Nuclear Weapons: Technology Development Efforts for the Uranium Processing Facility
Published: 2014-04-18T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: NNSA conducts enriched uranium activities—including producing components for nuclear warheads and processing nuclear fuel for the U.S. Navy—at the Y-12 National Security Complex in Tennessee. NNSA has identified key shortcomings in the Y-12 plant's current uranium operations, including rising costs due to the facility's age. In 2004, NNSA decided to build a more modern facility—the UPF—which will use nine new technologies that may make enriched uranium activities safer and more efficient.
In November 2010, GAO reported on the UPF and identified risks associated with the use of new technologies ( GAO-11-103 ). The Fiscal Year 2013 National Defense Authorization Act mandated that GAO assess the UPF quarterly. This is the third report, and it assesses (1) additional technology risks, if any, since GAO's November 2010 report and (2) NNSA's actions to address any risks. GAO reviewed NNSA and contractor documents and interviewed NNSA officials and contractor personnel.
GAO is not making any new recommendations. However, NNSA should continue actions to address the two recommendations—which NNSA generally agreed with—in GAO's November 2010 report related to ensuring that technologies reach optimal levels of maturity prior to critical project decisions. In commenting on a draft of this report, NNSA said its current technology maturation guidance is adequate.
section_title: What GAO Found
paragraphs: GAO has identified five additional risks since its November 2010 report ( GAO-11-103 ) associated with using new technologies in the National Nuclear Security Administration's (NNSA) Uranium Processing Facility (UPF), which is to be built in three interrelated phases. These risks and the steps that NNSA is taking to address them include the following:
Technology integration risks . An August 2013 UPF independent peer review team concluded that the microwave casting technology—a process that uses microwave energy to melt and form uranium into various shapes—has not been demonstrated in a relevant environment, which is a requirement to reach a key technology maturity milestone. To address this risk, NNSA officials said they plan to accelerate the procurement and environmental testing of a microwave casting prototype.
Technology development risks . A key insulation material planned as a nuclear safety control during uranium casting failed a series of performance tests in fiscal year 2013. According to UPF contractor representatives, this risk is now the project's most significant technological risk. To address this risk, these representatives said they are trying to identify a replacement insulation material and exploring the use of a different safety control.
Technology transition risks . NNSA is currently evaluating an alternative technology to the UPF's baseline uranium purification technology, which has been under development since 2005. The alternative technology may generate less radioactive waste and may be more efficient to operate than the baseline technology. If NNSA switches technologies, NNSA officials said that the UPF contractor (1) will have to redesign the processing area and equipment; (2) may have to add utilities; and (3) will have to revise the UPF's nuclear safety analysis, creating the potential for further project risks.
Performance assurance risks . NNSA stopped development efforts on a key machining technology, which is part of the UPF's second phase. As a result, NNSA may not have optimal assurance that the technology will work as intended before starting construction. However, in January 2014, NNSA began (1) reevaluating alternatives to the UPF that may not include machining operations and (2) developing a uranium infrastructure strategy, which is a framework for how NNSA will maintain all uranium capabilities into the future. It is too soon to determine if the draft uranium strategy, scheduled to be issued in April 2014, will outline actions to address this risk.
Funding risk . Instead of using UPF project funds, NNSA has primarily funded UPF technology development activities from a limited research and development program. As a result of budget constraints in this program, for fiscal year 2014, 7 of the 19 technology projects the UPF contractor considered priority were not funded. Per a corrective action plan recently developed, the UPF Assistant Project Manager for Technology is responsible for determining which technology development activities should be funded directly with UPF project funds and is to prepare a cost estimate for those activities. This official said he expects to complete these estimates in March 2014.

section_title: Letter
paragraphs: The Y-12 National Security Complex in Oak Ridge, Tennessee, is the  National Nuclear Security Administration’s (NNSA) site for conducting  enriched uranium activities, producing uranium-related components for  nuclear warheads and bombs, and processing nuclear fuel for the U.S.  Navy. NNSA is a separately organized agency within the Department of  Energy (DOE). According to NNSA documents, the Y-12 plant’s current  enriched uranium operations, which are conducted in four separate  facilities, have key shortcomings including: (1) an inefficient work flow; (2)  continually rising operations and maintenance costs due to facility age;  and (3) hazardous processes that could expose workers to radiological  contamination, among other things.
To address these shortcomings, in 2004, NNSA decided to construct a  new Uranium Processing Facility (UPF). According to NNSA documents,  the UPF will consist of a single, consolidated facility less than half the size  of existing facilities. As NNSA consolidates its facilities, the agency plans  to develop several advanced technologies to make uranium processing  and component production safer, more effective, and more efficient.  Uranium processing uses chemicals and other means to recover enriched  uranium from multiple sources in NNSA’s inventory. Component  production includes enriched uranium metalworking and other processes  to assemble new or refurbished nuclear weapons components. In  November 2010, we reported on the extent to which the UPF is to use  new, experimental technologies, and resultant risks.found that
NNSA is using a systematic approach to assess the maturity of its
NNSA may not have assurance that all technologies will work as  intended, and the UPF could have to revert to existing or alternative  technologies, which could result in design changes, higher costs, and  schedule delays.
At the request of the Senate Appropriations Committee, Subcommittee on  Energy and Water Development and, in accordance with the Fiscal Year  2013 National Defense Authorization Act, GAO is mandated to submit  quarterly reports on the UPF. We issued our first report in July 2013,  which found that key assumptions contained in multiple cost estimates  proved to be inaccurate and were the primary factors that contributed to  the UPF’s cost increase from $1.1 billion in 2004 to $6.5 billion in 2012.  We issued our second report in October 2013, which found that the  Defense Nuclear Facilities Safety Board—an independent executive  branch agency created by Congress in 1988 to assess safety conditions  at DOE’s defense nuclear facilities—had identified safety concerns with  the UPF’s design, and that NNSA had taken actions to address most of  these concerns. The objectives for this third quarterly report are to  identify (1) additional risks, if any, since our November 2010 report of  using new technologies associated with the UPF and (2) NNSA’s actions,  if any, to address those risks.
To do this work, we reviewed DOE’s key project management order that  establishes project management requirements, including those for  technology development, as well as the order’s accompanying technology  development guidance. In addition, we reviewed UPF technology  maturation plans, UPF technology risk assessments, and UPF technology  risk reduction plans. We also reviewed an August 2013 report by an  NNSA independent peer review team that examined various aspects of  the UPF project, including technology development. The peer review  report contained multiple technology development related findings and  recommendations, and we also reviewed NNSA’s corrective action plan  for addressing these findings and recommendations. We interviewed UPF  contractor representatives responsible for managing technology  development efforts, as well as NNSA officials who oversee this process.  We visited the Y-12 plant and received technology development related  briefings from NNSA officials and UPF contractor representatives and  visited the UPF’s technology research and development facilities.
We conducted this performance audit from August 2013 to April 2014 in  accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
subsections: section_title: Background
paragraphs: In 1990, we first designated DOE program and contract management as  an area at high risk of fraud, waste, abuse, and mismanagement. In  January 2009, to recognize the progress made at DOE’s Office of  Science, we narrowed the focus of the high-risk designation to two DOE  program elements, NNSA and the Office of Environmental Management.  In February 2013, our most recent high-risk update, we narrowed this  focus to major projects (i.e., projects over $750 million) at NNSA and the  Office of Environmental Management. DOE has taken some steps to  address our concerns, including developing an order in 2010 (Order  413.3B) that defines DOE’s project management principles and process  for executing a capital asset construction project, which can include  building or demolishing facilities or constructing remediation systems.NNSA is required by DOE to manage the UPF construction project in  accordance with this order. The project management process defined in  Order 413.3B requires DOE projects to go through five management  reviews and approvals, called “critical decisions” (CD), as they move  forward from project planning and design to construction to operation.  The CDs are as follows:
CD 0: Approve a mission-related need.
CD 1: Approve an approach to meet a mission need and a preliminary  cost estimate.
CD 2: Approve the project’s cost, schedule and scope targets.
CD 3: Approve the start of construction.
CD 4: Approve the start of operations.
In August 2007, the Deputy Secretary of Energy originally approved CD 1  for the UPF with a cost range of $1.4 to $3.5 billion. In June 2012, the  Deputy Secretary of Energy reaffirmed CD 1 for the UPF with a cost  range of $4.2 to $6.5 billion and approved a phased approach to the  project, which deferred significant portions of the facility’s original scope.  According to NNSA documents, this deferral was due, in part, to the  project’s multibillion dollar increased cost estimate and to accelerate the  completion of the highest priority scope. In July 2013, NNSA decided to   Table 1 shows the  combine CD 2 and CD 3 for the first phase of UPF.UPF’s phases, scope of work, cost estimate, as of June 2012, and  proposed start of operations.
However, the future status of the UPF project and the process by which  enriched uranium operations at the Y-12 plant will be modernized are  unclear. NNSA has recently decided to: (1) delay later UPF phases, (2)  assess options other than the UPF for enriched uranium operations at the  Y-12 plant, (3) change a key technological requirement for the UPF, and  (4) develop a strategy for how NNSA will maintain the Y-12 plant’s  uranium capabilities into the future. Specifically:
NNSA is delaying UPF Phase II and Phase III a minimum of 2  years. In a December 2013 testimony before the Defense Nuclear  Facilities Safety Board, the NNSA Acting Administrator said that the  agency does not expect to move out the facilities that house  machining operations (Building 9215) as well as assembly and  dismantlement operations (Building 9204-2E) until 2038 due primarily  to budget constraints. NNSA previously estimated that these  capabilities would be operational in the UPF no later than 2036.
NNSA is currently evaluating alternatives to the UPF. In early  January 2014, NNSA began to consider options other than the UPF  for enriched uranium operations at the Y-12 plant because, according  to the UPF Federal Project Director, the project is facing budget  constraints, rising costs, and competition from other high-priority  projects within NNSA—such as the planned B61 bomb and W78/88  warhead nuclear weapon life extension projects. NNSA has initiated a  formal analysis of UPF alternatives—an analytical comparison of the  operational effectiveness, costs, and suitability of proposed solutions  to address a mission need. According to the UPF Federal Project  Director, the analysis of alternatives, which is scheduled to be  completed by April 15, 2014, will include a potential solution for  replacing only uranium purification and casting capabilities (Building  9212) by July 2025 at a cost that does not exceed $6.5 billion.  According to the NNSA Acting Administrator, NNSA does not plan to  continue full operations in Building 9212, which has been operational  for over 60 years, past 2025 because the building does not meet  modern safety standards, and increasing equipment failure rates  present challenges to meeting required production targets. While  NNSA is undertaking the analysis of alternatives, the UPF project  team is currently (1) delaying the start of approximately $300 million in  site preparation and long lead procurement activities and (2) will no  longer complete engineering work to have the UPF’s design reach the  90 percent complete milestone by August 2014, as previously  planned.
NNSA is currently evaluating alternatives for a key uranium  purification technology originally planned for UPF Phase I, which  now may be part of UPF Phase II. In late January 2014, NNSA  decided to consider alternatives from its baseline uranium purification  technology—which was to be part of UPF Phase I scope and had  been under development since 2005—to a new technology, according  to the UPF Federal Project Director. NNSA believes the new  technology will require less space in the UPF and be more efficient to  operate. In early February 2014, NNSA directed the UPF contractor to  suspend design efforts in two UPF processing areas impacted by the  potential technology change. Furthermore, NNSA is now considering  installing this new technology as part of UPF Phase II scope, pending  the results of further analysis.
NNSA is currently developing a Uranium Infrastructure Strategy  for the Y-12 plant. In early February 2014, the NNSA Deputy  Administrator for Defense Programs directed his staff to develop a  Uranium Infrastructure Strategy, which establishes the framework of  how NNSA will maintain the Y-12 plant’s uranium mission capabilities  into the future. Key aspects that are to be considered during the  strategy’s development include, among other things: (1) an evaluation  of the uranium purification capabilities and the throughput needed to  support requirements for life extension programs and nuclear fuel for  the U.S. Navy; (2) an evaluation of the alternatives to the UPF that  prioritizes replacement capabilities by risk to nuclear safety, security,  and mission continuity; (3) an identification of existing infrastructure as  a bridging strategy until replacement capability is available in new  infrastructure. A draft of the strategy is due to the Deputy  Administrator by early April 2014.
To assess the maturity of new technologies, DOE and NNSA adopted the  use of Technology Readiness Levels (TRL). DOE took this action in  response to our March 2007 report that recommended that DOE  develop a consistent approach to assess the extent to which new  technologies have been demonstrated to work as intended in a project  before starting construction.which is the least mature; through TRL 4, in which the technology is  validated in a laboratory environment; to TRL 9—the highest maturity  level, where the technology as a total system is fully developed,  integrated, and functioning successfully in project operations.
As shown in table 2, TRLs start with TRL 1,   we found that DOE’s TRL guidance was not  always consistent with best practices followed by other federal agencies,  as well as with our prior recommendations. Specifically, DOE’s TRL  guidance recommended that new technologies reach TRL 6—the level  where a prototype is demonstrated in a relevant or simulated environment  and partially integrated into the system—at the start of construction (CD  3). However, best practices followed by other federal agencies and our  prior recommendations state that new technologies should reach TRL 7— the level where a prototype is demonstrated in an operational  environment, has been integrated with other key supporting subsystems,  and is expected to have only minor design changes—at the start of  construction. In our November 2010 report, we recommended that the  Secretary of Energy evaluate where DOE’s guidance for gauging the  maturity of new technologies is inconsistent with best practices and, as  appropriate, revise the guidance to be consistent with federal agency best  practices. In September 2011, DOE issued its revised TRL guidance,  but the guidance does not incorporate federal agency best practices and  is not fully responsive to our recommendation. Specifically, DOE’s  revised TRL guidance continues to recommend that new technologies  reach TRL 6 at the start of construction, while stating that reaching TRL 7  at the start of construction is a recognized best practice.
In November 2010, we reported that NNSA was developing 10 advanced  uranium processing and nuclear weapon components production  technologies for the UPF.  Since that time, NNSA eliminated 1  technology as the agency removed certain operations from the UPF. In  April 2013, NNSA chartered an independent peer review team to examine  various aspects of the UPF project, including assessing the current TRLs  for new technologies. In an August 2013 report, the independent peer  review team found that 6 of the 9 new technologies were not as mature  as previously reported in the UPF contractor’s May 2013 TRL  assessment; the independent peer review report also stated that no  fundamental technology show stoppers were identified. In addition, the  independent peer review report contained multiple technology  development related findings and recommendations, and NNSA and the  UPF contractor developed a corrective action plan to address them. Table  3 provides a description of the new technologies, the phase in which each  technology will be deployed, and the TRL assessment concluded by the  UPF contractor in May 2013 and the UPF independent peer review in  August 2013.
section_title: New Technologies Planned for the UPF Face Five Additional Risks
paragraphs: Since our November 2010 report, we identified five additional risks  associated with using new technologies in the UPF. Specifically:  Integration risks for microwave casting technology. The August  2013 independent peer review team report raised concerns with  microwave casting—a process that uses microwave energy to melt  and cast uranium metal into various shapes—as it is planned to be  integrated in the UPF’s casting system.official, the casting system planned for the UPF will employ uranium  processing technology, equipment, and steps that are substantially  different than the casting system currently used at the Y-12 plant. For  example, microwave casting in the UPF will use glovebox  enclosures—a containment system of secured gloves attached to a  box that allows workers to process nuclear material inside the box  without risk of contamination. The independent review team found that  the UPF’s planned casting glovebox enclosures are: (1) large and  somewhat complex, (2) have not had their functionality tested, and (3)  have not been demonstrated with microwave casting. As such, the  independent review team concluded that microwave casting has not  been demonstrated in a relevant environment—a key requirement to  reach TRL 6.
Technology development risk for special casting technology. In  2012, the UPF project team determined that a different nuclear safety  control was needed for special casting—a custom process for casting  uranium metal into various shapes—as this process uses more  uranium than the regular casting process. For special casting, the UPF contractor is developing a nuclear safety control called  “entombment.” The entombment control—which uses multiple parts,  such as cylinders and an insulation material—would occupy void  volume where molten uranium metal could otherwise collect in the  event of an improper casting (i.e., mis-pour). However, a key  insulation material planned for use in the entombment control failed  an important series of performance tests in fiscal year 2013.  According to UPF contractor representatives, this failure and the need  to identify and test an alternative insulation material is now the  project’s most significant technology development risk and the primary  reason why the special casting technology is currently assessed to be  at TRL 3.
Transition risks if NNSA switches to a new uranium purification  technology. In 2005, NNSA decided to deploy the saltless direct  oxide reduction technology—a process that converts uranium dioxide  into a useable metal form—into the UPF. The August 2013 UPF  independent peer review report concluded that an alternate  technology called direct electrolytic reduction and electrolytic refining  (DER/ER; currently assessed to be at TRL 3 and 4, respectively)  could potentially reduce the UPF’s operating costs and produce less  radioactive waste compared with the saltless direct oxide reduction  technology. In a December 2013 testimony before the Defense  Nuclear Facilities Safety Board, the Acting NNSA Administrator stated  that early research and development investments in the DER/ER  technology are promising and NNSA is actively seeking to mature and  deploy the technology into UPF to minimize future waste streams.  NNSA is now considering installing this new technology as part of  UPF Phase II scope, pending the results of further analysis, and  directed the UPF contractor in February 2014 to suspend design  efforts in two UPF processing areas impacted by this potential  technology change.
UPF contractor representatives told us that incorporating DER/ER into the  UPF would require significant changes to the facility’s design. For  example, NNSA officials said that changing to DER/ER would require a  complete redesign of the processing areas and their equipment and may  require adding new support utilities and that the UPF facility would have  to revise its nuclear safety analysis. In addition, the August 2013 UPF  independent peer review report found that the UPF project team has not  conducted any nuclear criticality studies or developed any nuclear safety  controls for the DER/ER technology because the technology was not  planned for use in UPF at the time.
Assurance risks that the agile machining technology will work as  intended before making key project decisions. As stated earlier,  NNSA plans to approve a combined CD 2 (approved cost, schedule,  and scope targets) and CD 3 (approve start of construction) milestone  in for UPF Phase I, which includes the building exterior, all UPF  processing areas, and all UPF support systems. In short, UPF Phase I  will create key parameters that subsequent UPF phases must work  within. Agile machining—a system combining multiple machining  operations into a single process that fabricates metal into various  shapes—is the key technology planned for UPF Phase II. The August  2013 independent UPF peer review assessed agile machining to be at  TRL 4. In December 2013, NNSA decided to no longer fund agile  machining technology development efforts because (1) agile  machining is not considered a baseline technology for UPF Phase I as  it is part of the deferred scope and (2) NNSA is considering combining  agile machining development efforts with other machining  development efforts used in at the Y-12 plant. According to NNSA  officials, the UPF contractor has completed the design for the agile  machining prototype, but it will be the responsibility of the UPF Phase  II project to mature this technology.
GAO-07-336. which requires the successful deployment of all new technologies  planned for the UPF, including those scheduled for UPF Phase II.
Risk that funding mechanism for UPF technology development  activities may not be adequate to develop all new technologies.  According to NNSA officials and UPF contractor representatives,  NNSA has primarily funded UPF technology development activities  from the Y-12 plant-directed research and development (PDRD)  program, which requires projects from every part of the Y-12 plant to  compete for funding. From fiscal year 2005 to fiscal year 2013, the  $73 million in UPF technology development costs have been funded  by non-UPF project sources, such as the PDRD program, instead of  from the $1 billion specifically allotted to the UPF project, according to  the UPF contractor Project Manager. UPF contractor representatives  told us that NNSA made the decision to fund technology development  activities from non-UPF project sources because some UPF  technologies could be used for other operations at the Y-12 plant or at  other nuclear weapon stockpile programs. However, NNSA did not  select some UPF technology development projects identified as being  priority by the UPF project team for PDRD funding. For example, in  fiscal year 2013, 19 projects were considered priority by the UPF  project team, but NNSA did not fund 3 of these projects. For fiscal  year 2014, 19 projects were considered priority by the UPF project  team, but NNSA did not fund 7 of these projects. In addition, one of  the five UPF technology development risk reduction plans developed  by the UPF contractor is to “obtain additional PDRD funding,” but the  effectiveness of this plan is unclear given that existing UPF  technology development projects considered priority have not  received funding.
section_title: NNSA Is Taking Some Actions to Address Identified Risks
paragraphs: NNSA is currently taking some actions to address three of the five UPF  technology risks we have identified. NNSA is currently developing plans  and making programmatic decisions about the UPF that could address  the other two risks but, it is still too soon to determine if these actions will  sufficiently address these two risks. Specifically:
Microwave casting technology. To address the risks with integrating  microwave casting—a process that uses microwave energy to melt  and cast uranium metal into various shapes—into the UPF’s casting  system, the UPF contractor plans to issue a request for proposal in  March 2014 for the development of a prototype microwave casting  furnace. UPF contractor representatives said that they have had  preliminary discussions with two vendors about building the prototype.  According to NNSA officials, the UPF contractor will be required to  test the prototype in an integrated UPF configuration that includes  glovebox enclosures. If completed, we believe these planned actions  will help NNSA reduce this risk and identify further mitigation  measures that may need to be taken.
Special casting technology. For the entombment nuclear criticality  safety control planned for special casting—a custom process for  casting uranium metal into various shapes—UPF contractor  representatives told us that they would like to have a replacement  insulation material identified and successfully tested by June 2014.  However, NNSA officials said that this June 2014 date is optimistic  and may not be met. In addition, UPF contractor officials said they are  currently conducting a formal analysis of alternatives for the  entombment control. The UPF contractor expects to finish its analysis  by the end of January 2014 and brief the results and potential impacts  to senior NNSA management. If NNSA completes these planned  actions, we believe that the agency may have taken appropriate  actions to address this risk.
DER/ER technology. According to the UPF Federal Project Director,  in February 2014, the NNSA Deputy Administrator for Defense  Programs directed NNSA’s Production Office—the field office  responsible for contractor oversight and management of the Y-12  plant—to: (1) create a technology development plan for DER/ER, (2)  develop a preliminary cost estimate for DER/ER technology  development, (3) identify existing facilities at the Y-12 plant where  DER/ER could be deployed, and (4) use DER/ER in actual uranium  operations no later than 2021.
However, as noted above, the design of the two UPF processing  areas impacted by the potential switch to DER/ER has been  suspended. According to the UPF Federal Project Director, these  areas are considered part of UPF’s deferred scope which means that  (1) the UPF will reserve space for DER/ER capabilities and ensure  that all needed support utilities are available in the two processing  areas and (2) it will be the responsibility for the UPF Phase II project  team to install the DER/ER equipment into the UPF. Given the early  stages of NNSA’s planning, we believe that it is too soon to determine  if these actions will address this technology transition risk.
Agile machining technology. The UPF is to modernize and  consolidate all enriched uranium operations at the Y-12 plant in three  phases. Agile machining—a system that combines multiple machining  operations for fabricating metal into various shapes into a single  process—is the key technology planned for UPF Phase II. As stated  above, NNSA decided in December 2013 to no longer fund agile  machining technology development efforts (currently assessed at TRL  4) for multiple reasons. UPF contractor representatives told us that (1)  they have completed the design of an agile machining prototype; (2)  by the end of 2014, they will outline the actions needed to mature the  technology to TRL 6; and (3) the UPF Phase II project team will have  the responsibility to mature the technology.
NNSA is currently evaluating alternatives to the UPF, and the  outcome of this evaluation may require different agency actions to  address this risk. If NNSA decides to continue with a UPF that  includes machining operations, the agency will need to take action to  address a recommendation from the August 2013 UPF independent  peer review team. Specifically, the peer review team recommended  that the UPF project fabricate and test an agile machining prototype  before starting construction on the UPF. According to the peer review  team, implementing this recommendation is a high-priority action and  will help ensure the confident integration of the agile machining  technology into UPF at a later date. However, if NNSA decides to  construct a facility with only uranium purification and casting  capabilities—which do not include machining capabilities—the agency  will have to develop alternate plans that detail how machining  capabilities will be modernized and how the agile machining  technology will be matured. It is too soon to determine if the Uranium  Infrastructure Strategy that NNSA is currently developing and  scheduled to issue in draft form in early April 2014 will address this  issue. Given that NNSA is: (1) currently evaluating potential UPF  alternatives; (2) currently developing its Uranium Infrastructure  Strategy; and (3) planning to conduct machining operations in its  current facility, until at least 2038, we believe it is too early to tell if  NNSA is taking appropriate action to address this risk.
Technology development funding. The August 2013 UPF  independent peer review report recommended that the UPF project  fund more technology development activities from project funds  instead of PDRD funds. In October 2013, the UPF contractor issued a  corrective action plan to address the recommendations from the  August 2013 UPF independent peer review. This corrective action  plan: (1) lists planned and ongoing actions that the contractor and  NNSA will take to address each recommendation, (2) provides an  estimated date by which planned actions are to be completed, and (3)  identifies which UPF contractor representative or NNSA official is  responsible for completing the planned action. As part of this  corrective action plan, the UPF Assistant Project Manager for  Technology is responsible for determining which technology  development activities should be funded directly with UPF project  funds and is to prepare a cost estimate for those activities. The UPF  Assistant Project Manager for Technology told us that he expects to  complete the planned corrective action by the end of March 2014.  Adding required technology development activities to the UPF’s cost  estimate may increase the project’s cost estimate, but it may also  improve the accuracy and comprehensiveness of the estimate. If  NNSA completes these planned actions, we believe that the agency  may have taken appropriate actions to address this risk.
section_title: Conclusions
paragraphs: Enriched uranium operations at the Y-12 plant play a vital role in the  national security of the United States by producing critical components for  the nuclear weapons stockpile and by supplying fuel for the Navy. There  is a clear need for NNSA to replace the old, deteriorating, and high- maintenance facilities at the Y-12 plant. NNSA is currently reevaluating  the UPF project and may decide to construct a facility that is smaller and  contains only select enriched uranium processing capabilities. Whether  NNSA continues with the UPF project or chooses to undertake a smaller  project, the facility will likely cost billions of dollars, and its ability to meet  critical national security needs will depend on the successful development  and deployment of new technologies. It is encouraging that NNSA has  taken some steps to manage the development of these technologies.  However, as we have detailed in this and other reports, we are concerned  that, nearly a decade after the project started, the UPF project continues  to face key technology-related risks, including the potential transition risks  associated with NNSA’s recent decision to consider alternatives to a new  uranium purification technology. NNSA is in the process of making key  programmatic decisions with the UPF and has some ongoing efforts that  may address identified risks if fully and successfully implemented. We will  continue to monitor NNSA’s progress in addressing these risks as part of  our UPF critical decisions reviews as directed by the Fiscal Year 2013  National Defense Authorization Act.
In addition, NNSA has not taken action to address the two  recommendations related to UPF technology development we made in  our November 2010 report: (1) that NNSA ensure that new technologies  reach the level of maturity called for by best practices prior to CDs being  made on the UPF project and (2) that the agency report to Congress any  decisions to approve cost and schedule performance baselines or to  begin construction of UPF without first having ensured that project  technologies are sufficiently mature. NNSA generally agreed with those  recommendations, and we continue to believe that best practices followed  by other federal agencies for managing technology development,  particularly reaching TRL 7 at the start of construction, are important. By  not fully incorporating these practices, NNSA may not be able to ensure  that the UPF and its other projects can be completed on time and within  budgets.
section_title: Agency Comments and Our Evaluation
paragraphs: We are not making any new recommendations in this report. We provided  a draft of this report to NNSA for comment.  In written comments (see  Appendix I), the acting NNSA Administrator stated that NNSA’s existing  TRL guidance, which encourages the achievement of TRL 7 prior to the  start of construction (CD 3), provides adequate protection against the  premature commitment of resources while giving projects flexibility to  make decisions between seeking TRL 6 and TRL 7. In addition, the acting  NNSA Administrator stated the agency is closely overseeing and  managing UPF’s ongoing technology development efforts using on-site  personnel and independent reviews to confirm reported progress while  also keeping senior management informed of development efforts.
We continue to believe that DOE should fully adhere to best practices in  its technology development activities. DOE’s guidance recognizes that  achieving a TRL 7 at the start of construction is a best practice and DOE  encourages—but does not require—projects to achieve this level of  readiness.  Achieving TRL 7—the level where a prototype is  demonstrated in an operational environment, has been integrated with  other key supporting subsystems, and is expected to only have minor  design changes—does require more time, effort, and money than  achieving TRL 6. However, TRL 7 is seen as a best practice because it  provides greater assurance the new technologies will work as intended  before making very significant resource investments in construction  activities, which for the UPF will total billions of dollars. Notably, DOD  follows best practices in this area and recommends projects reach TRL 7  before production and deployment, or the equivalent of beginning  construction on a DOE project.
Regarding NNSA’s oversight of technology development efforts, it is clear  that certain NNSA actions, such as the August 2013 UPF independent  peer review, helped identify and respond to some technology  development issues.  However, since NNSA is currently considering  alternatives to UPF and developing the Uranium Infrastructure Strategy  for the Y-12 plant, it is too early to determine if the oversight and  management actions cited by NNSA will be sufficient to fully address all  the risks we identified.
NNSA also provided technical comments, which we incorporated as  appropriate.
We are sending copies of this report to the appropriate congressional  committees, the Secretary of Energy, the Administrator of NNSA, and  other interested parties. In addition, the report is available at no charge on  the GAO website at http://www.gao.gov.
If you or your staff members have any questions on matters discussed in  this report, please contact me at (202) 512-3841 or trimbled@gao.gov.  Contact points for our Offices of Congressional Relations and Public  Affairs may be found on the last page of this report. GAO staff who made  major contributions to this report are listed in appendix II.
section_title: Appendix I: Comments from the National Nuclear Security Administration
paragraphs: NNSA’s attachment  provided technical  comments which we  incorporated as  appropriate in the final  report.
subsections: section_title: GAO Contact
paragraphs: David C. Trimble, (202) 512-3841 or trimbled@gao.gov.
section_title: Staff Acknowledgments
paragraphs: In addition to the individual named above, Jonathan Gill, Assistant  Director; Patrick Bernard; Antoinette Capaccio; Will Horton; Katrina  Pekar-Carpenter; Dr. Timothy Persons, and Ron Schwenn made key  contributions to this report.