NATIONAL NEWS

US nuclear agency isn’t consistent in tracking costs for some construction projects, report says

Jan 25, 2024, 4:10 PM

PHOENIX (AP) — The U.S. agency in charge of maintaining the nation’s nuclear arsenal is not consistent when it comes to tracking the progress of small construction projects, making it difficult to prevent delays and cost overruns, congressional investigators said in a report released Thursday.

The Government Accountability Office warned in the report that even fewer projects will go under the microscope if officials raise the dollar limit for what qualifies as a small project. Congress has raised that threshold numerous times, reaching $30 million during the last fiscal year after having started at $5 million in 2003.

Without collecting and tracking information on minor projects in a consistent manner, National Nuclear Security Administration officials may not have the information they need to manage and assess project performance, the investigators said.

“This is important because NNSA plans to initiate 437 minor construction projects over the next five fiscal years totaling about $5 billion, and cost overruns could be significant in aggregate,” the investigators stated in the report.

They went on to say NNSA offices use varying processes for managing smaller projects, some of which generally follow more rigid principles outlined by the U.S. Energy Department for large projects. However, these processes and other related requirements haven’t been documented in a formal or comprehensive way, the investigators added.

The agency disagreed that any cost overruns for minor construction projects would be significant and said small projects — like office buildings or fire stations — generally have a track record of being completed at or under budget.

“Following a project management approach tailored to the lower risk nature of these types of projects saves time and money by avoiding unnecessary rigorous oversight,” agency spokesperson Roger Bain said in an email.

The agency said it plans to use authority provided by Congress to increase the current threshold to keep up with inflation. Officials said doing so will maintain NNSA’s buying power for maintaining national security infrastructure.

The NNSA agreed with recommendations outlined in the report, saying it will determine what approach would be best for collecting and tracking information on costs and scheduling and how best to document its processes and requirements for minor construction projects.

The agency aims to finish that work by the end of June.

Still, nuclear watchdogs are concerned about the NNSA having a blank check with little accountability. Those concerns have ramped up as billions of dollars more are being funneled toward efforts to modernize the nation’s nuclear warheads. Some of that work is being done at Los Alamos National Laboratory in northern New Mexico and at Savannah River in South Carolina.

Greg Mello with the Los Alamos Study Group said large projects often are split into two or more smaller ones as a way to avoid federal and congressional oversight and accountability. He said better reporting after the fact won’t necessarily help NNSA do a better job of managing projects going forward.

“There are too many contractors and subcontractors in the value chain, too many profit opportunities and too few penalties for poor performance to expect high-quality results,” he said.

Mello pointed to the contracts to run Los Alamos and other sites that are part of the complex, saying they are worth tens of billions of dollars and are among the largest contracts in the federal government.

The NNSA said it provides semi-annual status updates to Congress on all minor construction projects valued at $10 million or more, including any changes to project costs or schedules. Agency officials also said the Energy Department’s more prescriptive management requirements are meant for more complex, nuclear and one-of-a-kind construction projects with a total cost of $50 million or more.

Between 2019 and 2023, the congressional investigators documented 414 minor construction projects worth more than $3 billion at NNSA sites across several states. Most of that spending was done at Lawrence Livermore National Laboratory in California and at Sandia and Los Alamos labs in New Mexico.

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US nuclear agency isn’t consistent in tracking costs for some construction projects, report says