A number of events are important in the history of DOE’s U.S. Plutonium Disposition program. In 1994, the United States declared 38.2 metric tons of weapons-grade plutonium as surplus to national security needs. In 1997, DOE announced a plan to dispose of surplus, weapons-grade plutonium through the following dual approach: (1) conversion into MOX fuel and (2) immobilization in glass or ceramic material. According to DOE, its approach would require the construction of three facilities—a pit disassembly and conversion facility, a MOX fuel fabrication facility, and an immobilization facility. In 2000, the United States and Russia entered into a Plutonium Management and Disposition Agreement, in which each country pledged to dispose of at least 34 metric tons of surplus, weapons-grade plutonium, including the disposition of no less than 2 metric tons of plutonium per year. In 2000, DOE announced in a record of decision that it would construct a pit disassembly and conversion facility, a MOX fuel fabrication facility, and an immobilization facility at SRS. In 2002, NNSA canceled the immobilization portion of its surplus plutonium disposition strategy due to budgetary constraints. In addition, according to NNSA officials, NNSA canceled the immobilization portion because (1) Russia would not dispose of its plutonium if the United States adopted an immobilization-only approach and (2) the technology for MOX fuel fabrication had been in use in Europe for three decades, whereas immobilization of weapons-grade plutonium in glass or ceramic had never before been demonstrated. In 2003, NNSA announced that it was pursuing a MOX-only plutonium disposition program to dispose of 34 metric tons of surplus, weapons- grade plutonium. The majority of the 34 metric tons of surplus, weapons-grade plutonium is in the form of pits, clean metal, and oxides. The remainder is in nonpit forms, such as contaminated metal, oxides, and residues from the nuclear weapons production process. While NNSA plans to build a pit disassembly and conversion facility to obtain plutonium from pits, it also plans to use the ARIES project—a technology development and demonstration project for pit disassembly and conversion located at LANL—to obtain a small amount of plutonium from pits. In addition, according to NNSA documents, NNSA plans to obtain plutonium from nonpit forms in two ways. First, the K-Area Facility at SRS is storing 4.1 metric tons of plutonium in nonpit form that is already suitable for use by the MFFF. Second, NNSA plans to prepare and process additional quantities of plutonium (3.7 metric tons) already at the K-Area Facility or planned for storage at the facility. Prior work by GAO has identified persistent problems with cost overruns and schedule delays on the PDCF project. For example, in our March 2007 report on major DOE construction projects, we found that ineffective DOE project oversight, poor contractor management, and external factors were among the primary reasons for the cost increases and schedule delays associated with the PDCF project. In addition, according to a May 2005 DOE Inspector General report, NNSA officials attributed schedule delays for the PDCF to the disagreement between the United States and Russia about liability for work performed by U.S. contractor personnel working in Russia and a change in funding priorities. NNSA project directors are responsible for managing the MFFF, WSB, and PDCF projects and overseeing the contractors that design and construct these facilities. In doing so, project directors follow specific DOE directives, policies, and guidance for project management. Among these is DOE Order 413.3A, which establishes protocols for planning and executing a project. The protocols require DOE projects to go through a series of five critical decisions as they enter each new phase of work. These decisions are as follows: Critical decision 0, which approves a mission-related need. Critical decision 1, which approves the selection of a preferred solution to meet a mission need and a preliminary estimate of project costs—an approval that is based on a review of a project’s conceptual design. Critical decision 2, which approves that a project’s cost and schedule estimates are accurate and complete—an approval that is based on a review of the project’s completed preliminary design. Critical decision 3, which reaches agreement that a project’s final design is sufficiently complete and that resources can be committed toward procurement and construction. Critical decision 4, which approves that a project has met its performance criteria for completion or that the facility is ready to start operations. To oversee projects and approve these critical decisions, DOE conducts its own reviews, often with the help of independent technical experts. For example, for large projects (with a total project cost of greater than $100 million), DOE’s Office of Engineering and Construction Management (OECM) validates the accuracy and completeness of the project’s performance baseline as part of the critical decision 2 process. DOE Order 413.3A also requires projects to use EVM to measure and report the progress of construction projects (with a total project cost of greater than or equal to $20 million). EVM measures the value of work accomplished in a given period and compares it with the planned value of work scheduled for that period and with the actual cost of work accomplished. Differences in these values are measured in both cost and schedule variances. EVM provides information that is necessary for understanding the health of a program and provides an objective view of program status. As a result, EVM can alert program managers to potential problems sooner than expenditures alone can, thereby reducing the chance and magnitude of cost overruns and schedule delays. The following DOE offices and entities provide independent nuclear safety oversight: HSS is responsible for policy development, independent oversight, enforcement, and assistance in the areas of health, safety, the environment, and security across DOE. Among its functions are periodic appraisals of the environmental, safety, and health programs at DOE sites, including evaluation of a sample of high-hazard nuclear facility at these sites to determine whether the program offices and their contractors are complying with DOE policies. The NNSA Central Technical Authority is responsible for maintaining operational awareness of nuclear safety on NNSA projects, especially with respect to complex, high-hazard nuclear operations, and ensuring that DOE’s nuclear safety policies and requirements are implemented adequately and properly. The CDNS is responsible for evaluating nuclear safety issues and providing expert advice to the Central Technical Authority and other senior NNSA officials. In particular, the CDNS is responsible for (1) validating that efforts to integrate safety into a project’s design include the use of a system engineering approach, (2) determining that nuclear facilities have incorporated the concept of defense-in-depth into the facility design process, and (3) validating that federal personnel assigned to an integrated project team as nuclear safety experts are appropriately qualified. Finally, DOE considers assessments and recommendations from external organizations, most prominently the Defense Nuclear Facilities Safety Board—an independent, external organization that reviews nuclear safety issues at DOE defense facilities and makes nonbinding recommendations to DOE. The MFFF and WSB construction projects both appear to be meeting their cost targets, but the MFFF project has experienced some delays over the past 2 years. In accordance with DOE project management requirements, both projects are using EVM to measure and report progress against their established cost and schedule estimates (also known as performance baselines) for construction. EVM provides a proven means for measuring such progress and thereby identifying potential cost overruns and schedule delays early, when their impact can be minimized. Differences from the performance baseline are measured in both cost and schedule variances. Positive variances indicate that activities are costing less or are completed ahead of schedule. Negative variances indicate that activities are costing more or are falling behind schedule. These cost and schedule variances can then be used in estimating the cost and time needed to complete the project. Figure 1 presents information on both cumulative cost and schedule variances for the MFFF project over the 2-year period ending November 2009. With respect to cost, the MFFF project has experienced fluctuating variances during this period. Overall, these cost variances are relatively small compared with the project’s average monthly expenditures of over $20 million. In addition, it is normal for variances to fluctuate during the course of a project. However, with respect to the project’s schedule, the MFFF project has experienced consistently negative variances for most of the past 2 years. Specifically, as shown in figure 1, these schedule variances were consistently negative for most of 2008, and, for much of 2009, the project had not completed almost $40 million in scheduled work. According to the data and project officials, delays during 2008 were due primarily to the delivery of reinforcing bars that did not meet nuclear quality standards. Specifically, in February 2008, NRC inspectors identified numerous pieces of reinforcing bars—steel rods that are used in reinforced concrete—that did not meet industry standards for nuclear facilities. At that point, NNSA’s contractor, Shaw AREVA MOX Services, LLC (MOX Services), had accepted delivery of about 10,000 tons of reinforcing bars on-site and had installed almost 4,000 tons. Although NRC and MOX Services officials determined that the error did not affect the safety of reinforcing bars already installed, this issue had a major effect on the overall schedule for pouring concrete and installing reinforcing bars in the structure during 2008. According to project officials, the project switched to a different supplier of reinforcing bars in September 2008 and by April 2009 had a sufficient supply of material to support the construction schedule. Schedule delays in 2009 occurred primarily because project officials decided that they had not allocated sufficient time in the existing schedule to ensure the delivery of materials that would meet the stringent safety and design standards for nuclear facilities.