Retired DOE official says UPF ‘out of control,’ could end up costing $10 billion

June 13, 2013 by Frank Munger

David Wilfert at his home on Thursday. Wilfert is the former deputy federal project director for Spallation Neutron Source and concerned about the planned Uranium Processing Facility, which Wilfert says will likely reach $10 billion to build. Wilfert has raised questions with Sens. Lamar Alexander and Bob Corker and Congressman John Duncan Jr.
A retired federal official who helped guide the $1.4 billion Spallation Neutron Source to a successful completion in 2006 — ahead of schedule and within budget — said he’s afraid another big Oak Ridge project may be headed for disaster.

David Wilfert, who retired from the U.S. Department of Energy in 2006 after SNS construction was finished, said the management of the Uranium Processing Facility at Y-12 appears to be “out of control.” The project could end up costing $10 billion or more, he said.

Wilfert said he was shocked last fall when the National Nuclear Security Administration, a semi-independent part of DOE, admitted that after spending half a billion dollars the original design was not big enough to accommodate all the equipment and would have to be redone.

“To me, that was absolutely unconscionable,” he said. “I cannot see how that was even possible. I cannot imagine how any set of engineers beyond kindergarten could have gotten that far without discovering that mistake.”

Wilfert, an engineer who served as deputy federal project director for SNS, said the normal strategy for designing such a building would be to start with a design that is too big, then bring it down and pare costs.

“This is absolutely the reverse of how things should have occurred,” Wilfert said.

The official cost estimate of the Uranium Processing Facility is a range between $4.2 billion and $6.5 billion, and the Government Accountability Office — in a recent briefing package prepared for members of Congress — said the current best estimate is $6 billion and suggested there’s a good chance that the project could end up exceeding the top end of the range.

Wilfert said his experience in project management indicates the UPF could end significantly higher than the current range. Typically, 7-15 percent of a project’s cost is devoted to the design. He said because of the type of facility it is, the UPF design should probably be closer to the 7 percent figure than the 15.

Given that, if the UPF design had been completed at the time the redesign was announced, the cost range would be somewhere between $3.3 billion and $7.1 billion, Wilfert said. And likely more toward the upper figure, he said.
However, taking into account that another year’s worth of design was still needed, the ultimate cost would more likely approach $10 billion or beyond, he said.

“That’s my gut feeling,” he said. “Actually it’s more than a gut feeling. It’s based on engineering experience.”
Wllfert said he doesn’t have an ax to grind. He’s not against the UPF being built. He said he’s speaking out as a citizen and as a taxpayer and to try to get congressional attention on this costly project before it’s too late.

After the design problems were acknowledged last fall, Wilfert wrote to U.S. Sens. Lamar Alexander and Bob Corker, R-Tenn., as well as U.S. Rep. John Duncan, R-Tenn., and expressed his concerns.

Of the three, only Alexander sent a detailed reply, saying he shared Wilfert’s concern about the growing costs of UPF and saying he was committed to completing the project safely, cost-effectively and as soon as possible.

Wilfert said he got a call from a Corker staffer “to tell me they appreciated my concern about the Y-12 break-in,” apparently confusing his message with that of other constituents. Duncan’s office did not respond at all, he said.
“This situation appears far more serious than complete incompetence, it really appears criminal,” Wilfert wrote via the electronic message systems to the three elected officials from Tennessee. “In my opinion, to have spent half a billion dollars on design and THEN discover the building is too small is not possible without gross theft of Government funds; designers beyond kindergarten wouldn’t make a mistake that large.”

Wilfert noted that earlier in his career, before his work on the Spallation Neutron Source and other projects, he had experience with the weapons manufacture work at Y-12. “So I am quite familiar with the processes that must be designed into the UPF,” he wrote. “It is NOT a highly technical facility with the possible exception of wet chemistry for scrap recovery.”

He concluded that the management of UPF was out of control and said the project should be halted until “proper management” was put in place. He also said the loss of government funds should be investigated.

More recently, Wilfert noted that Alexander spoke out about the growing cost of UPF but was unwilling to place a ceiling on how much money could be spent on the project. He also noted that Tennessee’s senior senator said the UPF should be modeled after the SNS, one of the few big Department of Energy projects to come in on time and within its budget.

“I don’t know what’s going on with UPF,” Wilfert said, “but I don’t have a warm, fuzzy feeling that it’s headed in the right direction . . . I’m just trying to get our congressional and senatorial representatives to recognize that this is a potential disaster and that $10 billion is easily going to occur."