Y-12 replacement redesigned after project cost overruns

Y-12 replacement redesigned after project cost overruns

June 6th, 2014 by Dave Flessner in Business Around the Region

Retired Lt. Gen. Frank Klotz, the DOE undersecretary for nuclear security and NNSA administrator, addresses on Thursday the Tennessee Valley Corridor 2014 National Summit hosted at UTC's University Center.

Photo by Shawn Paik /Times Free Press.

A decade after military planners began its design, the largest construction project in Tennessee is starting over with a new and different layout.

The Department of Energy's Uranium Processing Facility in Oak Ridge has been revamped to help reduce its escalating costs by more than a third.

But the head of the federal agency building the proposed $6.5 billion complex said Thursday the project is still needed to upgrade the aging Y-12 weapons plant and the project should still spur business across the Tennessee Valley as it is built in the next decade.

Retired Lt. Gen. Frank Klotz, a Department of Energy undersecretary who heads the National Nuclear Security Administration, said one part of the Oak Ridge facility, Building 9212, is more than 60 years old.

"There are a lot of concerns about the safety and functionality of structures that old," Klotz said after visiting Y-12 this week.

In 2005, DOE proposed what was projected to be a $600 million single complex to bring Y-12 up to date. But since then, costs for that idea ballooned to an estimated $10 billion or more, forcing a revamp of the design in the past six months.

Under the leadership of Oak Ridge National Laboratory Director Thom Mason, a "Red Team" of experts cut the costs of the new Y-12 complex to $6.5 billion by moving to modular units in a more distributed design, not all of which will require the highest environmental and security features of the most sensitive operations.

Klotz, who received the Red Team recommendation in April, called the new design "a prudent and reasonable approach" that DOE is also using at a plutonium plant at Los Alamos National Lab in New Mexico.

"We hope to be able to use much of the work that we have done so far, but to be perfectly honest not all of our work in going to carry over," said Steven Erhart, manager of the 7,000-employee Y-12 National Security Complex in Oak Ridge.

U.S. Rep. Chuck Fleischmann, R-Tenn.., met with Klotz during the Tennessee Valley Corridor summit and said Thursday he "is satisfied that the project is moving forward" with the new design.

"I have been a strong advocate for the UPF since I've been in Congress because the nation needs enriched uranium," he said. "The Red Team, I think, did a very good job and is going to get this back on track."

Fleischmann said the massive project should create business opportunities for many Chattanooga builders and businesses. Last year, he led a conference that attracted more than 200 companies in Chattanooga interested in finding out about how to possibly do work for the Oak Ridge project.

Before such contracts are awarded, however, the new plan must be fully designed.

To help limit cost overruns that have beset many DOE projects, the department now requires more than 90 percent of all of the plant to be designed and planned before construction begins, Erhart said.

At a Mixed Oxide Fuel fabrication plant being built at DOE's Savannah River Site in South Carolina, design work and calculations were not done before the project began. DOE has now proposed that that facility be halted in September because of cost overruns that have swelled the program costs for the MOX program to $30 billion. Even though the South Carolina plant is nearly half built, it may be scrapped to pursue other, less expensive programs. Klotz said.

Such construction cost overruns, Klotz said, are because of the new and unique challenge of building new nuclear facilities. But he also said the government needs to do better.

U.S. Sen. Lamar Alexander, R-Tenn., told DOE officials in April they should pursue a similar Red Team revision strategy at the MOX plant that was used at the UPF project in Oak Ridge.

Contact Dave Flessner at dflessner@timesfreepress.com or 757-6340.