For Immediate Release October 25, 2012 (Initial release, 8:30 pm)

Major Los Alamos National Laboratory (LANL) security project halted by Feds

Feds demand full disclosure of project's problems, finances, call operating contractor LANS performance "unacceptable;" LANS to be held financially accountable; stop work orders given to five subcontractors; extra security needed at plutonium site; feds demand immediate "demonstration" that plutonium is being adequately guarded; "emergency" funds requested from Congress to rescue project.

Contact: Greg Mello (505-265-1200 or 505-577-8563) or Peter Neils (505-259-5437)

ALBUQUERQUE, NM -- Today the authoritative Nuclear Weapons and Materials Monitor (NWMM) is reporting that a large cost overrun and delay of indeterminate duration have been announced for the largest security upgrade project in the U.S. nuclear weapons complex, at LANL's Technical Area 55 (TA-55) plutonium facility. 

Background and today's revelations, courtesy the NWMM

The $213 million (M) "Nuclear Materials Safety and Security Upgrades Project II" (NMSSUP II) was begun in late FY2002 but languished in conceptual design until engineering design finally began in FY2007.  Construction began in FY2008 and was supposed to be finished in the second quarter of FY2013 (i.e. the first three months of calendar year 2013). 

Prior to the problems reported today, the NMSSUP II upgrade to the circa 3,900 ft perimeter security barrier at TA-55 was expected to cost approximately $4,500 per inch. 

Now, apparently neither the National Nuclear Security Administration (NNSA) nor its LANL management and operating (M&O) contractor Los Alamos National Security (LANS) know when the project will be finished or how much it will cost.

In a story written by reporter Todd Jacobson for today, NWMM reports that:

• NNSA has requested an emergency reprogramming of $21 to $25 M from Congress to rescue the project, much of which would go to additional security to make up for the fact that the physical security is not complete;
• NNSA has written a sharply-worded demand letter to LANS asking for full disclosure of the project's problems, accounting, plans to hold subcontractors accountable, possible sources of funding for the project, and a "demonstration" that the nuclear materials stored at TA-55 are still safe.
  
• Part of the problem is that fiber optic cables were installed incorrectly.  Some recognized construction problems date back to 2010.  

Last month the Los Alamos Study Group independently observed (via Google Map's "satellite view") -- and reported in person to at least one congressional committee as well as the Government Accountability Office (GAO) -- that the essential security perimeter at TA-55 did not appear to be complete as of the date of the most recent Google satellite photograph (May, 2012). 

The Study Group made several phone calls to officials at the Los Alamos Site Office in an attempt to understand the situation seen in the Google satellite image, without success. 

The coordination of the NMSSUP II project with the proposed, but now indefinitely deferred, Chemistry and Metallurgy Research Replacement Nuclear Facility (CMRR-NF) has long been challenging.  To construct CMRR-NF, a large portion of the TA-55 security perimeter would have to be moved twice -- first to accommodate a conveyor belt for concrete and a heavy access road to the bottom of what was expected to be a deep or very deep excavation (depending on the design option chosen), and then moved back to approximately the original position. 

Another large portion of the perimeter would have to be relocated, after being rebuilt in the NMSSUP II project, upon completion of the CMRR-NF project, so the new building could be embraced within the perimeter barrier. 

The NMSSUP II project is a subject in the Los Alamos Study Group's current litigation in New Mexico federal court.  The Study Group claims NMSSUP II is a "connected action" (to CMRR-NF) as defined by regulations implementing the National Environmental Policy Act (NEPA). 

NMSSUP as been something of a sore spot in LANS' annual performance evaluation reports, though details have been absent.  For example, in its evaluation of LANS' FY2010 performance, NNSA deducted $1 M from LANS' fee for its poor management of the interrelated CMRR-NF and NMSSUP projects.  As NNSA wrote then, "NNSA had to engage for a second time in the interface between the NMSSUP2 and CMRR projects to derive a best value solution. Failure to evaluate incremental design and requirement changes in near real time manner has resulted in cascading impacts and cost estimate surprises and reduced HQ and DOE confidence." 

Hundreds of thousands of dollars in fee were also deducted in NNSA's evaluation of LANS' FY2011 performance for deficiencies in NMSSUP management. 

Comments

Study Group Director Greg Mello:

"On the one hand, what appears to be a strong management response from NNSA is to be praised.  Yes, LANS and its subcontractors should be held financially responsible for the extra costs.  In virtually every other case to date, LANS and its predecessor the University of California were compensated richly for their errors, which then become the basis of future appropriations requests.  It is this pattern of enabling contractor errors which has led to NNSA's poor project management record.  Will the old pattern be broken this time?  We certainly hope so.

"However it is not clear why a reprogramming request should be necessary under the Continuing Resolution (CR) now in place, which is basically one giant pot of money for NNSA Weapons Activities.  NNSA requested no funds for the project for FY2013, but told Congress, in its budget request of February, 2012:

The last request for line‐item funding for 08‐D‐701, Nuclear Materials Safeguards and Security Upgrades Project, NMSSUP II, at Los Alamos National Laboratory, occurred in FY 2012. Construction is projected to be completed in the second quarter of FY 2013. 

Since the project had not concluded, completing it would not be a "new start" and is, as far as we know, permissible under this CR.  LANS receives hundreds of millions of dollars in broadly-applicable facility funding annually, which could be used either on this project (under the broad CR) or else used to hire additional guards or whatever other compensatory measures are necessary. 

"The problems with NMSSUP are just more reasons why rushing ahead with the CMRR-NF would be a bad idea right now.  If LANS cannot build a security system on time and on budget, how can LANS be expected to competently build an additional plutonium facility that would cost 20 or 30 times as much and be just that much more complicated? 

"Today's revelations are very sobering for the future of LANL and indeed for the whole nuclear weapons complex.  Every single large project is over budget and delayed.  We believe some of these projects will fail, or else be downscoped or canceled, which are more often than not the right things to do.  NNSA has got to get rid of its optimism bias and start managing realistically. 

"LANS has had tremendous cost problems on all of its big construction projects, including the first CMRR building, the Radiological Laboratory, Utility, and Office Building (RLUOB), problems which it does not admit in that case.  Look at the Radioactive Liquid Waste Treatment Facility (RLWTF), where a stop work order also had to be issued, that time before construction started.  The TRU Waste facility had major problems and may still have.  And so on.  If you look back in time it gets worse.  Just in the 23 or so years in which I have been working on these issues, numerous LANL construction projects have had to be scrapped.  Others were completed at very high cost, such as DARHT.

"It would be appropriate at this juncture to ask LANS to show cause as to why it should continue to manage LANL."

***ENDS***