such a schedule is not expected until 

June 2015 when the ITER Organization hopes to complete its schedule 

reassessment. Further, project management and schedule deficiencies in 

the ITER Organization and uncertainty in the U.S. ITER Project funding 

plan continue to delay the agency’s efforts to set a performance baseline.
Page 6 GAO-14-750T 

According to DOE documents and officials, DOE has taken several 

actions that have reduced the cost of the U.S. ITER Project by about 

$388 million as of February 2014. However, DOE has not adequately 

planned for the potential impacts of U.S. ITER Project costs on the overall 

U.S. fusion program. In fiscal year 2014, the U.S. fusion program budget 

was approximately $505 million, of which $199.5 million, or about 40 

percent, went toward the U.S. ITER Project. We have previously reported 

that strategic planning is a leading practice that can help clarify priorities,5

and the House and Senate Appropriations Committees have directed 

DOE to complete a strategic plan for the U.S. fusion program. DOE has 

begun work on such a plan but has not committed to a specific 

completion date. Without a strategic plan for the U.S. fusion program, 

DOE does not have information to create an understanding among 

stakeholders about its plans for balancing the competing demands the 

program faces with the limited available resources or to help Congress 

weigh the trade-offs of different funding decisions for the U.S. ITER 

Project and overall U.S. fusion program.

To reduce uncertainty about the expected cost and schedule of the U.S. 

ITER Project and its potential impact on the U.S. fusion program, we 

made several recommendations to DOE in our June 2014 report. These 

included the following:

• direct the U.S. ITER Project Office to revise and update the project’s 

cost estimate by including a comprehensive sensitivity analysis and 

conducting an independent cost estimate to meet all characteristics of 

high quality, reliable cost estimates;

• develop and present at the next ITER Council meeting a formal 

proposal describing the actions DOE believes need to be taken to set 

a reliable international project schedule and improve ITER 

Organization project management, and continue to formally advocate 

for the timely implementation of those actions at future ITER Council 

meetings;

• once the ITER Organization completes its reassessment of the 

international project schedule, use that schedule, if reliable, to 

 5

For example, see GAO, Environmental Protection: EPA Should Develop a Strategic Plan 

for Its New Compliance Initiative, GAO-13-115 (Washington, D.C.: Dec. 10, 2012) and 

Environmental Justice: EPA Needs to Take Additional Actions to Help Ensure Effective 

Implementation, GAO-12-77 (Washington, D.C.: Oct. 6, 2011).

DOE Has Taken 

Several Actions to 

Reduce U.S. ITER 

Project Costs but Has 

Not Adequately 

Planned for Their 

Impact on the U.S. 

Fusion Program

DOE Can Take Action 

to Reduce 

Uncertainty about the 

U.S. ITER Project’s 

Cost and Schedule
Page 7 GAO-14-750T 

propose a final, stable funding plan for the U.S. ITER Project, approve 

a performance baseline, and communicate this information to 

Congress; and

• set a specific date for completing, in a timely manner, a strategic plan 

for the U.S. fusion program that addresses DOE’s priorities for the 

overall U.S. fusion program in light of U.S. ITER Project costs, and 

involve the Fusion Energy Sciences Advisory Committee in the 

development of the plan.

DOE agreed with all of our June 2014 report’s recommendations and said 

it has taken steps or plans to take additional steps to fully implement 

them.

In conclusion, in 2007 and now again in 2014, we have found that the 

U.S. ITER Project is subject to a significant amount of uncertainty and 

may continue to face significant changes or delays in the future. In 

addition, the cost of U.S. contributions to ITER could continue to grow. 

ITER provides an opportunity to develop a clean, abundant source of 

energy, but it should be considered in terms of its likelihood of success, 

broader impacts on the U.S. fusion program, and federal budget 

constraints.

Chairman Lummis, Ranking Member Swalwell, and Members of the 

Subcommittee, this concludes my prepared statement. I would be 

pleased to answer any questions that you may have at this time.

If you or your staff members have any questions concerning this 

testimony, please contact me at (202) 512-3841 or ruscof@gao.gov. 

Contact points for our Offices of Congressional Relations and Public 

Affairs may be found on the last page of this statement. Other individuals 

who made key contributions to this testimony include Dan Haas, Assistant 

Director; David Marroni, and Andrew Moore.

GAO Contact and 

Staff 

Acknowledgments

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