Plutonium Disposition: Proposed Dilute and Dispose Approach Highlights Need for More Work at the Waste Isolation Pilot Plant
Published: 2017-09-05T00:00:00

Fast Facts:
As part of its commitment to nonproliferation, the United States is planning to dispose of 34 metric tons of weapons-grade plutonium. The Department of Energy is looking into whether this plutonium could be diluted and disposed of at a geologic repository for defense waste in New Mexico.
Since this repository can only accept a limited amount of such waste, we recommended that the department develop a plan for expanding disposal space at this repository.

Highlights:
section_title: Why GAO Did This Study
paragraphs: The United States has pledged to dispose of 34 metric tons of surplus, weapons-grade plutonium. The current U.S. approach relies on disposing of the plutonium by irradiating it as MOX fuel—a mixture of plutonium and uranium oxides—in modified commercial nuclear reactors. Due to a significant rise in cost, DOE recently proposed terminating the MOX approach in favor of the dilute and dispose approach, which DOE stated may be less expensive. Under this approach, plutonium would be diluted with inert material and then disposed of in a geologic repository.
GAO was asked to review DOE's planning for both the MOX and dilute and dispose approaches. This report examines: (1) the extent to which DOE's revised cost estimates for completing the construction of the MOX facility and for completing the overall Plutonium Disposition Program met best practices, (2) the status of NNSA's development of a life-cycle cost estimate for the dilute and dispose approach, and (3) the extent to which DOE has sufficient disposal space and statutory capacity at WIPP to dispose of all defense TRU waste, including waste from the dilute and dispose approach. GAO reviewed documents and interviewed DOE and NNSA officials, including officials from five major waste-generating sites.
section_title: What GAO Found
paragraphs: In August 2016, the Department of Energy's (DOE) revised cost estimate for completing construction of the Mixed-Oxide (MOX) Fuel Fabrication Facility was approximately $17.2 billion and assumed annual funding of $350 million. This estimate substantially met best practices and can be considered reliable as it substantially met all four characteristics of a high-quality cost estimate: comprehensive, well-documented, accurate, and credible. In contrast, DOE's National Nuclear Security Administration (NNSA) has not yet applied best practices when revising its life-cycle cost estimate of $56 billion for the Plutonium Disposition Program using the MOX approach, as GAO previously recommended. This is because NNSA officials developed the revised life-cycle cost estimate to satisfy an annual requirement to record the plutonium environmental liability on departmental financial statements that were due in September 2016.
NNSA is developing a life-cycle cost estimate for completing the Plutonium Disposition Program using the dilute and dispose approach, which would dispose of diluted plutonium at DOE's Waste Isolation Pilot Plant (WIPP). WIPP is an underground repository for the disposal of transuranic (TRU) nuclear waste, which is waste contaminated by nuclear elements heavier than uranium, such as diluted plutonium. NNSA is currently assessing the extent to which any new equipment and facilities would be needed to pursue this approach, and it expects to develop an independently validated life-cycle cost estimate for the program by late 2018. NNSA has outlined an initial set of milestones for the program using the dilute and dispose approach; these milestones include program elements such as preparing the plutonium for dilution, diluting the plutonium into waste and securely storing it, and disposing of it at WIPP.
DOE does not have sufficient space at WIPP to dispose of all defense TRU waste. DOE's current plan is to fill the existing disposal space in WIPP by 2026, and additional space will need to be excavated to dispose of all the waste included in DOE's current TRU waste inventory report. While DOE officials recognize that expansion of WIPP's disposal space may be necessary in the future, they have not analyzed or planned for the facility's expansion because their focus has been on resuming operations at WIPP, which had been suspended in 2014 after two separate accidents at the facility. Specifically, GAO found the following:
DOE's TRU waste management plan, which includes planning for WIPP, covers a 5-year period and does not address possible expansion. Moreover, DOE's TRU waste management plan does not include a schedule for expanding DOE's disposal space before existing space is full.
Expanding WIPP's disposal space will require regulatory approval that is expected to take several years. However, DOE modeling that is needed to begin the regulatory approval process is not expected to be ready until 2024.
Without developing a plan for WIPP that includes an integrated schedule for completing the regulatory approval process and constructing new space before WIPP's existing space is full, DOE does not have reasonable assurance that it will be able to expand the repository in a timely manner.
section_title: What GAO Recommends
paragraphs: GAO is making four recommendations, including that DOE develop a plan for expanding WIPP's disposal space that includes a schedule for completing the expansion before existing space is full. DOE concurs with the recommendations.

section_title: Letter
paragraphs: As a key step for nuclear nonproliferation, the United States and Russia  pledged under the Plutonium Management and Disposition Agreement,  signed in 2000, to each dispose of at least 34 metric tons (MT) of  weapons-grade plutonium that is no longer needed for defense  purposes. Russia suspended its implementation of the agreement in  October 2016, citing delays in the United States’ implementation of the  agreement, among other reasons, but Department of Energy (DOE)  officials stated that they plan to continue to seek safe disposition of  surplus U.S. plutonium. According to the National Nuclear Security  Administration (NNSA), the amount of plutonium that the United States  and Russia pledged to dispose of under the agreement is sufficient to  manufacture 17,000 nuclear weapons. Plutonium poses a proliferation  risk and a risk to human health and the environment if not managed  safely. The agreement, as modified, provides that disposition shall be by  irradiation as fuel in nuclear reactors or any other methods that both  countries may agree to in writing. Under the agreement, the United States  would dispose of its plutonium as mixed-oxide (MOX) fuel—a mixture of  plutonium and uranium oxides—in modified commercial nuclear reactors.  If MOX fuel is used in a reactor, the plutonium in the fuel is transformed  into radioactive spent fuel similar to the spent fuel produced in  commercial reactors, which prevents it from being reused in a nuclear  weapon. This effort is managed by NNSA through its Plutonium  Disposition Program, which was established in 1997 to address the  disposition of surplus weapons-grade plutonium at the end of the Cold  War.
As part of its Plutonium Disposition Program, NNSA began constructing  the MOX Fuel Fabrication Facility (MOX facility) in 2007 at DOE’s  Savannah River Site in South Carolina. In 1997, DOE originally estimated  the MOX facility would cost approximately $1.4 billion and be completed  in 2004; however, by 2012, NNSA had spent about $3.4 billion and  estimated that it needed approximately $4 billion more to complete  construction by 2019. We reported in February 2014 that NNSA’s cost  estimate for completing construction of the MOX facility and its overall  life-cycle cost estimate for the Plutonium Disposition Program were  unreliable and that the program could be at risk for further cost  increases. In its fiscal year 2014 budget justification, DOE stated that  pursuing the MOX approach may be unaffordable due to the growth in  costs for completing the program, and it proposed a slowdown of program  activities while it assesses other alternative plutonium disposition  approaches.
In April 2014, DOE completed an analysis of plutonium disposition  options that identified an alternative disposition approach that could  significantly reduce the life-cycle cost of the Plutonium Disposition  Program. This alternative would involve diluting the plutonium and  disposing of it in a geologic repository. Two DOE-contracted reviews of  this analysis—one by the Aerospace Corporation’s Federally Funded  Research and Development Center and one by Oak Ridge National  Laboratory—estimated that the dilute and dispose approach could  significantly reduce the life-cycle cost of the Plutonium Disposition  Program, compared with continuing the program using the MOX  approach. Given the conclusions from these reviews, DOE’s fiscal year  2017 budget request proposed to terminate construction of the MOX  facility and pursue the dilute and dispose approach. Under this proposal,  plutonium would be diluted with inert material to inhibit its future use in  weapons. It would then be packaged and shipped to a repository for  permanent disposal, most likely DOE’s Waste Isolation Pilot Plant  (WIPP), an underground repository located near Carlsbad, New Mexico,  that is used for disposing of defense transuranic (TRU) waste. According  to DOE officials, the diluted plutonium meets DOE’s criteria for TRU  waste. However, WIPP’s current design includes a finite amount of  disposal space, and the statute that established the repository also  placed a limit on its TRU waste disposal capacity. WIPP is managed by  DOE’s Office of Environmental Management (EM) and is the only  disposal site for TRU waste in the United States. Complicating matters,  disposal operations at WIPP were suspended in 2014 as a result of two  separate accidents at the facility involving a fire and a radioactive release.  According to DOE officials, while the majority of the underground  radioactive release was directed through the repository’s ventilation  system filters, a small portion bypassed filters and was released into the  atmosphere. We reported in August 2016 that DOE missed its initial  estimated date of March 2016 for reopening WIPP, in part because it did  not develop the estimates using all cost and schedule estimating best  practices.  DOE resumed disposing of TRU waste at WIPP in January  2017.
In August 2016, in response to a provision in the National Defense  Authorization Act for fiscal year 2016, DOE’s Office of Project  Management Oversight and Assessments developed a revised cost  estimate of approximately $17.2 billion to complete construction of the  MOX facility by 2048. According to NNSA officials, NNSA included this  new estimate in revising the overall life-cycle cost estimate for the  program using the MOX approach, which NNSA now estimates to be  approximately $56 billion. In addition to these estimates, a provision in the  Explanatory Statement for the Consolidated Appropriations Act of 2016  calls for DOE to provide to Congress a life-cycle cost and schedule  estimate if the program were to instead use the dilute and dispose  approach. While NNSA examines the activities needed to implement the  dilute and dispose approach, Congress continues to authorize and fund  the ongoing construction of the MOX facility.
You asked us to review DOE’s planning for the Plutonium Disposition  Program under both the MOX and dilute and dispose approaches. This  report examines (1) the extent to which DOE’s revised cost estimate for  completing construction of the MOX facility, and the revised life-cycle  estimate for completing the Plutonium Disposition Program using the  MOX approach met cost estimating best practices, (2) the status of  NNSA’s development of a life-cycle cost estimate for completing the  Plutonium Disposition Program using the dilute and dispose approach,  and (3) the extent to which DOE has sufficient disposal space and  statutory capacity at WIPP to dispose of all defense TRU waste, including  the diluted plutonium resulting from the dilute and dispose approach.
To determine the extent to which DOE’s revised cost estimate for  completing construction of the MOX facility and the revised life-cycle  estimate for completing the overall program using the MOX approach met  best practices, we reviewed DOE and contractor documents and  interviewed DOE and NNSA officials who were involved in developing  DOE’s revised estimates. We compared the steps DOE followed in  developing the construction cost estimate to the 12 best practice steps  outlined in our cost estimating guide that, when followed correctly, should  result in a high-quality, reliable cost estimate. We provided a draft of our  assessment to DOE and revised the draft, as appropriate, after  discussing our assessment with DOE officials and receiving additional  information from them.
To determine the status of NNSA’s development of a life-cycle cost  estimate for completing the Plutonium Disposition Program using the  dilute and dispose approach, we reviewed the planning documents that  had been completed to date, including documents that outlined the scope  of the program relying on the dilute and dispose approach and included  dates for completing key program milestones. We also interviewed  NNSA officials to determine the extent of planning they had completed  and the schedule for completing the remaining plans. We visited DOE’s  Savannah River Site to interview NNSA officials responsible for  evaluating the dilute and dispose approach and officials from EM’s project  to dilute the 6 MT of non-pit plutonium. During this visit, we also reviewed  a demonstration mock-up of the plutonium dilution equipment that EM  already had in operation.
To determine the extent to which DOE has sufficient disposal space and  statutory capacity at WIPP to dispose of all defense TRU waste, including  the diluted plutonium resulting from the dilute and dispose approach, we  reviewed relevant legislation relating to WIPP’s statutory capacity, as well  as DOE’s WIPP annual TRU waste inventory report and data from the  Waste Data System, which tracks the waste already disposed of in the  repository. To assess the reliability of the DOE’s inventory, we reviewed  documents on its development and interviewed officials responsible for  maintaining it. Based on our review, we determined that the data it  contains are sufficiently reliable for our purposes. We also conducted a  site visit to WIPP to interview DOE officials responsible for managing  WIPP operations to understand how the waste disposal space is  managed and how they plan for DOE’s future disposal needs. To  understand what efforts were ongoing to study the impact of disposing of  diluted plutonium at WIPP, we interviewed officials from Sandia National  Laboratories who are responsible for analyzing potential changes at  WIPP. To evaluate potential sources of TRU waste from generator sites  that may not be included in DOE’s inventory report, to understand how  such sites estimate the amount of TRU waste they will need to ship to  WIPP, and to get these sites’ perspectives on potential disposal space  availability and capacity issues, we reviewed documents from and  interviewed officials at DOE’s five major waste-generating sites.  Specifically, we conducted interviews with officials from the Hanford Site  in Washington state, Idaho National Laboratory, Los Alamos National  Laboratory in New Mexico, Oak Ridge National Laboratory in Tennessee,  and Savannah River Site in South Carolina. These interviews included a  site visit to Idaho National Laboratory. In addition, to understand the  regulatory process through which DOE must work to operate WIPP, we  spoke to officials from agencies that have regulatory authority over the  WIPP facility—the U.S. Environmental Protection Agency (EPA) and the  State of New Mexico Environment Department.
We conducted this performance audit from December 2015 to September  2017 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: This section provides information on NNSA’s Plutonium Disposition  Program, DOE’s WIPP, and GAO cost estimating best practices.
subsections: section_title: NNSA’s Plutonium Disposition Program
paragraphs: NNSA established the Plutonium Disposition Program in 1997 to address  the disposition of weapons-grade plutonium at the end of the Cold War.  To date, the United States has declared a total of 61.5 MT of plutonium  as excess to defense needs. This quantity includes the 34 MT that is  subject to the Plutonium Management and Disposition Agreement. The  majority of the 34 MT is in the form of pits, which are nuclear weapons’  central cores and are commonly produced using plutonium. The  remainder of the 34 MT is in non-pit forms, such as metal and oxides. In  addition to the 34 MT, DOE officials told us that EM is in the early stages  of diluting approximately 6 MT of non-pit plutonium at the Savannah River  Site, some of which has already been sent to WIPP for disposal.
NNSA’s Plutonium Disposition Program manages the multiple projects  and facility operations that comprise the effort to dispose of U.S. surplus,  weapons-grade plutonium. For both the MOX and dilute and dispose  approaches, NNSA plans to store pits at the Pantex Plant in Texas, and  to disassemble some of the pits and convert some of the plutonium into  oxide at Los Alamos National Laboratory. At the Savannah River Site,  NNSA plans to fabricate the plutonium oxide into MOX fuel for the MOX  approach or dilute the plutonium for disposal as TRU waste. In addition,  NNSA estimates that both approaches will produce TRU waste that will  need disposal at WIPP. Figure 1 illustrates the MOX approach and the  dilute and dispose approach for disposing of surplus plutonium.
The MOX facility is designed to remove impurities from plutonium  feedstock obtained from pits, form the plutonium into MOX fuel pellets,  and fabricate these pellets into fuel assemblies for use in a reactor. The  facility is designed to be a reinforced concrete structure measuring about  600,000 square feet (including support buildings) and, when complete,  would include about 300 separate process systems using approximately  23,000 instruments; 85 miles of process piping; 500,000 linear feet of  conduit; 3,600,000 linear feet of power and control cable; and 1,000 tons  of heating, ventilation, and air conditioning duct work. As part of the  Plutonium Disposition Program, NNSA in 2015 completed construction of  the Waste Solidification Building, which is located near the MOX facility  and is designed to process and dispose of liquid waste from the MOX  facility. The building is a 33,000-square-foot reinforced concrete structure  and includes tanks, evaporators, and solidification equipment to process  radioactive liquid waste streams from the MOX facility into solid waste  forms suitable for disposal at WIPP.
According to NNSA officials, the dilute and dispose approach is based on  a process first used by DOE in 1999 to remove excess plutonium stored  at its former site at Rocky Flats near Denver, Colorado; this process is  currently being used at the Savannah River Site. Approximately 5 MT of  plutonium material from Rocky Flats and other DOE sites were diluted  and shipped to WIPP for disposal. In addition, as a result of plutonium  consolidation activities across the DOE complex, non-pit plutonium is  stored at the Savannah River Site. In 2011, EM approved the dilution of  some of this non-pit plutonium at the site and disposal of this material at  WIPP. In 2016, DOE made a formal decision to continue the dilute and  dispose process for 6 MT of non-pit plutonium. As of March 2017,  according to a DOE official, EM had diluted approximately 67.2 kilograms  of this plutonium.
section_title: Recent Cost Estimates for the MOX and Dilute and Dispose Approaches
paragraphs: In April 2014, DOE completed an analysis of alternative disposition  options in its 2014 Plutonium Disposition Working Group Report. This  report found that the dilute and dispose approach would be significantly  less expensive than the MOX approach and would face fewer technical  risks. After DOE published this report, three other groups also estimated  the life-cycle costs of the program using the MOX approach or the dilute  and dispose approach, producing a range of estimated costs for both.  Specifically:
The Plutonium Disposition Working Group estimated in its report that  the life-cycle cost of the program using the dilute and dispose  approach would be approximately $8.8 billion and that the life-cycle  cost of the program using the MOX approach would be approximately  $25.1 billion—each of these estimates assumed annual funding of  $500 million for construction activities. The report, however, reached  this conclusion based on a life-cycle cost estimate for the dilute and  dispose approach that had a high level of uncertainty and a life-cycle  cost estimate for the MOX approach that we found to be unreliable in  a prior report.
In response to congressional direction, DOE contracted with the  Aerospace Corporation to assess the validity of the Plutonium  Working Group’s analysis and findings. In April 2015, Aerospace  issued a report that also found that the dilute and dispose approach  would be less costly than the MOX approach. The report estimated  that, not including any prior costs for the Plutonium Disposition  Program through fiscal year 2013, the life-cycle cost of the program  using the dilute and dispose approach would be approximately $17.2  billion. In comparison, the report estimated that the remaining costs  to complete the program using the MOX approach would be  approximately $110.4 billion.
To further evaluate the MOX and dilute and dispose approaches, the  Secretary of Energy requested that a team at Oak Ridge National  Laboratory assess what the preferred approach for the Plutonium  Disposition Program should be. In August 2015, the resulting report,  known as the Red Team report, concluded that the dilute and dispose  approach has lower technical risks and lower costs. Specifically, the  report concluded that the dilute and dispose approach would require  approximately $400 million annually for the duration of the program,  compared to approximately $700 million to $800 million annually using  the MOX approach for approximately the same duration of time.
In 2015, CB&I AREVA MOX Services LLC, the contractor constructing  the MOX facility, commissioned High Bridge Associates to develop a  series of reports that assessed the MOX approach and the dilute and  dispose approach. In contrast to the other three reports, High Bridge  concluded that using the dilute and dispose approach would introduce  significant risks and thus could be the more costly approach. High  Bridge’s report estimated that the life-cycle cost of the program using  the dilute and dispose approach would be from $21.9 billion to $41.5  billion and that the life-cycle cost of the program using the MOX  approach would be $19.4 billion. The higher costs for the dilute and  dispose approach were primarily driven by High Bridge’s conclusion  that placing the 34 MT of diluted plutonium in WIPP would increase  the potential for an uncontrolled nuclear chain reaction in the WIPP  underground and that DOE would need to undertake costly  compensatory steps to avoid such risks. However, according to  DOE officials, High Bridge staff did not consult with DOE officials in  developing its reports. Officials at Sandia National Laboratories who  are responsible for evaluating the impact of any changes to WIPP on  the facility’s long-term performance explained that they had reviewed  the findings of the High Bridge study and found that the study used  unrealistic assumptions regarding the conditions at WIPP and  overstated the potential for an uncontrolled nuclear chain reaction as  a result. Nonetheless, the officials explained that an analysis that  Sandia has under way looking at the disposal of diluted plutonium will  include an analysis of the potential for an uncontrolled nuclear chain  reaction and will determine whether DOE would need to take any  compensatory steps to decrease the potential for such an event.
section_title: WIPP and TRU Waste Volumes
paragraphs: If DOE were to pursue the dilute and dispose option, the 34 MT of diluted  plutonium would likely be disposed at WIPP near Carlsbad, New Mexico.  WIPP was established by the WIPP Land Withdrawal Act, which places a  limit on the amount of TRU waste that can be disposed of in WIPP—the  act caps the amount of TRU waste at 175,565 cubic meters (m) and  specifies that WIPP is intended only for the disposal of radioactive waste  generated from atomic energy defense activities.
TRU waste at WIPP is divided into “contact-handled” and “remote- handled,” based on the amount of radiation dose measured at the surface  of the waste container. Contact-handled waste comprises the vast  majority of the TRU waste planned for disposal at WIPP. WIPP was  designed to safely dispose of TRU waste in deep underground rooms  excavated out of an ancient salt formation more than 2,000 feet below the  earth’s surface. DOE analysis has shown that, over a period of decades,  the salt will shift and collapse to encapsulate the waste, permanently  sealing it underground. The original design plan of the underground  portions of WIPP comprised 10 waste disposal units, or panels, for  placement of waste containers for final disposal. of TRU waste in 10 disposal  panels—8 of these panels were designed as individual disposal units, and the other 2  panels (panels 9 and 10) consist of access hallways running north to south through the  repository. Specifically, panel 9 is to the south and provides access to panels 3, 4, 5 and  6, and panel 10 to the north provides access to panels 1, 2, 7, and 8. of the performance assessment, and—in some cases—a federal  rulemaking process that includes public comment. EPA officials told us  that for less significant changes, DOE can notify EPA through a planned  change notice, which does not require the same level of review. However,  according to EPA officials, once DOE submits a notice, EPA can require  that DOE resubmit the change as a planned change request if EPA  judges the change to be significant enough to potentially impact WIPP’s  long-term performance. EPA also determines whether WIPP complies  with other federal environmental and public health and safety regulations,  including the Clean Air Act and the Solid Waste Disposal Act.
The New Mexico Environment Department also has regulatory authority  over WIPP through the WIPP hazardous waste facility permit. This permit  is issued under the New Mexico Hazardous Waste Act and New Mexico  regulations as authorized by EPA under the Resource Conservation and  Recovery Act. Changes or modifications to the WIPP permit must be  approved by the New Mexico Environment Department. There are three  classes of permit modifications (classes 1, 2, and 3) that vary in terms of  the level of review and the amount of supporting documentation required.  The type of permit change required depends on the type of change  requested, and New Mexico follows the guidelines outlined in federal  regulations for modifying hazardous waste facility permits. In general,  class 3 modifications require the most significant level of review.
section_title: DOE’s TRU Waste Planning
paragraphs: DOE has developed two documents to plan for how to handle the  department’s TRU waste—a TRU waste management plan, which  outlines how DOE will conduct TRU waste disposal operations over a 5- year time frame, and the annual TRU waste inventory report. According to  DOE officials, the TRU waste management plan is an operational  planning document and not a strategic plan that focuses on near-term  issues such as the number of shipments expected from waste generator  sites over the next 5 years. DOE’s annual TRU waste inventory report,  however, is used for strategic planning. This report is intended to keep  track of the TRU waste disposed of at WIPP and to estimate the volumes  of TRU waste planned for disposal at WIPP until the facility’s closure. On  an annual basis, DOE officials at WIPP send guidance to all DOE TRU  waste-generating sites on how each site should develop an updated  estimate of the amount of TRU waste it has stored at the site and the  amount it anticipates will be generated in the future. According to the  2015 guidance document, waste generators were asked to report stored  waste and waste they anticipated will be generated through 2050, when  WIPP is scheduled to stop accepting waste for disposal and begin the  process of closing the facility. DOE officials at WIPP take this data from  the waste generators and compile it into the annual inventory report.  According to the inventory report, these estimates of future TRU waste  planned for disposal at WIPP are to be used for, among other things,  strategic planning purposes, to support any requests to change the  design of the facility, and as a basis for WIPP’s performance assessment  as part of EPA’s 5-year recertification process. Since WIPP began  accepting waste in 1999, DOE has depended on the facility to support its  cleanup and national security missions. As of December 2015, DOE had  disposed of approximately 91,129 m of contact-handled TRU waste and  approximately 357 mcontainers. The radioactive contents, gases, and other materials ignited  and triggered a fire in the disposal room, igniting other materials in the  room. WIPP’s ventilation system failed to contain all of the airborne  radiological material underground and allowed a small amount of this  material to enter the environment. As a result of the release, portions of  the WIPP underground and the existing ventilation system were  radiologically contaminated. The suspension of WIPP’s operations as a  result of the accidents has impaired DOE’s ability to meet its cleanup and  national security missions as well as regulatory cleanup milestones  agreed to with states that host DOE sites. WIPP reopened and DOE  began limited waste disposal in January 2017. DOE plans to conduct  limited waste disposal until a new ventilation system and exhaust shaft  are installed in WIPP, which DOE officials stated is tentatively scheduled  for fiscal year 2021 (pending independent assessment validation).
section_title: DOE Capital Asset Acquisition Process
paragraphs: DOE is required to manage projects over a certain cost threshold in  accordance with DOE Order 413.3B. This order provides project  management requirements for managing the acquisition of capital  assets, with the stated goal of delivering fully capable projects within the  original performance baseline for cost and schedule and that meet  mission performance and other requirements. The order establishes five  critical decision processes for project development over the life of a  project, with each process ending with a major approval milestone—or  critical decision (CD) point. These CD points are as follows:
CD-0: Approve mission need.
CD-1: Approve alternative selection and cost range.
CD-2: Approve project performance baseline.
CD-3: Approve start of construction.
CD-4: Approve start of operations or project completion.
The order specifies the requirements that must be met—including for  developing and managing project cost and schedule estimates—to move  a project past each CD milestone. In addition, the order requires senior  management to review the supporting documentation and decide whether  to approve the project moving forward at each CD.
While DOE Order 413.3B establishes requirements for estimating the cost  of a capital asset project, these requirements do not apply to programs,  such as the Plutonium Disposition Program. In November 2014, we found  that DOE programs were not required to meet any cost estimating best  practices and concluded that because DOE does not require the use of  best practices for its programs, it is unlikely to consistently develop  reliable cost estimates. We recommended that DOE revise its program  and project management order to require that life-cycle cost estimates be  developed in accordance with our best practices. DOE agreed with our  recommendation and updated the order to require best practices for cost  and schedule estimate for projects, however, these requirements still are  not required for programs, such as the Plutonium Disposition Program.
section_title: GAO Cost-Estimating Best Practices
paragraphs: Drawing from federal cost-estimating organizations and industry, our cost  estimating guide provides best practices about the processes,  procedures, and practices needed for ensuring development of high- quality—that is, reliable—cost estimates. A high-quality cost estimate  helps ensure that management is given the information it needs to make  informed decisions. The guide identifies the following four characteristics  of a high-quality cost estimate. Specifically, such an estimate is: comprehensive when it accounts for all possible costs associated  with a project and contains a cost estimating structure in sufficient  detail to ensure that costs are neither omitted nor double-counted,  and the estimating teams’ composition is commensurate with the  assignment; well-documented when supporting documentation is accompanied  by a narrative explaining the process, sources, and methods used to  create the estimate and contains the underlying data used to develop  the estimate; accurate when it is not overly conservative or too optimistic and is  based on an assessment of the costs most likely to be incurred; and credible when it has been cross-checked with an independent cost  estimate, the level of confidence associated with the estimate has  been identified through the use of risk and uncertainty analysis, and a  sensitivity analysis has been conducted.
To develop a cost estimate that embodies these four characteristics, our  cost estimating guide lays out 12 best practice steps. For example, one  step—determining the estimating structure—includes the need to develop  a “product-oriented” work breakdown structure that reflects the  requirements and basis for identifying resources and tasks necessary to  accomplish the project’s objectives. A product-oriented work breakdown  structure is organized to reflect the cost, schedule, and technical  performance of project components. Such a work breakdown structure  allows a project to track cost by defined deliverables, promotes  accountability by identifying work products that are independent of one  another, and provides a basis for identifying resources and tasks for  developing a cost estimate. Table 1 includes a listing of each of the 12  steps and the four corresponding characteristics.
section_title: DOE’s Revised Cost Estimate for Constructing the MOX Facility Substantially Met Best Practices, but NNSA Has Not Yet Applied Best Practices to the Revised Life-cycle Cost Estimate for Completing the Overall Program
paragraphs: DOE’s revised cost estimate for completing construction of the MOX  facility substantially met best practices and, therefore, we believe it can  be considered reliable because it substantially met all four characteristics  of a high-quality estimate. In contrast, NNSA has not yet applied best  practices when revising its life-cycle cost estimate for the Plutonium  Disposition Program using the MOX approach, as we previously  recommended.
subsections: section_title: DOE’s Revised Cost Estimate for Constructing the MOX Facility Substantially Met Best Practices and Can Be Considered Reliable
paragraphs: DOE’s revised cost estimate for constructing the MOX facility  substantially met best practices. DOE developed the revised cost  estimate in 2016 using two different funding scenarios reflecting the  expected appropriation for the project. DOE estimated the MOX facility  construction would cost $17.2 billion assuming $350 million in funding per  year until project completion, which is consistent with recent  appropriations for the project, or $14.3 billion assuming $500 million per  year until project completion. These two estimates were developed to  illustrate the effect of varying funding levels on the project cost and  duration. DOE’s 2016 revised cost estimate for MOX construction  substantially met all four characteristics of a high-quality, reliable cost  estimate: comprehensive, well-documented, accurate, and credible.
Therefore, we believe it can be considered reliable. Table 2 summarizes  our assessment of DOE’s cost estimate by characteristic.
Our assessment noted the following for each of the four characteristics:
Comprehensive: DOE’s revised estimate was substantially  comprehensive because, among other things, it followed the best  practices of including all costs incurred and estimated future costs to  complete construction of the MOX facility, including the government’s  and contractor’s costs. According to DOE officials responsible for  revising this cost estimate, the estimate was based on the  methodology and costs in a 2013 Independent Cost Estimate for  constructing the MOX facility that was developed by the U.S. Army  Corps of Engineers (Corps). For the revised estimate, DOE updated  the costs of the work completed as of 2016 by adding to the costs for  the work completed in the 2013 Independent Cost Estimate, the cost  of materials that had actually been installed and inspected and that  did not require rework as of 2016, the cost of different management  accounts, escalation, and the costs to account for equipment and  technology that had been or would be acquired and installed but that  DOE officials expected to become obsolete and would need to be  replaced before the facility construction was completed.
Well-documented: DOE’s revised estimate was substantially well- documented, in part because DOE’s documentation captures the data  sources the department used for this estimate. For example, the  estimate included sources of data from the 2013 Independent Cost  Estimate and from the contractor’s performance data. In addition, the  revised estimate was based on the work breakdown structure used in  the 2013 Independent Cost Estimate, which described in detail the  methodology for each element of work. We also found that DOE’s  revised cost estimate was based on the same program and technical  description as the 2013 Independent Cost Estimate. According to  DOE officials, the revised estimate has a range of minus 10 percent to  plus 10 percent. In addition, in developing its revised estimate, DOE  followed the best practice of presenting the estimate to DOE  management for approval.
Accurate: DOE’s revised estimate was substantially accurate. Among  other things, we independently verified a selection of the cost output  and found no mathematical errors. We also found that DOE properly  adjusted this estimate for inflation, applying a 4 percent escalation  rate to account for inflation, which is the same factor that the Corps  used in developing the 2013 Independent Cost Estimate and is  consistent with NNSA’s escalation rate used for this type of project,  according to DOE. We assessed this characteristic as substantially  accurate but not fully accurate, in part because it did not fully meet the  best practice of basing the estimate on a historical record of costs  from previous efforts and actual experiences from other comparable  projects. This was because a portion of the estimate was not based  on historical experience of other projects. For example, DOE added  costs to the estimate to account for equipment and technology that  had been or would be acquired and installed but that DOE officials  expected to become obsolete and would need to be replaced before  the facility construction was completed. According to DOE officials,  this added cost was not based on a historical record because the  MOX project is the first project for which this cost was added.
Credible: DOE’s revised estimate was substantially credible, in part  because DOE followed the best practices of conducting sensitivity,  and risk and uncertainty analyses. For example, DOE conducted  statistical sensitivity analysis to understand the biggest cost drivers for  the funds held by the government and the contractor that might be  needed to cover risks. In addition, DOE’s revised estimate also  followed the best practice of conducting a schedule risk analysis as  specified in our schedule guide. DOE officials conducted schedule  risk analysis to include the costs of possible schedule slippage in the  estimate. Based on this analysis, DOE added a total of approximately  49 months, and this schedule addition increased the cost estimate by  $744 million plus escalation, according to DOE officials. We assessed  this characteristic as substantially credible and not fully credible, in  part because it did not fully meet the best practice of conducting an  independent cost estimate. While DOE’s 2016 revised estimate was  itself not an independent cost estimate, it was based on the 2013  Independent Cost Estimate. In addition, according to DOE officials,  DOE also compared its revised estimate to the estimates in the 2014  Plutonium Disposition Working Group Report and the 2015 Aerospace  and Red Team reports and concluded that its estimate was in line with  the results of these other reviews. Appendix II provides more detail  on our assessment of how well DOE’s 2016 cost estimate for  completing MOX facility construction met each best practice for  developing a high-quality estimate.
section_title: NNSA Has Not Yet Applied Best Practices When Revising Its Life-Cycle Cost Estimate for the Plutonium Disposition Program Using the MOX Approach
paragraphs: NNSA has not yet applied best practices when revising its life-cycle cost  estimate for the Plutonium Disposition Program using the MOX approach,  as we previously recommended. This is because, according to NNSA  officials, they developed the $56 billion cost estimate to satisfy an annual  requirement to record the plutonium environmental liability on  departmental financial statements that were due in September 2016.
Specifically, NNSA revised the life-cycle cost estimate for the Plutonium  Disposition Program using the MOX approach, increasing it from $24.2  billion in 2013 to $56 billion in 2016. In revising the life-cycle cost  estimate, NNSA included DOE’s revised MOX facility construction cost  estimate of $17.2 billion. NNSA then extended the completion date for the  program from the previous estimated completion date of 2036 to a new  estimated completion date of 2065 to account for the 29 years DOE now  estimates it will take to complete the construction of the MOX facility.  NNSA officials explained that a significant part of the increase in the 2016  life-cycle cost estimate from the 2013 estimate was from applying  escalation rates to account for inflation over the new, longer time period.  Table 3 shows the difference between the two estimates for each  program component, while appendix III provides more information on the  amounts spent to date and the estimated future costs.
NNSA officials told us that they did not develop a life-cycle cost estimate  following best practices for the MOX approach because they only had  sufficient funding to develop the life-cycle cost estimate for the dilute and  dispose approach that Congress requested in 2016. NNSA officials  explained that if the Plutonium Disposition Program was not authorized to  move forward with the dilute and dispose approach, NNSA would need  approximately $30 million and about 3 to 4 years to revise both the MOX  facility cost estimate and the program’s life-cycle cost estimate using the  MOX approach.
In our February 2014 report, we recommended that NNSA revise and  update the Plutonium Disposition Program’s life-cycle cost estimate using  the MOX approach following our cost estimating best practices, such as  conducting an independent cost estimate. NNSA generally agreed with  our recommendation, but has not yet implemented it. While, as mentioned  previously, there have been several other recent estimates for the life- cycle cost of the program using the MOX approach, these estimates  concluded a wide range of potential life-cycle costs and used different  methodologies. Based on the findings of our review of NNSA’s revised  life-cycle cost estimate, we continue to believe that our recommendation  remains valid and that, should DOE choose to pursue the MOX approach,  NNSA should revise this estimate consistent with our cost and schedule  estimating best practices. NNSA officials in charge of revising this  estimate stated that they will apply cost and schedule best practices to  revise this estimate, including conducting an independent cost estimate,  should there be a decision to continue with the MOX approach.
section_title: NNSA Is Developing a Life-cycle Cost Estimate for Completing the Plutonium Disposition Program Using the Dilute and Dispose Approach
paragraphs: NNSA is currently in the process of developing a life-cycle cost estimate  for completing the Plutonium Disposition Program using the dilute and  dispose approach. NNSA is currently assessing the extent to which any  new equipment and facilities would be needed to pursue this approach  and, according to NNSA officials, will complete a life-cycle cost estimate  that will follow GAO’s cost estimating best practices, including having the  estimate independently validated. NNSA officials also told us that while  they originally expected to have an independently validated life-cycle cost  estimate completed in mid-2018, they had to suspend almost all  estimating work because they were initially limited to $5 million in fiscal  year 2017 for this work. According to these officials, the soonest they  will have the program life-cycle cost estimate ready to be submitted for  independent validation will be in the second quarter of fiscal year 2018.  Based on this schedule, officials stated that the program life-cycle cost  estimate could be independently validated by the end of 2018.
According to the program requirements document that NNSA created to  outline its plans for conducting the dilute and dispose approach and  NNSA officials, NNSA’s life-cycle cost estimate for the program using this  approach will include several program elements: preparing the plutonium  for dilution, diluting the plutonium into waste, and disposing of it at  WIPP. NNSA identified in the program requirements document that it  will need to expand its existing capabilities for preparing plutonium and  diluting it, and according to NNSA officials, its life-cycle cost estimate will  define the extent of these expansions and the overall cost for each  element. To assist with the development of the cost estimates for each of  the program elements, NNSA included an initial set of milestones for  completing the program in the program requirements document.  According to an NNSA official, program estimators can use these  milestones to determine the rates at which each program element needs  to process the plutonium in order to complete the program by the  established date. These milestones are outlined in appendix IV.
subsections: section_title: NNSA Has Determined It Will Need to Expand Its Plutonium Preparation Capabilities for Dilute and Dispose
paragraphs: NNSA has determined that in order to complete the program using the  dilute and dispose approach, it will need to expand its plutonium  preparation capabilities. NNSA is currently assessing the extent of this  expansion and how much it will cost. Currently, NNSA operates the  Advanced Recovery and Integrated Extraction System (ARIES) project at  Los Alamos National Laboratory, which has equipment for disassembling  nuclear weapons pits and converting the plutonium in these pits into  plutonium oxide. DOE developed this capability as a technology  development project. According to NNSA officials, the ARIES project has  operated sporadically since 1998 and has thus far produced  approximately 667 kilograms of plutonium oxide, which NNSA had  planned to use as feedstock for the MOX Facility. NNSA determined that,  should the Plutonium Disposition Program continue forward with the MOX  approach, NNSA would need to expand the capabilities of ARIES to  produce sufficient plutonium oxide for operating the MOX facility.  According to NNSA officials, the existing capabilities of ARIES are also  insufficient for meeting the plutonium oxide production rates that NNSA  has established for the dilute and dispose approach over the estimated  lifetime of the program. According to NNSA officials, additional  equipment is needed, such as gloveboxes and tools for both  disassembling nuclear weapons pits and converting the plutonium into  plutonium oxide, so that ARIES can achieve the production rates outlined  in the program requirements for the dilute and dispose approach. To  estimate the life-cycle costs associated with expanding and operating the  ARIES project, NNSA currently is assessing the quantities of equipment it  would need to install and the floor space it would need to achieve  specified production rates. NNSA officials in the Plutonium Disposition  Program told us they consulted with the NNSA officials responsible for  managing the relevant space at Los Alamos, who told them that current  plans for the space would allow for an expansion of the ARIES project.  NNSA officials also told us they suspended their assessment of the costs  to expand ARIES for dilute and dispose in January 2017 as they had  reached the initial fiscal year 2017 funding limit for analyzing the dilute  and dispose approach. These officials stated that the completion of the  analysis would be delayed by at least 6 months past the original June  2017 completion date and acknowledged that this estimate must be  completed prior to developing the life-cycle cost estimate for the dilute  and dispose approach.
According to NNSA officials, NNSA has not initiated the capital asset  acquisition process to expand its plutonium preparation capabilities  because the extent of this expansion will differ depending on whether  NNSA pursues the MOX approach or the dilute and dispose approach.  NNSA officials explained that if NNSA started the acquisition process  using the requirements of the dilute and dispose approach and then this  approach was rejected, NNSA would have to restart the process using  the MOX requirements. These officials stated that if NNSA receives  congressional authorization to pursue the dilute and dispose approach, it  will initiate DOE’s capital asset acquisition process for the expansion of  ARIES to obtain the needed equipment. If this authorization is received,  NNSA would use the ARIES expansion analysis it is currently conducting  to develop the documentation needed for reaching the CD-0 milestone.  The information provided by this analysis would support an assessment  of the gap in capabilities in the existing ARIES project and a rough order- of-magnitude cost estimate to procure the equipment needed to close this  gap. However, if NNSA does not receive authorization to pursue the  dilute and dispose approach, NNSA will need to update its assessment of  ARIES expansion requirements under the MOX approach, according to  NNSA officials. In 2013, NNSA assessed the costs of expanding ARIES  to support the MOX approach and estimated that it would need  approximately $438 million for new equipment and that this expansion  would take approximately 12 years to complete. This estimate was  based on a plutonium oxide production rate that, according to NNSA  officials, was significantly higher than the rate being used in the estimate  for the dilute and dispose approach. NNSA officials told us that the ARIES  requirements for the program using the MOX approach could be  significantly different if operations begin in 2048, as DOE’s revised MOX  cost estimate concluded.
section_title: NNSA Has Determined It Needs Additional Equipment and Facilities to Dilute Plutonium and Is Estimating the Cost to Acquire It
paragraphs: NNSA has determined it will need additional equipment and facilities to  dilute the 34 MT of plutonium subject to the Plutonium Management and  Disposition Agreement and is estimating the cost to acquire these using  DOE’s capital asset acquisition process. In September 2016, NNSA  approved a revised mission need statement that identified the need for  additional equipment and facilities to dilute plutonium and securely store it  prior to disposal. This document also included a rough order-of- magnitude cost estimate for the capital asset construction project needed  to install the dilution and storage capabilities with a range of $200 million  to $500 million. NNSA is in the process of further refining this cost  estimate as part of its work towards the CD-1 milestone, which NNSA  estimates will occur in the third quarter of fiscal year 2018. According to  NNSA officials, NNSA is moving forward with CD-1 for the dilution portion  of the program because, unlike for the ARIES expansion portion of the  program, the need for the dilution capability only applies to the dilute and  dispose approach. NNSA officials told us that they could stop the  acquisition process for the dilution capabilities if the dilute and dispose  approach does not move forward.
In order to reach CD-1 approval, NNSA is required, among other things,  to conduct an analysis of alternatives to select a preferred alternative.  The contractor NNSA hired to conduct this analysis identified dilution  operations at the Savannah River Site—requiring $330 million in  construction, including the installation of three gloveboxes and waste  storage—as the highest scoring alternative. NNSA approved the analysis  of alternatives in May 2017. To identify the preferred alternative, the  analysis began with nine potential alternatives that were put through an  initial screening to determine whether each of the alternatives was  sufficiently different from one another and whether each alternative could  meet all the necessary requirements established in the dilute and dispose  program requirements document and other documents. This screening  identified four alternatives that were judged as viable for providing the  necessary dilution and waste storage capabilities to meet the program’s  requirements; NNSA then fully analyzed each of these four alternatives.  These alternatives and their estimated costs are outlined in table 4 below.
Among the four alternatives, the contractor’s analysis ranked alternative  2, in the table above, as the highest scoring; this alternative proposes to  dilute the 34 MT of both pit and non-pit plutonium at the Savannah River  Site. This alternative was the highest scoring alternative for several  reasons, including that (1) it was judged to have the lowest risk of any of  the four based on the analysis of potential threats and opportunities for  each alternative, (2) diluting the pit and non-pit plutonium at the  Savannah River Site would make the most extensive use of existing  facilities and capabilities and would have a lower impact on other ongoing  site operations during construction and operations than would occur if  dilution capabilities were installed at Los Alamos National Laboratory, and  (3) it would provide easier access to a third party, such as the  International Atomic Energy Agency to monitor and inspect the plutonium  disposition process as required by the Plutonium Management and  Disposition Agreement.
According to NNSA officials, they will use the results of the analysis of  alternatives process to develop the conceptual design and estimated cost  of the preferred alternative. NNSA officials told us that they were planning  for NNSA management to approve CD-1 in September 2017. However,  according to NNSA officials, they had suspended additional work towards  CD-1 because of the initial restriction in fiscal year 2017 on their use of  additional funds for dilute and dispose planning. As a result, completion  and approval of CD-1 is expected to be delayed by at least six months or  more.
section_title: NNSA Is Assessing Potential Costs Associated with Disposing of Diluted Plutonium at WIPP
paragraphs: NNSA has been assessing what upgrades would be necessary and the  costs for disposing of the 34 MT of diluted plutonium at WIPP. NNSA  officials stated that any upgrades that are needed will likely be completed  as part of normal operations and maintenance work at WIPP and will not  require the initiation of a capital asset project. These officials also said  they have identified some upgrades that will be needed at WIPP to accept  the diluted plutonium. For example, security upgrades in the aboveground  storage area of WIPP will be required so that the diluted plutonium can be  monitored and protected in the case of an unplanned outage of the WIPP  facility that prevents the diluted plutonium from being placed  underground. Additionally, NNSA will need to pay for a system that allows  a third party, such as the International Atomic Energy Agency, to monitor  the diluted plutonium as it goes through the dilution process and is  disposed of at WIPP. According to NNSA officials, the Plutonium  Disposition Program will pay for the costs of the identified upgrades at  WIPP associated with the disposal of diluted plutonium at WIPP.  However, according to NNSA officials, their analysis for the costs of  disposing of the diluted plutonium assumes that DOE will provide  sufficient disposal space for this waste. These officials also said that if  DOE needs to expand the disposal space at WIPP in order to accept all  of the plutonium from the dilute and dispose approach, the costs for such  an expansion would not be part of the life-cycle cost estimate currently  under development for the program using the dilute and dispose  approach. NNSA officials told us they do not have a current estimate of  the costs for the upgrades at WIPP and have suspended the work  assessing the costs for disposing of the plutonium at WIPP due to budget  constraints.
section_title: WIPP Does Not Have Sufficient Space to Meet Current TRU Waste Disposal Needs, and Future Volumes May Exceed Statutory Capacity Even Without Diluted Plutonium
paragraphs: DOE does not have sufficient disposal space at WIPP to dispose of all  defense TRU waste already planned for disposal, and future sources of  waste could exceed WIPP’s statutory capacity. To accommodate the  waste identified in DOE’s 2016 annual TRU waste inventory report as  going to WIPP, DOE will need to further excavate the repository. To  address WIPP’s statutory capacity issue, DOE is considering changing its  method of counting the volumes of waste disposed of at WIPP, which  could allow it to dispose of the waste included in the inventory and much  of the possible future volumes without exceeding the statutory capacity.  However, DOE has not developed plans to obtain the requisite regulatory  approvals to excavate more disposal space or plans for changing its  method of counting waste volumes, which risks delaying the dilute and  dispose approach if selected.
subsections: section_title: WIPP Will Need to Be Expanded to Dispose of Defense TRU Waste Already Planned for WIPP
paragraphs: DOE does not have sufficient disposal space available in WIPP for the  TRU waste planned for disposal identified in its 2016 annual TRU waste  inventory report, and DOE will need to expand the repository to  accommodate this waste. DOE’s inventory report includes the amount of  TRU waste that DOE estimates will require disposal at WIPP or another  geologic repository through 2050, the planned closure date for WIPP.  The 2016 inventory report includes 68,350 m of contact-handled waste  and 3,160 m  These inventory totals do not include the 34 MT of diluted plutonium from  the dilute and dispose approach. The inventory also has a separate  section for “potential waste,” which is waste that may be disposed of at  WIPP but that, because of issues such as regulatory or physical  restrictions, DOE has not yet determined meets all of WIPP’s waste  acceptance criteria. portion of the panel where the radiological release took place will no  longer be used for waste disposal. Additionally, according to DOE  officials, they were unable to conduct sufficient maintenance of the entire  WIPP underground while working to recover from the 2014 accidents, and  as a result, additional portions of the facility’s space are no longer suitable  for waste disposal. In particular, these officials told us that they are not  likely to dispose of waste in panel 9 due to the instability in the ceiling in  that area. Figure 2 provides an illustration of the remaining disposal  space available at WIPP and the extent to which prior panels were filled  to their permitted capacity. For more information on the difficulties DOE  faced in filling panels 1 through 6 to their permitted capacity, see  appendix V.
WIPP’s capability to accommodate the TRU waste planned for disposal is  complicated by special requirements for disposing of the relatively small  portion of remote-handled waste. Specifically, DOE may not be able to  dispose of the 3,160 m of remote-handled waste planned for disposal at  WIPP in any of the remaining planned space at WIPP because of the  additional requirements for remote-handled waste. Currently, remote- handled waste is disposed of in WIPP either in boreholes drilled into the  walls or in specially designed shielded containers. DOE officials told us  that it is possible that none of the remaining space at WIPP may be  available for disposing of remote-handled waste using boreholes in the  panels due to two factors. First, contamination from the February 2014  radioactive release accident is now contained in some of the facility’s  walls, making them potentially unsuitable for borehole disposal. Second,  officials told us panels 9 and 10 were not designed for borehole disposal.  However, these officials also explained that DOE is still evaluating the  suitability of WIPP’s planned space for borehole disposal, and it has not  yet made a final decision. DOE officials have approved the use of a  shielded container that allows remote-handled waste to be disposed of  alongside contact-handled waste in panels instead of in boreholes, but  this container has not been widely used at WIPP. The department also  issued an analysis of alternatives that suggests DOE expand its use of  shielded containers for remote-handled waste.
Current DOE plans for WIPP do not include an analysis of whether the  facility will need to be expanded to accommodate the TRU waste planned  for disposal identified in its inventory, even though the department’s  current plan is to fill the remaining disposal space by 2026 and the facility  is not expected to close until 2050. While DOE officials stated that they  recognize expansion of WIPP’s disposal space may be necessary in the  future, they have not analyzed or planned for expanding the facility  because their focus has been on resuming waste emplacement  operations at WIPP. According to our analysis of DOE’s 2016 annual  TRU waste inventory report and the constraints on the remaining planned  disposal space at WIPP, WIPP will not be able to accommodate all the  waste planned for disposal without expansion. Using DOE’s plans for  filling WIPP’s remaining disposal space, we estimate that DOE has space  for approximately 25,350 m The extent  to which any space remains for disposal of remote-handled waste is  unknown because DOE officials told us the suitability of this space is still  under evaluation. As shown in table 5, the waste planned for disposal at  WIPP that is identified in DOE’s 2016 inventory report exceeds the  facility’s disposal space. of potential waste  estimated from the West Valley Demonstration Project because it is included in DOE’s  estimate of 12,000 m. According to these officials, the difference between the estimates  is caused by several factors, including that estimates in the Environmental Impact  Statement were developed as conservative, lower-bound estimates, and uncertainty  regarding quantities of GTCC LLW and GTCC-like waste that may be generated at the  West Valley Demonstration Project in the future that were not reported to the inventory.  Department of Energy, Final Environmental Impact Statement for the Disposal of Greater- Than-Class-C (GTCC) Low-Level Radioactive Waste and GTCC-Like Waste, DOE/EIS- 0375 (January 2016). waste needs to be included as part of DOE’s planning for WIPP’s  future space and capacity needs.
Other Estimated Waste That May Go to WIPP: Two other sources  of waste could significantly impact the available capacity at WIPP. For  the first source—GTCC LLW and GTCC-like waste—DOE issued a  final environmental impact statement in 2016 that identified 12,000 m As of May 2017, DOE has not submitted the report to  Congress. For the second source, DOE estimates that the diluted  plutonium from the dilute and dispose approach would generate  23,800 m of waste. In its current planning documents, NNSA  assumes that WIPP will be the geologic repository for this waste if the  decision is made to move forward with this approach for the Plutonium  Disposition Program. As seen in table 6, if DOE were to dispose of all  potential waste and GTCC LLW and GTCC-like waste at WIPP, it  could exceed the statutory capacity established in the Land  Withdrawal Act even without the 34 MT of diluted plutonium.
In addition to these estimated sources of waste that may be disposed of  at WIPP in the future, there are other possible sources of TRU waste that  DOE may need to dispose of at WIPP that have been identified but not  yet estimated and are not reflected in the inventory. Specifically, DOE  officials acknowledged that the possible TRU waste that could result from  decontamination and decommissioning of facilities and exhumation of  buried waste may represent a significant quantity of waste. Officials we  interviewed at the five major DOE waste-generating sites told us of at  least 44 facilities that could generate TRU waste during decontamination  and decommissioning or that have buried TRU waste for which no volume  estimates have been reported to DOE. Site officials told us that, in  general, they do not estimate the volume of TRU waste that may result  from these cleanup operations until they have agreements with state  regulators on proposed methods for cleanup and plans to execute these  agreements. Moreover, according to these officials, the amount of TRU  waste that could be generated can vary greatly based on which cleanup  methods are chosen. For a few of these facilities, site officials were able  to make general estimates of the possible quantities of TRU waste. For  example, officials at one site told us about a facility that did not yet have a  cleanup plan and that could generate anywhere from 300 m to 2,600 m to  3,000 mpotentially significant volumes of waste resulting from decontamination  and decommissioning of facilities and exhumation of buried waste that  have not yet been estimated increase the potential for WIPP to exceed its  statutory disposal capacity in the future. Figure 3 shows how the addition  of this possible future waste that has not yet been estimated, along with  waste for which there is an estimate, could result in DOE exceeding  WIPP’s statutory disposal capacity.
As noted above, while DOE cannot plan for the disposal of GTCC waste  and waste from the dilute and dispose approach until key decisions are  made, its current planning mechanisms do not account for all waste it  may need to dispose of in WIPP in the future. Federal standards for  internal control state that management should use quality information to  achieve the entity’s objectives. Among other characteristics, quality  information is to be complete. While DOE has developed guidance to  instruct TRU waste generator sites on what information to include for the  annual update to the TRU waste inventory report, this guidance does not  explain how or whether sites should develop estimates of the volumes of  TRU waste that may be generated in the future. Without developing  guidance that helps sites produce more comprehensive estimates of the  volumes of TRU waste that may be generated in the future from cleanup  operations—including estimates of buried waste, waste that may be  generated from decontamination and decommissioning of nuclear  facilities, waste that may be generated past WIPP’s expected closure  date of 2050, and other possible future sources of TRU waste not  currently reflected in the annual TRU waste inventory report—DOE will  not have the information needed to effectively estimate the need for future  space for TRU waste disposal and ensure that its plans are in compliance  with WIPP’s statutory capacity.
section_title: DOE Is Reviewing Alternative Waste Counting Methods That Would Allow It to Dispose of More Waste, including Diluted Plutonium, at WIPP without Exceeding the Statutory Capacity
paragraphs: DOE officials told us that they recognize that additional volumes of waste  could result in WIPP exceeding its statutory capacity, and they are  reviewing alternative methods for counting the volumes of TRU waste  disposed of at WIPP that could increase the volume of waste DOE could  dispose of there before reaching the facility’s statutory capacity.  Specifically, as identified in our analysis above, DOE will need to take  steps in order to be able to confirm that waste volumes that could result in  WIPP exceeding its statutory capacity, such as the 34 MT of diluted  plutonium, can be disposed of at WIPP. DOE currently counts the volume  of waste disposed of at WIPP using the volume of the outermost  container rather than the inner containers holding the waste or the volume  of the waste itself. Most of the TRU waste disposed of at WIPP is  packaged initially in 55-gallon drums, but some of these drums are  subsequently packed inside larger containers, called overpacks, that hold  multiple drums. DOE relies on several types of overpacks for the disposal  of TRU waste. For the dilute and dispose approach, NNSA plans to  package the waste inside small cylinders, which are then placed within  55-gallon drums. According to DOE officials, if the method for counting  waste volumes changes for all TRU waste so that DOE counts the inner  containers or the waste itself, this change would likely provide sufficient  additional disposal capacity at WIPP for the waste planned for disposal  identified in the 2016 inventory, potential waste, and the 34 MT of diluted  plutonium.
In September 2016, DOE completed an analysis of alternative methods  for counting the volume of TRU waste already at WIPP and the waste  expected in the future. The report evaluated 13 prospective alternative  calculation methods and recommended 2 preferred alternatives to  present for final selection to DOE officials responsible for managing WIPP  operations.
One of the preferred alternatives proposed to recalculate the volume  of waste already disposed of in the repository using only the volume  of the innermost waste container, and proposed that the volume of  waste disposed of at WIPP in the future be determined by the volume  of TRU waste in each container.
The other preferred alternative proposed to recalculate the volume of  waste already disposed of in the repository and future volumes of  TRU waste using the volume of the innermost container, regardless of  the amount of TRU waste in the container.
While either of the above methods would provide additional disposal  capacity at WIPP, according to DOE officials, the department is still  considering its options. DOE officials responsible for managing WIPP  operations have previously estimated that revising the method for  counting the amount of waste already disposed of could free up more  than 30,000 m Additionally, while the  volume of the 34 MT of diluted plutonium would be 23,800 m using  DOE’s current counting method, this volume would decrease to 1,417 mexceed the EPA regulatory thresholds for the potential of a radiological  release over a 10,000-year period. According to Sandia National  Laboratories officials, the new model they are developing is required for  expanding WIPP’s disposal space in the areas DOE is currently  considering, and they estimate that this model will be completed and  validated by 2024.
If NNSA proceeds with the dilute and dispose approach and the 34 MT of  diluted plutonium is sent to WIPP, DOE will need to include in its  expansion planning the results of an assessment of the environmental  impact of disposing of this waste in order to ensure that WIPP will be able  to accept all of the plutonium. Officials from Sandia told us that they are  currently conducting an analysis that will contribute to this environmental  impact assessment and expect to complete it by fiscal year 2019.  According to DOE officials, this analysis includes estimating the impact on  WIPP’s long-term performance to determine whether disposal of the  diluted plutonium at WIPP would cause cumulative radioactive releases  exceeding EPA’s release limits. If the analysis by Sandia National  Laboratories determines that the diluted plutonium would have a  significant enough impact, steps to change the design of future disposal  space at WIPP in order to reduce the potential impact could be  necessary. For example, Sandia officials stated that new panels that are  smaller than the current design could be used to reduce the concentration  of the diluted plutonium in the repository and thereby reduce the potential  for a radiological release.
DOE will also need regulatory approvals from EPA and the New Mexico  Environment Department to expand the disposal space at WIPP. To get  approval from EPA, DOE will need to submit a formal change request to  the agency. DOE officials told us that expanding WIPP’s disposal space  would constitute a significant change to the original design of the facility,  and according to EPA officials, change requests of this magnitude require  significant review. In some cases, the EPA officials said granting this type  of change could require EPA to go through the federal rulemaking  process, which could include public comment and publication of a  proposed federal rule. EPA officials told us that, historically, these change  requests may take as long as 2 years. According to officials from the New  Mexico Environment Department, to excavate additional waste disposal  panels, DOE must also seek a permit modification from their agency. EPA  officials told us that approval for these kinds of changes generally take  between 1 and 2 years and that they are unsure whether the New Mexico  Environment Department would be able to process a permit modification  request concurrently with EPA’s review. Once all necessary approvals  have been completed, DOE could then begin excavating new disposal  space at WIPP. There is no set time frame for how long the excavation  would take, and DOE officials stated that this time frame would vary  based on the design of the new disposal space. However, DOE officials  noted that it took about two years to excavate each of the existing panels  at the facility.
DOE officials told us they have begun work on the new model and there  is sufficient time to complete all necessary actions before WIPP  operations are significantly impacted; however, DOE has no plans yet for  seeking the approvals that would show that these approvals and  subsequent construction can be completed before the facility’s existing  disposal space is full. DOE’s most current formal planning document for  WIPP, the TRU waste management plan, covers 5 years. DOE officials  told us that the plan is limited to 5 years because it is an operational plan  that is used to plan near-term waste shipments, not a long-term strategic  plan. The most current version of this plan addresses the period up to  2019 and does not address possible future WIPP expansion needs.  Completion of the new model for WIPP that is needed to begin the  regulatory approval process for expansion is not expected to be ready  until 2024, and then the approval and subsequent construction process  could take another 4 years or longer. Given that these time frames extend  well beyond the period addressed in the TRU waste management plan,  DOE’s current planning is insufficient for addressing possible WIPP  expansion. As discussed above, under federal standards for internal  control, management should use quality information to achieve agency  objectives; among other characteristics, quality information is to be  complete. However, DOE’s TRU waste management plan does not  contain information necessary to plan for the future of WIPP through its  closure. Without developing a long-term plan for WIPP that includes the  need for expanding WIPP’s disposal space and an integrated schedule  that describes how DOE will complete the regulatory approval process  and construction of new space before WIPP’s existing space is full, DOE  will not have reasonable assurance that it will be able to expand the  repository in a timely manner. Instead, according to DOE officials, they  may have to slow or suspend waste shipments to WIPP in the future,  which could delay the implementation of the dilute and dispose approach,  should it move forward. The slowing or suspension of waste shipments  from waste generator sites could also delay the completion of cleanup  projects at those sites and could impact their ability to meet cleanup  deadlines negotiated with state regulators.
subsections: section_title: Revision of Method for Counting Waste Volumes
paragraphs: To revise the method DOE uses to count waste volumes disposed of at  WIPP against the statutory disposal capacity, DOE officials explained that  they will need regulatory approval from the New Mexico Environment  Department to change the facility’s hazardous waste operating permit,  and such approval could take 2 years. DOE has not yet completed its  internal deliberations about the specifics of this proposed change and, as  such, has not yet sought a determination from the New Mexico  Environment Department about what type of review would be required to  approve this change or clarified how long this approval process may take.  As noted above, DOE officials told us that they have been focused on  efforts related to reopening WIPP, and enough time exists to obtain  regulatory approval to meet the dilute and dispose milestones. However,  one of the assumptions in NNSA’s program requirements for the dilute  and dispose approach is that WIPP will be able to dispose of the diluted  plutonium and that if there are capacity constraints that would impact the  facility’s ability to do so, they would be addressed by 2020. In order to  meet this requirement, DOE would need to implement this change by  2020 or risk delays in planning for the dilute and dispose approach.  According to New Mexico Environment Department officials, the request  to change the method of counting waste volumes could be completed  either through a policy determination by the New Mexico Environment  Department or through the formal WIPP hazardous waste facility  operating permit modification process. New Mexico Environment  Department officials noted that the formal permit modification process  could take as long as 2 years as opposed to a policy determination, which  would likely be completed more quickly. According to DOE officials,  unless they receive approval from the New Mexico Environment  Department to change the method for counting waste volumes, Congress  will need to raise WIPP’s statutory disposal limit by amending the WIPP  Land Withdrawal Act or the repository will be unable to accept significant  quantities of additional waste not currently planned for disposal.
With the uncertain time frames involved with receiving approval from  regulators to change the volume counting method, it is unclear whether  DOE officials responsible for managing WIPP operations will be able to  meet NNSA’s 2020 milestone for resolving potential disposal space  constraints at WIPP for disposing of the waste from the dilute and dispose  approach. Under federal standards for internal control, management  should use quality information to achieve the entity’s objectives, and  among other characteristics, quality information is provided on a timely  basis. Without DOE developing a timeline to help determine whether it  can change its method of counting waste volumes to meet NNSA’s 2020  milestone, DOE and other stakeholders may not have the information  they need in a timely manner to know whether possible future waste,  such as waste from the dilute and dispose approach, can be added to the  waste planned for disposal at WIPP without potentially exceeding the  facility’s statutory disposal capacity.
section_title: Conclusions
paragraphs: DOE is currently in the process of reevaluating the best approach for  disposing of 34 MT of surplus weapons-grade plutonium. DOE’s 2016  revised cost estimate of $17.2 billion for construction of the MOX facility  substantially followed best practices, and we believe it can be considered  reliable. However, NNSA’s revised life-cycle cost estimate for the  Plutonium Disposition Program using the MOX approach of $56 billion  does not yet incorporate cost estimating best practices as we have  previously recommended. Reviews by NNSA and some outside experts  found that the dilute and dispose approach has the potential to cost  significantly less, but NNSA is still developing a life-cycle cost estimate for  this alternative. If the decision is made to move forward with the dilute  and dispose approach, DOE will need to ensure that there is sufficient  disposal space and statutory capacity at WIPP to dispose of the diluted  plutonium. WIPP is a geologic repository for defense TRU waste and will  need to accommodate all such waste unless DOE pursues an additional  repository.
DOE has not adequately planned for all possible waste that it may be  expected to dispose of in WIPP, complicating its ability to determine  whether the waste from the dilute and dispose approach can be disposed  of at WIPP. In particular, DOE does not have a schedule for when TRU  waste generator sites will complete the determinations on whether the  potential waste identified in DOE’s annual TRU waste inventory report  can be disposed of at WIPP. Without developing this schedule, DOE  cannot be assured that it has timely information on whether to include this  waste as part of its planning for WIPP’s future space and capacity needs.  In addition, DOE’s TRU waste inventory report does not capture several  possible future sources of waste, including waste from the  decontamination and decommissioning of facilities or waste that may be  generated after 2050. DOE’s guidance for estimating future waste does  not specify how possible future waste should be estimated and reported.  Without developing guidance that helps sites produce a more  comprehensive estimate for the volumes of TRU waste that may be  generated in the future from cleanup operations, including estimates of  buried waste, waste that may be generated from facility closure and  cleanup, and other potential sources of TRU waste not currently reflected  in the TRU waste inventory report, DOE will not have the information it  needs to effectively estimate the need for future space for TRU waste  disposal and ensure that its plans are in compliance with WIPP’s statutory  capacity.
To address WIPP’s future space and capacity needs, DOE will need  approvals from EPA and the New Mexico Environment Department.  However, DOE is uncertain about the extent of approvals required and  has not initiated planning efforts to obtain these approvals. DOE does not  have plans to show how additional space will be excavated in time to  prevent a disruption in waste shipments after the facility’s existing  disposal space is filled in 2026. Without a long-term plan that includes the  need for expanding WIPP’s disposal space and an integrated schedule  that describes how DOE will complete the regulatory approval process  and construction of new space before WIPP’s existing space is full, DOE  does not have reasonable assurance that it will be able to expand the  repository before waste shipments must be slowed or suspended. DOE  also does not have a timeline for determining whether it will change its  method of counting waste volumes and therefore does not know whether  this action will be completed by 2020, when NNSA’s program  requirements for the dilute and dispose approach assume that potential  capacity constraints at WIPP will have been addressed. Without DOE  developing a timeline to help determine whether it can change its method  of counting waste volumes to meet NNSA’s 2020 milestone for resolving  potential disposal space constraints at WIPP, DOE and other  stakeholders may not have the information they need in a timely manner  to know whether possible future waste, such as waste from the dilute and  dispose approach, can be added to the waste planned for disposal at  WIPP without potentially exceeding the facility’s statutory disposal  capacity.
section_title: Recommendations for Executive Action
paragraphs: To ensure that DOE has a full understanding of the department’s long- term TRU waste disposal requirements and the capability of WIPP to  meet those requirements, we recommend that the Secretary of Energy  take the following four actions:
Develop a schedule for deciding whether the volumes of “potential  waste” identified in the annual TRU waste inventory report can be  disposed of at WIPP.
Develop guidance that helps sites produce a more comprehensive  estimate for the volumes of TRU waste that may be generated in the  future from cleanup operations, including estimates of buried waste,  waste that may be generated from decontamination and  decommissioning of nuclear facilities, and waste that may be  generated past WIPP’s expected closure date of 2050.
Develop a long-term plan for disposing of DOE’s TRU waste that  the need for excavating additional disposal space at WIPP and an  integrated schedule that describes how DOE will complete the  regulatory approval process and construction of new space before  WIPP’s existing space is full, and a timeline to help determine whether DOE can change its method  of counting waste volumes to meet NNSA’s 2020 milestone for  resolving potential disposal space constraints at WIPP.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this report to DOE for review and comment. In  written comments, reproduced in appendix VI, DOE concurred with the  report’s recommendations. DOE stated that our recommendations were  consistent with the department’s commitment to improve management of  the national TRU waste program and to efficiently and effectively utilize  WIPP for disposal of eligible TRU waste. DOE outlined actions that it  intends to take in response to our recommendations, including developing  disposal schedules for potential waste once certain prerequisite actions  are taken that provide the basis for determining whether or not the waste  is TRU waste that can be disposed of at WIPP; developing new guidance  by December 2018 to assist DOE sites produce more comprehensive  estimates of future TRU waste that may be generated from cleanup  operations; and developing a long-term plan by December 2018 for  disposal of DOE’s TRU waste, including an initial design for potential new  waste disposal panels at WIPP and options for changing the method of  counting waste volumes disposed of at WIPP. We believe that these  steps, once implemented, would address our recommendations.
In addition, DOE highlighted the following two points:
DOE’s Office of Environmental Management is focused on the WIPP  mission as currently defined by law.
DOE has not made a final decision to use the dilute and dispose  approach to dispose of the 34 metric tons of surplus plutonium that  the department previously decided to fabricate into mixed-oxide fuel.
DOE 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, and other interested parties. In  addition, the report will be available at no charge on the GAO website at  http://www.gao.gov.
If you or your staff members have any questions about 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 VII.
section_title: Appendix I: Objectives, Scope, and Methodology
paragraphs: Our report examined (1) the extent to which the Department of Energy’s  (DOE) revised cost estimate for completing construction of the Mixed- oxide Fuel Fabrication Facility (MOX facility) and the revised life-cycle  estimate for completing the Plutonium Disposition Program using the  mixed-oxide (MOX) fuel approach met cost-estimating best practices, (2)  the status of the National Nuclear Security Administration’s (NNSA)  development of a life-cycle cost estimate for completing the Plutonium  Disposition Program using the dilute and dispose approach, and (3) the  extent to which DOE has sufficient disposal space and statutory capacity  at its Waste Isolation Pilot Plant (WIPP) to dispose of all defense  transuranic (TRU) waste, including the diluted plutonium resulting from  the dilute and dispose approach.
To assess the extent to which DOE’s revised cost estimates for  completing construction of the MOX facility and for completing the overall  Plutonium Disposition Program relying on the MOX approach meet cost  estimating best practices, we used the following methodology:
DOE’s 2016 performance baseline cost estimate to complete the  MOX facility. We compared the process DOE used to develop the  2016 performance baseline cost estimate with the 12 key steps  described in the GAO Cost Estimating and Assessment Guide that,  when followed correctly, should result in a high-quality, reliable cost  estimate. We evaluated DOE’s 2016 performance baseline report  and reviewed backup documentation supporting the information in this  report, including the U.S. Army Corps of Engineers’ 2013 Independent  Cost Estimate of the MOX facility construction, and the contractor’s  2015 and 2016 estimate at completion reports. We also interviewed  DOE cost estimating experts and officials who prepared DOE’s  performance baseline cost estimate. We provided a draft of our  assessment to DOE and revised the draft, as appropriate, after  discussing our assessment with DOE officials and receiving additional  information from them, such as data on how DOE included the effects  of schedule slippage in the cost estimate.
NNSA’s life-cycle cost estimate for the Plutonium Disposition  Program using the MOX approach: Because NNSA officials stated  that they did not prepare the updated 2016 life-cycle cost estimate for  the program using the MOX approach based on GAO’s 12 steps of a  high-quality, reliable cost estimate, we interviewed NNSA officials  responsible for developing the estimate as well as officials in charge  of various parts of the program to determine whether they took any  steps that might have changed the estimate’s reliability since we  assessed it in a 2014 report.  We determined at that time that the  estimate did not meet the characteristics of a high-quality, reliable  estimate. We also tried to understand what led to cost increases in  some areas of the estimate. In addition, we reviewed back-up  documentation for the 2016 life-cycle cost estimate and compared it  with the documentation we evaluated in our 2014 report.
To determine the status of NNSA’s development of a life-cycle cost  estimate for completing the Plutonium Disposition Program using the  dilute and dispose approach, we reviewed the planning documents that  had been completed to date, including the mission need and program  requirements documents that outlined the scope of the Plutonium  Disposition Program relying on the dilute and dispose approach and  dates for completing key program milestones. We also interviewed NNSA  officials managing the Plutonium Disposition Program to determine the  extent of planning that they had completed to date for this approach and  the schedule for completing the remaining plans. To understand what  efforts were ongoing to study the impact of disposing of diluted plutonium  at WIPP on long term repository performance, we interviewed officials  from the Carlsbad Field Office and Sandia National Laboratories and  reviewed documents on preliminary analysis work they had begun. We  also visited DOE’s Savannah River Site to interview NNSA officials  responsible for the Plutonium Disposition Program and officials from  DOE’s Office of Environmental Management (EM) project to dilute the 6  MT of non-pit plutonium. At the site, we also viewed a demonstration  mock-up of the plutonium dilution equipment that EM already had in  operation.
To determine the extent to which DOE has sufficient physical space and  statutory capacity at WIPP to dispose of all defense TRU waste, including  the diluted plutonium resulting from the dilute and dispose approach, we  reviewed relevant legislation relating to WIPP’s statutory capacity, DOE’s  annual TRU waste inventory report, and data from the Waste Data  System, which tracks the waste already disposed of in the repository. We  also reviewed DOE’s WIPP hazardous waste facility permit and the 1992  WIPP Land Withdrawal Act to understand the legal requirements  governing waste disposal at WIPP. To assess the reliability of DOE’s  inventory, we reviewed documents on its development and interviewed  officials responsible for maintaining it. Based on our review, we  determined that the data it contains are sufficiently reliable for our  purposes. However, in discussions with DOE officials, they told us there  is uncertainty in the estimated volume of waste expected to come to  WIPP in the future. For example, DOE officials stated that the actual  volume of waste that is disposed of at WIPP may be higher than their  current estimates, in some cases due to circumstances that DOE cannot  currently predict, such as the need to repackage certain stored wastes  into multiple containers and thereby increase the total volume of waste.  Additionally, a DOE official told us that the actual volume of waste  disposed of at WIPP could be lower than what they currently estimate in  certain cases because they are working on minimizing the volumes of  TRU waste produced in the future by, for example, developing more  efficient waste packaging processes. As part of developing its inventory of  TRU waste, DOE updates on an annual basis the estimates on the  volume of waste expected to be disposed of at WIPP in the future, using  a process we found to be reliable; therefore, we used the information from  this inventory for our analysis. We also conducted a site visit to WIPP to  interview DOE officials responsible for managing WIPP operations to  understand how the waste disposal space is managed and how they plan  for DOE’s future disposal needs. In interviews with DOE officials  knowledgeable about DOE’s cleanup efforts, we identified other sources  of waste that may be disposed of at WIPP in the future but that are not  currently included in DOE’s inventory report. In particular, we spoke with  a DOE official responsible for managing the department’s strategy for  disposing of greater-than-Class C waste. To understand what efforts were  ongoing to study the impact of disposing of diluted plutonium at WIPP, we  interviewed officials from Sandia National Laboratories who are  responsible for analyzing potential changes at WIPP. To evaluate  potential sources of TRU waste from generator sites that may not be  included in DOE’s inventory report, understand how such sites estimate  the amount of TRU waste they will need to ship to WIPP, and get these  sites’ perspectives on potential disposal space availability and capacity  issues, we reviewed documents from and interviewed officials at DOE’s  five major waste-generating sites. Specifically, we conducted interviews  with officials from the Hanford Site in Washington state, Idaho National  Laboratory, Los Alamos National Laboratory in New Mexico, Oak Ridge  National Laboratory in Tennessee, and Savannah River Site in South  Carolina. These interviews included a site visit to Idaho National  Laboratory. In addition, to understand the regulatory process through  which DOE must work to operate WIPP, we spoke to officials from  agencies that have regulatory authority over the WIPP facility—the U.S.  Environmental Protection Agency and the State of New Mexico  Environment Department.
section_title: Appendix II: GAO Assessment of Department of Energy’s (DOE) Revised Cost Estimate for Construction of the Mixed-Oxide (MOX) Fuel Fabrication Facility
subsections: section_title: Best practice characteristic and overall assessment Comprehensive: Substantially met
paragraphs: Best practice  The cost estimate includes all life-cycle costs.
Detailed Assessment  Substantially met. The estimate included all  actual and estimated future costs to construct the  MOX facility, including government’s and  contractor’s costs. The estimate was an update  of the 2013 Independent Cost Estimate, with  updates to account for the contractor’s actual  cost and a new estimate of future work.
The cost estimate completely defines the  program, reflects the current schedule, and is  technically reasonable.
Substantially met. The estimate was based on  the MOX facility construction project’s technical  baseline and on the methodology and costs in  the 2013 Independent Cost Estimate conducted  by the U.S. Army Corps of Engineers.  DOE used updated installation rates for this  estimate that were different than the rates used  in the contractor’s technical baseline. For  example, the contractor counted that 11 percent  of the pipes had been installed, while DOE’s  2016 estimate used an updated contractor  validation report that stated that only 1 percent of  the pipe had actually been installed, inspected,  and accepted.
The cost estimate work breakdown structure is  product-oriented, traceable to the statement of  work/objective, and at an appropriate level of  detail to ensure that cost elements are neither  omitted nor double-counted.
Partially met. The entire MOX work breakdown  structure was taken from the 2013 Independent  Cost Estimate. It shows five levels of detail. This  structure is the contractor’s work breakdown  structure, which was decertified by DOE in  October 2016. The decertification report stated  that one deficiency of the contractor’s work  breakdown structure was that the contractor did  not implement a single product-oriented work  breakdown structure to provide direct  representation of the project work scope and  document the hierarchy and description of tasks  to be performed and their relationship to the  product deliverables.
The estimate documents all cost-influencing  ground rules and assumptions.
Fully met. The estimate was based on well- described ground rules and assumptions that  were identified in DOE’s revised cost estimate  report, as well as the 2013 Independent Cost  Estimate. The assumptions were developed by  cost estimators who consulted the technical  community.
section_title: Best practice characteristic and overall assessment Well-documented: Substantially met
paragraphs: Best practice  The documentation captures the source data  used, the reliability of the data, and how the data  were normalized.
Detailed Assessment  Substantially met. DOE’s documentation  captures all data sources used for this update,  which are all primary sources. For example, in  most cases, the source data for the estimate are  the contractor’s performance data, the 2013  Independent Cost Estimate, and the contractor’s  estimate at completion. DOE normalized the  estimate at completion data used in the 2013  Independent Cost Estimate by adding escalation,  obsolescence, level of effort adjustments, and  construction adjustments to bring it up to date to  2016.
The documentation describes in sufficient detail  the calculations performed and the estimating  methodology used to derive each element’s cost.
Fully met. Each level 4 work breakdown structure  has a description of the methodology used to  estimate it. While the 2013 Independent Cost  Estimate was a better Class 2 estimate, DOE’s  2016 estimate was a Class 3 estimate with a  range of minus 10 percent to plus 10.
The documentation describes, step by step, how  the estimate was developed so that a cost  analyst unfamiliar with the program could  understand what was done and replicate it.
Substantially met. The documentation was  mathematically sensible and logical. Some but  not all of the supporting data was available in the  back up documentation provided by DOE. The  data was adequate for easily updating the  estimate to reflect actual costs or program  changes since it came from the contractor’s  actuals. However, some costs were added to the  historical data that were not based on actuals,  such as a factor for obsolescence that was not  based on any historical data.
The documentation discusses the technical  baseline description and the data in the baseline  is consistent with the estimate.
Fully met. The estimate was based on the same  program and technical description as the 2013  Independent Cost Estimate. Each work  breakdown structure element had a brief  technical description associated with it. The  technical descriptions in the estimate could be  found in the technical baseline document.
The documentation provides evidence that the  cost estimate was reviewed and accepted by  management.
Substantially met. DOE provided documentation  that would indicate that management understood  all the details of the cost estimate, including the  risks associated with the underlying data and  methods, before management approved it.
section_title: Best practice characteristic and overall assessment Accurate: Substantially met
paragraphs: Best practice  The cost estimate results are unbiased, not  overly conservative or optimistic, and based on  an assessment of most likely costs.
Detailed Assessment  Partially met. The estimate included an additional  approximately $207 million in extra funding,  which might be needed to address known risks.  DOE calculated the confidence level at 95  percent. According to our Cost Estimating Guide,  while no specific confidence level is considered a  best practice, experts agree that project cost  estimates should be budgeted with at least 50  percent confidence level, but budgeting at a  higher level (of 70 to 80 percent) is now common  practice.
The estimate has been adjusted properly for  inflation.
Fully met. DOE properly adjusted the estimate  for inflation by using a 4 percent escalation rate.  This was the same escalation rate used in the  2013 Independent Cost Estimate and, according  to DOE’s report, was consistent with the  escalation rate used by NNSA for this type of  projects.
The estimate contains few, if any, minor  mistakes.
Fully met. We independently verified a selection  of the cost output and found no mathematical  errors. The estimating team was also charged  with maintaining a quality control plan, which  included doing quality checks and reviews  throughout the process as well as a technical  review of the estimate.
The cost estimate is regularly updated to reflect  significant changes in the program so that it  always reflects current status.
Partially met. The estimate was an update of the  2013 Independent Cost Estimate. In addition, the  contractor’s estimate at completion was updated  in 2016. However, this was not a full update, and  elements of the 2013 Independent Cost Estimate  were updated only by re-escalating and making  some adjustments.
Variances between planned and actual costs are  documented, explained, and reviewed.
Partially met. The contractor examined actual  costs and variances. DOE used these variances  to determine the updated estimate. However,  DOE decertified the contractor’s earned value  management system in October 2016, because  DOE determined that the data in this system  were not reliable, timely, auditable, traceable, or  reconcilable.
The estimate is based on a historical record of  cost estimating and actual experiences from  other comparable programs.
Partially met. The estimate was mostly based on  historical data that was applicable to the MOX  construction project. Some costs were added to  the historical data that were not based on actual  costs incurred, such as obsolescence. The data  was current and within 1 year old. The data  mostly came from the contractor’s earned value  management system, which DOE decertified in  October 2016.
section_title: Best practice characteristic and overall assessment
paragraphs: Best practice  The estimating technique for each cost element  was used appropriately.
Detailed Assessment  Fully met. The estimate was developed using  parametric cost estimating techniques, applying  statistical relationships between historical costs  and other program variables such as facility or  process, physical or performance characteristics,  contractor output measures, and manpower  loading. Each technique appears to be used  appropriately for the work breakdown structure  element being estimated.
The cost estimate includes a sensitivity analysis  that identifies a range of possible costs based on  varying major assumptions, parameters, and  data inputs.
Fully met. DOE conducted statistical sensitivity  analysis to understand the biggest cost drivers  within management reserve and contingency.
A risk and uncertainty analysis was conducted  that quantified the imperfectly understood risks  and identified the effects of changing key cost  driver assumptions and factors.
Substantially met. DOE conducted a quantitative  risk and uncertainty analysis using Monte Carlo  simulation to determine the confidence levels  and associated range of contingencies. DOE did  not independently identify the risks; the  contractor provided the list of risks.  Programmatic risks were considered to be  bounding assumptions and were not included.
Major cost elements were cross-checked to see  whether results were similar.
Partially met. We did not find evidence of cross  checking while reviewing the documentation for  both the 2016 estimate and 2013 Independent  Cost Estimate. DOE stated that the estimating  team performed cross checks by evaluating the  2013 Independent Cost Estimate against the  contractor’s actuals and analyzing the costs on a  monthly basis. This allowed DOE to determine  that the actuals were close to the 2013 estimate  and the contractor’s estimate to complete  needed adjustments.
An independent cost estimate was conducted by  a group outside the acquiring organization to  determine whether other estimating methods  produce similar results.
Partially met. DOE’s 2016 cost estimate was not  an independent cost estimate, but it was built on  the 2013 Independent Cost Estimate. As part of  the estimate development, DOE consulted  several other independent studies previously  conducted on the construction project, such as  the Red Team and the Aerospace Corporation  reports. DOE concluded that its estimate was in  line with these other reviews.
section_title: Appendix III: National Nuclear Security Administration’s (NNSA) Life-cycle Cost Estimates for the Plutonium Disposition Program Using the Mixed-Oxide (MOX) Approach
subsections: section_title: Facility or Program Component MOX Fuel Fabrication Facility
paragraphs: MOX Irradiation, Feedstock, and Transportation is the program component that includes: (1)  production of plutonium feedstock for the MOX Fuel Fabrication Facility, (2) qualification of MOX fuel  for use in commercial nuclear reactors, and (3) procurement and maintenance of shipping containers  for plutonium feedstock and MOX fuel.  The Program Management and Integration is the program component, that includes overall  management and integration of the MOX Fuel Fabrication Facility and the Waste Solidification  Building projects, and integration of the projects with activities falling under the MOX Irradiation,  Feedstock, and Transportation component. The Program Management and Integration component  used to be called the Plutonium Disposition and Infrastructure Program.
section_title: Appendix IV: Milestones for the Plutonium Disposition Program Using the Dilute and Dispose Approach
paragraphs: To assist with the developing of the life-cycle estimate for the Plutonium  Disposition Program using the dilute and dispose approach, the National  Nuclear Security Administration (NNSA) established a set of milestones  for completing the program. These milestones, according to an NNSA  official, will be used to determine the rates at which each element of the  program need to operate and the extent that the element would need to  be expanded to meet that rate. For example, NNSA will need to install  equipment for diluting the plutonium at a rate so that all 34 metric tons of  plutonium will be diluted by the end of the program in fiscal year 2047.  These milestones are outlined in Figure 4 below.
section_title: Appendix V: History of the Closed Panels at the Waste Isolation Pilot Plant
paragraphs: The closed panels vary in terms of the extent to which they were filled to  their maximum permitted volume of waste. One of the six panels  accommodated nearly 100 percent of its maximum permitted contact- handled waste, while others ranged from 58 percent to 91 percent full.  According to Department of Energy (DOE) officials, DOE was unable to  fill the panels with the permitted volume of waste as planned primarily  because it approved additional waste packaging called “overpacks,” in  which waste containers are encased to increase safety for workers  handling or transporting the waste and to comply with limits on how much  radioactive material can be transported. Encasing waste in overpacks  resulted in a less efficient use of the disposal space because some of  these packages could not be efficiently arranged next to one another, and  others could not be safely stacked on top of one another because of their  weight or size. Overpacks also include some empty space between  containers within the overpack, further reducing available space.
In addition, DOE has faced challenges accommodating the disposal of  remote-handled TRU waste. Because of the higher hazard, there are  greater restrictions on how remote-handled waste can be disposed of. To  date, remote-handled waste has been permitted for disposal primarily in  boreholes drilled into the walls in panels 4 through 8. According to DOE  officials, some of the boreholes in the walls of panels 4 through 6 were  blocked by overpacks of contact-handled waste containers already  disposed of in those panels before sufficient remote-handled waste  arrived at the site for disposal. Because of the inability to use the  boreholes as planned in panels 4 through 6, none of the borehole  disposal space in these panels was filled to more than 35 percent of its  permitted volume. See figure 5 for an illustration of how the typical  placement of waste in panels has resulted in DOE’s inability to use panel  space as planned.
section_title: Appendix VI: Comments from the Department of Energy
section_title: Appendix VII: GAO Contact and Staff Acknowledgments
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 contact named above, Daniel Feehan, Assistant  Director; Mark Braza; Richard P. Burkard; Lindsey Cross; Jennifer  Echard; Quindi Franco; Cristian Ion; Eli Lewine; Ned Malone; Emily  Norman; Cynthia Norris; Katrina Pekar-Carpenter; and Kiki  Theodoropoulos made key contributions to this report.