[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]


                                                                      ?

                      ENERGY AND WATER DEVELOPMENT

                        APPROPRIATIONS FOR 2014

_______________________________________________________________________

                                HEARINGS

                                BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                     ONE HUNDRED THIRTEENTH CONGRESS
                              FIRST SESSION
                                ________
              SUBCOMMITTEE ON ENERGY AND WATER DEVELOPMENT
              RODNEY P. FRELINGHUYSEN, New Jersey, Chairman
 MICHAEL K. SIMPSON, Idaho          MARCY KAPTUR, Ohio
 RODNEY ALEXANDER, Louisiana        PETER J. VISCLOSKY, Indiana
 ALAN NUNNELEE, Mississippi         ED PASTOR, Arizona
 KEN CALVERT, California            CHAKA FATTAH, Pennsylvania  
 JOHN R. CARTER, Texas              
 CHARLES J. FLEISCHMANN, Tennessee  
                                    

 NOTE: Under Committee Rules, Mr. Rogers, as Chairman of the Full 
Committee, and Mrs. Lowey, as Ranking Minority Member of the Full 
Committee, are authorized to sit as Members of all Subcommittees.
             Rob Blair, Angie Giancarlo, Loraine Heckenberg,
                      Ben Hammond, and Perry Yates,
                            Staff Assistants

                                ________

                                 PART 7
                          DEPARTMENT OF ENERGY
                                                                   Page
 Nuclear Waste Programs and Strategies............................    1
 Major Construction Projects, FY 2014 Budget......................  145

                                ________

         Printed for the use of the Committee on Appropriations

 
      PART 7--ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR 2014
                                                                      ?

                      ENERGY AND WATER DEVELOPMENT

                        APPROPRIATIONS FOR 2014

_______________________________________________________________________

                                HEARINGS

                                BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                     ONE HUNDRED THIRTEENTH CONGRESS
                              FIRST SESSION
                                ________
              SUBCOMMITTEE ON ENERGY AND WATER DEVELOPMENT
              RODNEY P. FRELINGHUYSEN, New Jersey, Chairman
 MICHAEL K. SIMPSON, Idaho          MARCY KAPTUR, Ohio
 RODNEY ALEXANDER, Louisiana        PETER J. VISCLOSKY, Indiana
 ALAN NUNNELEE, Mississippi         ED PASTOR, Arizona
 KEN CALVERT, California            CHAKA FATTAH, Pennsylvania  
 JOHN R. CARTER, Texas              
 CHARLES J. FLEISCHMANN, Tennessee  
                                    

 NOTE: Under Committee Rules, Mr. Rogers, as Chairman of the Full 
Committee, and Mrs. Lowey, as Ranking Minority Member of the Full 
Committee, are authorized to sit as Members of all Subcommittees.
             Rob Blair, Angie Giancarlo, Loraine Heckenberg,
                      Ben Hammond, and Perry Yates,
                            Staff Assistants

                                ________

                                 PART 7
                          DEPARTMENT OF ENERGY
                                                                   Page
 Nuclear Waste Programs and Strategies............................    1
 Major Construction Projects, FY 2014 Budget......................  145

                                ________

         Printed for the use of the Committee on Appropriations
                                ________
                     U.S. GOVERNMENT PRINTING OFFICE
 87-779                     WASHINGTON : 2014

                                  COMMITTEE ON APPROPRIATIONS

                    HAROLD ROGERS, Kentucky, Chairman

 C. W. BILL YOUNG, Florida \1\      NITA M. LOWEY, New York
 FRANK R. WOLF, Virginia            MARCY KAPTUR, Ohio
 JACK KINGSTON, Georgia             PETER J. VISCLOSKY, Indiana
 RODNEY P. FRELINGHUYSEN, New JerseyJOSE E. SERRANO, New York
 TOM LATHAM, Iowa                   ROSA L. DeLAURO, Connecticut
 ROBERT B. ADERHOLT, Alabama        JAMES P. MORAN, Virginia
 KAY GRANGER, Texas                 ED PASTOR, Arizona
 MICHAEL K. SIMPSON, Idaho          DAVID E. PRICE, North Carolina
 JOHN ABNEY CULBERSON, Texas        LUCILLE ROYBAL-ALLARD, California
 ANDER CRENSHAW, Florida            SAM FARR, California
 JOHN R. CARTER, Texas              CHAKA FATTAH, Pennsylvania
 RODNEY ALEXANDER, Louisiana        SANFORD D. BISHOP, Jr., Georgia
 KEN CALVERT, California            BARBARA LEE, California
 JO BONNER, Alabama                 ADAM B. SCHIFF, California
 TOM COLE, Oklahoma                 MICHAEL M. HONDA, California
 MARIO DIAZ-BALART, Florida         BETTY McCOLLUM, Minnesota
 CHARLES W. DENT, Pennsylvania      TIM RYAN, Ohio
 TOM GRAVES, Georgia                DEBBIE WASSERMAN SCHULTZ, Florida
 KEVIN YODER, Kansas                HENRY CUELLAR, Texas
 STEVE WOMACK, Arkansas             CHELLIE PINGREE, Maine
 ALAN NUNNELEE, Mississippi         MIKE QUIGLEY, Illinois
 JEFF FORTENBERRY, Nebraska         WILLIAM L. OWENS, New York         
 THOMAS J. ROONEY, Florida          
 CHARLES J. FLEISCHMANN, Tennessee  
 JAIME HERRERA BEUTLER, Washington  
 DAVID P. JOYCE, Ohio               
 DAVID G. VALADAO, California       
 ANDY HARRIS, Maryland              
   
 ----------
 1}}Chairman Emeritus    
                                    

               William E. Smith, Clerk and Staff Director

                                  (ii)


          ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR 2014

----------                              ----------

                                          Thursday, April 11, 2013.

                 NUCLEAR WASTE PROGRAMS AND STRATEGIES

                               WITNESSES

Panel 1:
PETER B. LYONS, ASSISTANT SECRETARY FOR NUCLEAR ENERGY, DEPARTMENT OF 
    ENERGY
MICHAEL WEBER, DEPUTY EXECUTIVE DIRECTOR FOR MATERIALS, WASTE, 
    RESEARCH, STATE, TRIBAL, AND COMPLIANCE PROGRAMS, NUCLEAR 
    REGULATORY COMMISSION
Panel 2:
FRANK RUSCO, DIRECTOR OF NATURAL RESOURCES AND ENVIRONMENT ENERGY AND 
    SCIENCE, GOVERNMENT ACCOUNTABILITY OFFICE
SUSAN EISENHOWER, FORMER MEMBER, BLUE RIBBON COMMISSION ON AMERICA'S 
    NUCLEAR FUTURE
RODNEY C. EWING, CHAIRMAN, NUCLEAR WASTE TECHNICAL REVIEW BOARD
    Mr. Frelinghuysen. The hearing will come to order. Thank 
you all for being here promptly.
    The purpose of today's hearing is to discuss the 
Administration's activities and proposals to address our 
nation's nuclear waste. I would like to welcome our first panel 
of witnesses, Dr. Peter Lyons. Welcome back. I looked over your 
resume, and may I say you have worked for the Department of 
Energy for over 50 years.
    Mr. Lyons. Thank you, sir.
    Mr. Frelinghuysen. Lots of testimony. Thank you for being 
front and center before us today.
    I would also like to welcome Mr. Michael Weber from the 
Nuclear Regulatory Commission. He is a deputy executive for 
Operations. Thank you for being here.
    Mr. Weber. Nice to be here.
    Mr. Frelinghuysen. After we hear from these witnesses about 
the Administration's current activities and proposals and have 
a chance to question them fully, we will have a second panel to 
provide us with some perspectives from outside the 
Administration. That second panel will include Mr. Frank Rusco, 
Director of Natural Resources and Environment for the GAO, 
Government Accountability Office. Ms. Susan Eisenhower, former 
member of the Blue Ribbon Commission (BRC). Thank you for being 
here. Dr. Rodney Ewing, chairman of the Nuclear Waste Technical 
Review Board will make up the second panel.
    I do not need to dwell on the fact that nuclear waste has 
been a very controversial issue between Congress and the 
Executive Branch. Yucca Mountain will not be the sole focus of 
this hearing but it will underline many of your questions. It 
will continue to provide the backdrop for congressional 
evaluation of any new proposals, including those before us 
today. It will continue to erode trust, not only between 
branches of the federal government, but also between the 
Executive Branch and local communities seeking to host 
additional sites. And it will be the lens through which the 
credibility of the Nuclear Regulatory Commission is viewed. We 
will provide a fair hearing today and it will be fair because 
we will incorporate Yucca Mountain into our discussions, not 
because we ignore it.
    The Administration's latest proposals to address nuclear 
waste appear to be a little more than a blueprint for dialogue 
to get us past Yucca Mountain. And no wonder--the 
Administration, and we as a nation, are faced with some very 
uncomfortable facts. For one, the longer this nation goes 
without taking responsibility for spent fuel, the higher the 
bill is to the federal taxpayer. At this point, liabilities are 
likely to be near $20 billion, in addition to billions already 
paid. This liability is directly and entirely caused by the 
Administration's Yucca Mountain policy. In addition, the 
Administration's arguments in court that Congress has failed to 
provide funding to support the application at the NRC are 
patently disingenuous at best. I can indeed understand the 
Administration's desire to have the Yucca Mountain repository 
disappear from public view but it is not going to disappear 
from public view. And I think that is the general consensus of 
both the House Republicans and Democrats.
    The future of nuclear waste will be built on substantive 
decisions--how to provide funding, and what sort of 
organization should manage the waste and the facilities among 
them. These decisions will take time and deliberation and many 
hearings. In addition to this one I must make it clear that we 
are holding this hearing in the hopes that the Administration 
will find a path forward to fulfill its legal requirements 
regarding Yucca. The Administration's attempts to shutter the 
Yucca Mountain program have already killed attempts to make 
construction progress on other solutions. Let us hope that this 
unfortunate situation will soon come to an end.
    We have many witnesses to hear from today, and I want to 
thank all of them for being here and for their substantive 
testimony which we have in front of us. So I welcome all the 
panelists. Before that I just want to recognize that Joe Levin, 
who is to my right, who has this as his portfolio, will be 
leaving the Committee after a number of years of service, both 
to the minority under former Chairman Pete Visclosky, and now 
as my chair on the Committee. He has served both of our parties 
and our nation well. Of course, he goes to the dark side, to 
the Department of Energy. But we know that he will do a great 
job there as well, and he will go there obviously with our 
thoughts and prayers and our knowledge of all that we hold to 
our heart.
    So with those comments, Joe, good luck to you, and I am 
happy to yield to Ms. Kaptur for any comments she may have.
    [The information follows:]

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    [GRAPHIC] [TIFF OMITTED] T7779A.002
    
    Ms. Kaptur. Thank you, Mr. Chairman. And let me also extend 
my very best wishes to Joe and thank him for his service to our 
country and his service to this very important Subcommittee.
    Good morning. I would like to welcome our first panel in 
today's hearing. Dr. Lyons and Mr. Weber are representing the 
Department of Energy and the Nuclear Regulatory Commission, 
respectively.
    The programs related to nuclear waste at the Department of 
Energy and the NRC impact many regions of our country, and in 
particular those including my own district where nuclear power 
plants are or were in operation. The government must live up to 
its responsibility and provide for the eventual safe disposal 
of commercial spent fuel that is currently stored at the sites. 
Further, the government has an obligation to safely package and 
store the high-level radioactive waste generated by the Nuclear 
Weapons Program.
    In the wake of the administration's decision to terminate 
Yucca Mountain, the nation does not currently have a solution 
to this pressing problem. We have spent enormous amounts of 
money on Yucca and what do we have to show for that investment? 
I hope the panelists will help answer that question today.
    In January, the Department of Energy outlined its new 
strategy for the management and disposal of this waste based on 
the work done by the Blue Ribbon Commission. This strategy 
outlines the administration's new approach to disposal of this 
waste, one in which we appear to be essentially starting from 
scratch.
    With the second panel, we will hear from Mr. Rusco 
representing the GAO; Ms. Eisenhower, who served on the Blue 
Ribbon Commission; and Dr. Ewing with the Nuclear Waste 
Technical Review Board. I look forward to the insights that 
this panel can give from a perspective outside the programs 
managed by the DOE and the NRC. Thank you, Mr. Chairman, for 
this time.
    Mr. Frelinghuysen. Thank you, Ms. Kaptur.
    Dr. Pete Lyons, thanks for being with us. We welcome your 
testimony.
    Mr. Lyons. Thank you, sir.
    Chairman Frelinghuysen, Ranking Member Kaptur, and members 
of the Subcommittee, it is again an honor to meet with you. In 
my testimony a month ago, I noted the vital role of nuclear 
power in the nation's clean energy portfolio and the 
administration's support for it. I also noted our research and 
development roadmap that we published in April of 2010, wherein 
four goals were highlighted. One of those, to demonstrate 
progress towards a sustainable fuel cycle is the subject of 
this hearing. Significant progress on this challenge, in my 
view, is vital to assure the future viability of U.S. nuclear 
power.
    In 2010, the secretary established the Blue Ribbon 
Commission on America's Nuclear Future to conduct a 
comprehensive review of policies for managing the backend of 
the nuclear fuel cycle, and that Commission issued its final 
report in January of 2012.
    In January 2013, the Department released the 
administration's Strategy for the Management and Disposal of 
Used Nuclear Fuel and High-Level Radioactive Waste, which 
endorsed key principles of the Commission's report. The 
strategy represents administration's policy to emphasize the 
importance of addressing the disposition of used nuclear fuel 
and high-level rad waste. It also represents a base for 
discussions among the administration, Congress, and other 
stakeholders on a path forward. In the meantime, we are 
undertaking activities within existing authorizations to plan 
for transportation, storage, and disposal of used nuclear fuel.
    Subject to legislation, the strategy lays out plans to 
implement a program over the next 10 years that begins 
operation of a pilot interim storage facility in 2021, advances 
towards the siting and licensing of a larger interim storage 
facility by 2025, and makes demonstrable progress towards a 
geologic repository.
    The strategy notes that some or all of these facilities 
could be co-located, and all could accept defense waste in 
addition to commercial used fuel. The strategy also fully 
endorses the need for consent-based siting and highlights the 
need for a new waste management and disposal organization to 
provide the stability, the focus, and the credibility to build 
public trust and confidence.
    Consistent with the strategy, the president's Fiscal Year 
2014 budget request announced yesterday includes three new 
proposals to move ahead with developing the nation's used 
nuclear fuel and high-level waste management system. First, it 
lays out a comprehensive funding reform proposal, including 
three elements for funding reform. First is ongoing 
discretionary appropriations. Second is reclassification of 
spending. And third is access to the balance of the Nuclear 
Waste Fund when needed.
    The administration supports an ongoing role for the 
Appropriations Committees to provide vital mission oversight. 
Therefore, the ongoing discretionary appropriations are 
proposed in amounts up to $200 million per year, starting at 
modest levels in the near term and increasing as planning, 
management, and regulatory activities increase. In addition to 
these amounts, the proposal includes mandatory spending 
beginning in 2017 of the Nuclear Waste Fund for amounts needed 
above 200 million; amounts that would be needed to pay for the 
design and construction of storage facilities, as well as to 
execute a robust siting process for a geologic repository. This 
proposal balances access to the fees dedicated to the nuclear 
waste mission with oversight from Congress and the Executive 
Branch.
    Second, for the first time the budget baseline reflects a 
more compete estimate of potential future costs of the 
liability associated with continuing to pay utilities based on 
the government's liability for partially breaching its contract 
to dispose of used nuclear fuel. The cost of the government's 
growing liability for partial breach of contracts with nuclear 
utilities is, as you know, paid from the Judgment Fund. While 
payments are extensively reviewed by the Department of Energy 
and must be authorized by the Attorney General prior to 
disbursement by the Treasury, as mandatory spending, they are 
not subject to OMB or congressional approval. Past payments are 
included in full in the budget, but until now the budget has 
included only a partial estimate of the potential future cost 
of continued insufficient action. To improve budget 
projections, the baseline for the Judgment Fund in this budget 
reflects a more complete estimate of potential future costs of 
these liabilities. By reflecting a more complete estimate of 
the liability payments in the baseline, costs over the life of 
the Nuclear Waste Management and Disposal Program would 
eventually be offset for the purposes of scoring against the 
baseline by reductions in liabilities as the government begins 
to pick up sufficient waste from commercial sites.
    And third, the president's budget includes funding and 
authority for the EPA to begin revision of generic disposal 
standards to support the siting of used fuel and high-level 
waste facilities. The administration agrees with the Blue 
Ribbon Commission that generally applicable regulations are 
more likely to early public confidence than site-specific 
standards and a generic standard will support the efficient and 
equitable consideration of multiple sites.
    The administration looks forward to working with the 
Subcommittee and other members on crafting a path forward for 
used nuclear fuel and high-level waste management and disposal. 
This progress is critical to assure that the benefits of 
nuclear power are available to current and future generations. 
And I will look forward to your questions.
    [The statement of Mr. Lyons follows:]

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    Mr. Frelinghuysen. Thank you, Dr. Lyons.
    Mr. Weber, good morning. Thank you for being with us.
    Mr. Weber. Good morning, Chairman Frelinghuysen and Ranking 
Member Kaptur and other distinguished members of the 
Subcommittee. I appreciate the opportunity to discuss the 
regulatory program for high-level radioactive waste management 
at the U.S. Nuclear Regulatory Commission.
    In my testimony today, I will highlight NRC's mission to 
protect the public health and safety, promote the common 
defense and security, and protect the environment, and our 
current work related to the orderly closure of the Yucca 
Mountain Review, Waste Confidence, and ensuring the safety and 
security of spent nuclear fuel and ultimate disposal in a 
geologic repository.
    The agency completed the orderly closure of our licensing 
review of the proposed repository at Yucca Mountain by the end 
of Fiscal Year 2011. We documented and published in this series 
of documents and in others the results of the NRC's review. 
This stack represents one volume of the Safety Evaluation 
Report and three volumes of the Technical Evaluation Report. 
Additionally, we developed over 40 other documents to describe 
the status of the technical review at the time the staff 
suspended that review. In September 2011, the Atomic Safety and 
Licensing Board completed all necessary and appropriate case 
management activities associated with the hearing process. And 
since the closure of our review activities, the NRC has 
continued to close out contracts and recoup additional funds, 
making them available from the previous carryover amount. As a 
result, the NRC today has about $11.1 million in unobligated 
carryover money and about $2.5 million in obligated unexpended 
money from the Nuclear Waste Fund. No additional funds from the 
Nuclear Waste Fund were appropriated to the NRC to perform any 
additional work related to Yucca Mountain in Fiscal Years 2012 
and 2013.
    The agency's actions to close the review of Yucca Mountain 
and the license application review have been challenged in the 
D.C. Circuit Court of Appeals. In August 2012, the D.C. Circuit 
issued an order holding the case in abeyance pending decisions 
on appropriations for Fiscal Year 2013. With the recent passage 
of those appropriations, the parties in the case have since 
advised the Court that no additional funds related to Yucca 
Mountain have been appropriated for either the NRC or the 
Department of Energy. We are awaiting a decision at this time 
from the Court.
    Regarding Waste Confidence, my second topic, the Waste 
Confidence decision represents the Commission's generic finding 
regarding the environmental impacts of continued storage of 
spent nuclear fuel after the end of the licensed operation of a 
nuclear power plant and prior to the ultimate disposition or 
disposal of that fuel in a permanent repository. Last year, the 
D.C. Circuit Court identified three aspects of the Waste 
Confidence decision that required additional consideration 
under the National Environmental Policy Act. In response to the 
Court's decision, the Commission directed the NRC staff to 
prepare by September 2014 a Generic Environmental Impact 
Statement that focuses on those deficiencies that were 
identified in the D.C. Circuit Court decision. The Commission 
also directed the staff to prepare a revised temporary storage 
rule, and that all affected license application reviews will 
continue. The agency will not issue final licenses dependent on 
Waste Confidence until these issues have been addressed.
    We recently completed the scoping process for the 
environmental impact statement on Waste Confidence and issued a 
scoping summary report in early March. We have extensively 
engaged the public in the process, holding more than six public 
meetings so far, distributing documents to hundreds of 
interested stakeholders, and assessing over 1,700 comments on 
the proposed scope of the impact statement. We expect the draft 
generic environmental impact statement to be available for 
public comment later this year, and we are committed to 
completing that statement and the Temporary Storage Rule in an 
effective, efficient, timely, and open manner.
    And finally, and most importantly, the agency ensures daily 
that nuclear fuel is stored, handled, and transported safely 
and securely through our comprehensive regulatory program that 
includes licensing, oversight, rulemaking, research, incident 
response, and international cooperation. The NRC staff 
regularly inspects spent fuel pools and dry cask storage 
facilities, and we are soliciting comments from stakeholders 
and refining our regulatory processes for spent fuel storage 
and transportation to enhance their effectiveness and their 
efficiency. In addition, we are cooperating with the Department 
of Energy, with the industry, international regulatory 
counterparts, and other interested stakeholders to identify, 
assess, and resolve safety, security, safeguards, and 
environmental issues associated with storage, transportation, 
and disposal of spent fuel.
    Chairman Frelinghuysen, Ranking Member Kaptur, and 
distinguished members of the Subcommittee, thank you for the 
opportunity to appear before you today, and I would be pleased 
to respond to your questions.
    [The statement of Mr. Weber follows:]

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    Mr. Frelinghuysen. Thank you, Mr. Weber. I thank both of 
you for your testimony.
    Dr. Lyons, the Department proposed quite a bit of work in 
its Fiscal Year 2013 request relating to consolidated interim 
storage, a consent-based siting process, and again you 
requested funding for the Fiscal Year 2014 budget for these 
activities. Many would argue, and I am one of them, that some 
of the activities you have proposed for both years are 
unauthorized but we will turn to that in a minute.
    I am interested in discussing the work that you have 
proposed for both of those years. You have $60 million for the 
used nuclear fuel disposition activities. What specific 
activities does that request propose to fund?
    Mr. Lyons. There is a wide range of activities, sir, and we 
would be happy to provide more detailed information. But to 
give you at least an overview of a number of the activities, 
for example, we are evaluating different generic geologic 
formations to better understand the extent to which they could 
be used as a geologic repository. We are either restarting or 
reinvigorating international cooperation in order to benefit 
from the activities going on internationally using a number of 
different geologic media. We are working with transportation 
networks to begin to reactivate the transportation planning and 
activities that would be needed if we can resume 
transportation. We are looking towards research in borehole 
disposal as still another possibility towards a geologic 
disposal site. We are planning what consolidated sites could 
look like. We have evaluated all of these with care to be sure 
that in the opinion of our counsel that we are well within the 
Nuclear Waste Policy Act requirements.
    Mr. Frelinghuysen. Is there any difference between the 
activities that you had for 2013 and 2014 in terms of the type 
of activities that you are involved in? Are you, for instance, 
soliciting designs for consolidated interim storage facilities?
    Mr. Lyons. We would look towards generic designs, but I am 
doing nothing that could be interpreted as site-specific 
activities. I believe that generic activities are well within 
the Nuclear Waste Policy Act based on our general counsel's 
review. But we are doing no site-specific activities.
    Mr. Frelinghuysen. So you, to your mind, have the authority 
to do what you are doing?
    Mr. Lyons. Yes, sir.
    Mr. Frelinghuysen. All right. So you would disagree with 
some of us who feel that to a great extent you are violating 
congressional intent here by proceeding the way you are?
    Mr. Lyons. We have evaluated it carefully, sir. We believe 
we are well within the authorizations we have.
    Mr. Frelinghuysen. You were additionally constrained in 
Fiscal Year 2013, as were others, because you were operating 
under the continuing resolution. Which of the activities 
proposed under the used nuclear fuel disposition in the Fiscal 
Year 2013 budget request is the Department currently moving 
forward on?
    Mr. Lyons. The ones I listed.
    Mr. Frelinghuysen. Any others?
    Mr. Lyons. Are all being moved on now in 2013, except for 
the borehole work which is really just starting, of the ones I 
listed. And much of that work then will continue and expand in 
2014 under the proposed budget.
    Mr. Frelinghuysen. Ms. Kaptur.
    Ms. Kaptur. Thank you, Mr. Chairman.
    Dr. Lyons, some other nations such as France are 
considering closed or modified fuel cycles that use 
reprocessing or other means to extract more energy, and as you 
know, those processes appear to have potential to considerably 
reduce both the amount of high-level waste and the number of 
years that waste remains dangerous. What are the risks, both 
here and abroad, of these other fuel cycles? And also, per unit 
of energy generated, how much could a closed fuel cycle reduce 
our quantity of nuclear waste produced?
    Mr. Lyons. Did you ask what are the risks? Was that the 
word you used?
    Ms. Kaptur. Yes.
    Mr. Lyons. Well, there is at least--the primary risk I 
would list, Ms. Kaptur, would be we have research programs to 
try to work towards reprocessing systems that would provide 
less environmental damage and less proliferation risk and the 
PUREX process which is used in several countries. France uses 
the PUREX process, albeit a somewhat improved one over the one 
that we initiated back in the war years. So I am not sure if 
that addresses your question. Those are least risks.
    Now, the French process does reduce somewhat the volume of 
waste, but the Department, the administration strongly agrees 
with the views expressed by the Blue Ribbon Commission, that 
the first focus in this country should be on demonstrating that 
we can open and operate a geologic repository. Even if we 
reprocess, such a repository will still be needed which is also 
why France is moving ahead with a repository. At the same time, 
the Blue Ribbon Commission endorsed and we maintain the strong 
research programs looking at future options for possible 
closing of the fuel cycle. In my view, whether a decision is 
made to close the fuel cycle in the future will depend on a 
complicated evaluation of a number of different factors by the 
leaders in Congress, and that will include the economics of 
repositories, the economics of reprocessing, the environmental 
impacts of reprocessing, and a number of other factors.
    Ms. Kaptur. If you were to look back, I actually do not 
remember when the Yucca Mountain project was first proposed. 
Could you estimate how much our country has spent to date on 
that project? And there are those who argue it was a complete 
waste of money. How would you respond to their criticisms, and 
approximately how much money has the nation now spent, and what 
have we gotten for it?
    Mr. Lyons. Work on Yucca Mountain actually started before--
on a limited basis started before the Nuclear Waste Policy Act 
of 1982, so it is a long time. You will get slightly different 
estimates of how much has been invested in Yucca as opposed to 
generic activities, but under the order of $11 billion and we 
might quibble on the last digit, it is a very, very large 
number.
    Ms. Kaptur. And so for those that argue it was a waste of 
money we got nothing for it. How would you begin to respond to 
that criticism?
    Mr. Lyons. I would respond that I grew up in Nevada, I 
lived in Nevada, I worked in Nevada, I directed the Los Alamos 
research on Yucca Mountain. I worked on Yucca Mountain when I 
was with Senator Domenici on the Hill. I have spent a good 
fraction of my life looking at Yucca Mountain and looking at, 
frankly, the politics in Nevada and the poisonous atmosphere 
created by the Nuclear Waste Policy Act Amendments of 1987. In 
my view, and the reason I continue in this job as one of my 
main focus areas, is I want to see progress. And in my view, I 
do not believe we will see that progress if we continue to try 
to force Yucca Mountain in Nevada. I think it is time to find--
use a consent-based process, find a host that is eager for the 
project, and cut our losses and move ahead.
    Ms. Kaptur. If you were to go back and analyze the $11 
billion that was spent, obviously property was purchased, but 
what was the $11 billion expended on decade after decade after 
decade?
    Mr. Lyons. It was extensive characterization of the site, 
and that was some other research I directed at Los Alamos. It 
also went into preparation of the license application which was 
filed by the Department of Energy. A great deal of technical 
work. Also, a great deal of physical work at the site, very 
large tunnel, multiple boreholes, test holes, wells. It is a 
rather extensive complex and I have been in it many times.
    Ms. Kaptur. All right. Any detail you could provide to the 
record, and also to think about and so what did the nation 
learn from the expenditure of the $11 billion, other than the 
politics of Nevada.
    Mr. Lyons. Well, certainly there was substantial evaluation 
of what it takes for a successful repository and how the 
materials in spent fuel might possibly migrate through the 
environment into the biosphere where it could possibly affect 
people. Some of that, of course, is specific to Yucca, but much 
of it is broadly applicable to any repository. And Mike should 
speak to the NRC, but certainly much of the work at the NRC 
would also apply to other repository configurations.
    Ms. Kaptur. Thank you. Thank you, Mr. Chairman.
    Mr. Frelinghuysen. Mr. Simpson.
    Mr. Simpson. Thank you, Mr. Chairman.
    I would argue that we have actually got something out of 
Yucca, and that is a big hole in the ground.
    Mr. Lyons. Yes, sir.
    Mr. Simpson. In order to store all of the studies that have 
been done on the most studied piece of earth in the world. So, 
we got something out of it.
    You mentioned just now that we have made some progress, or 
at least we have looked at things that ought to be looked at by 
the NRC. Would there be any--and I will ask Mr. Weber this--
would there be an advantage to continuing the license 
processing for Yucca Mountain even if we never put a barrel of 
anything in it except for all these studies? In order to get 
the process down so that when we do, if we switch to interim 
storage and a consent-based geological repository somewhere, 
can we learn anything from continuing the licensing process or 
just shutting it off now?
    Mr. Weber. Thank you, Congressman Simpson.
    We benefited from our experience in conducting the 
licensing review because it is an unprecedented review for the 
Nuclear Regulatory Commission, and it was the first time we 
applied the regulations that were developed specifically for 
the proposed Yucca Mountain repository site. And in doing that, 
as Dr. Lyons has already pointed out, we had decades of actual 
physical experience in applying, understanding what technical 
demonstration would be required to make the case, that this 
facility would protect the environment for a million years, as 
well as understanding the nuances of the design. How would you 
best design a facility like that to isolate the waste for 
essentially the rest of time?
    And in conducting our review, when we terminated the 
review, when we closed down the review, we took great care to 
document the results of our review that had been done to date 
in the form of these documents and the other documents that I 
referred to in my testimony because we wanted to preserve the 
knowledge gained, the capabilities, the analytical capabilities 
that were developed both within the Department of Energy and 
with the NRC so that we could make the necessary safety and 
environmental findings that we would have to make if we were to 
license the repository.
    I would also like to address your point on interim storage. 
NRC has a demonstrated regulatory process that has been used 
successfully to license away from reactor independent spent-
fuel storage installations, so we are quite confident that the 
regulations are in place and our regulatory processes are in 
place that could be used if there were another facility that 
would be proposed for away from reactor interim storage of 
spent nuclear fuel that we could do that review.
    Mr. Simpson. But the question was would there be any 
benefit to continuing the licensing process, even if we do not 
end up opening Yucca Mountain? For the next four years, Yucca 
Mountain is not going to be a possibility. That is just the 
reality. But we have got to move past this debate. All I am 
asking is would there be any benefit of continuing the 
licensing process? Would we learn anything additional? Because 
at some point in time we are going to have to get a geological 
repository to put all the gunk that is left over. Or are we 
losing anything by just shutting down the licensing process 
now?
    Mr. Weber. I think we have captured all that we can capture 
within the program that we have exercised to date. At NRC, we 
focus on continuous improvement, and we always learn from our 
experience. And we apply that insight back into our regulatory 
processes to ensure that we are more effective and more 
efficient to better accomplish the mission of the NRC.
    Mr. Frelinghuysen. If the gentleman will yield.
    The political process has trumped the licensing process 
here. I mean, this is the thing that disturbs us. I think 
Congressman Simpson is suggesting let us at least keep the 
licensing process alive. I think it is entirely reasonable. I 
must say I am enjoying a lot of people being upset with what 
has happened here. I do not regard this as a dead issue. I 
mean, at some point in time, given the difficulty of finding a 
community that is going to consent, we are going to be back at 
this site.
    Excuse me. Thank you for yielding.
    Mr. Simpson. Dr. Lyons, the BRC in their discussions at one 
time suggested splitting commercial waste from weapons waste 
and then came to no conclusion on that. But you seemed in your 
testimony to say that the Administration is supportive of 
commingling those different waste streams at an interim storage 
facility?
    Mr. Lyons. Mr. Simpson, actually, no. That is not what the 
administration strategy says. The Administration strategy 
recognizes that, as you said, the BRC did not reach a 
conclusion on commingling defense and civilian waste, and the 
strategy also left that as an open question suggesting that 
that could benefit from further discussions with Congress. What 
I noted is that the strategy also notes that presuming Congress 
agrees, there is nothing that would prevent defense and 
civilian wastes from utilizing any of the facilities I 
mentioned--the pilot, the consolidated, and of course, the 
repository. But that decision is not specified in the strategy. 
That is left open for further discussions and guidance from 
Congress.
    Mr. Simpson. Well, obviously one of the problems is we 
cannot get one repository open, let alone having two 
repositories--one for civilian, one for defense waste. I 
question how long that would take.
    Let me ask you one more question. When you talk with 
communities that potentially could be interested in being in 
this consent-based site, one of their concerns is how to define 
interim. Does an interim storage facility become a de facto 
permanent repository? If I talk to people in Idaho, and there 
are some people who are saying, you know, we could do interim 
storage in Idaho. I am not saying that is a popular opinion, 
but the question that always comes back to them is, then will 
we be the permanent repository? What is your answer to that? 
How do you convince these locations that we are talking interim 
storage, which is how long?
    Mr. Lyons. Well, thank you very much for your question, and 
that is a very, very good question. Dealing with the whole 
issue of linkage between the interim and the repository, the 
Nuclear Waste Policy Act has a very, very tight linkage, which 
has had the effect of essentially blocking progress on an 
interim site. It is my understanding that when Senator Bingaman 
worked on his bill last year and was working with several 
colleagues, that it was the issue of linkage which led to only 
Senator Bingaman endorsing his final bill and the other 
colleagues not proceeding. And Senator Wyden has been quite 
public that as he is developing a bill this year, again with a 
number of colleagues, the linkage issue is a very sticky, very 
critical issue. So I completely agree with you.
    The administration strategy, again, did not specify exactly 
what the linkage should be, other than to recognize that if it 
is as strict as the Nuclear Waste Policy Act, it will preclude 
progress on interim storage, but it recognized that some degree 
of linkage is important. I think one can imagine a number of 
softened forms of linkage which I am sure will be debated in 
Congress that would provide some measure of assurance to a host 
site at a consolidated storage facility that it would not 
become permanent. I think one of the most important things in 
this regard is the Commission's and the Administration's 
support for a new organization which among many attributes 
needs to rebuild strong credibility with the communities that 
they are going to follow through on their actions.
    Mr. Simpson. Thank you.
    Mr. Frelinghuysen. Thank you, Mr. Simpson.
    Mr. Fattah.
    Mr. Fattah. I thank you.
    So we have a number of things going on. This Administration 
has moved for the first time in 30 years to license new nuclear 
facilities, and I think the Administration should be applauded 
for moving in this area.
    However, we have this continuing problem of storage. I was 
for Yucca Mountain, and I am still for Yucca Mountain. I guess 
everybody is for Yucca Mountain unless you live in Nevada; 
right? So the idea is that we could all have reliable 
electricity through nuclear, which we kind of went to sleep on 
for 30 years since Three Mile Island, but now we are back in 
the business. As long as we can send the waste to Nevada then 
we are good. And then something happened. There was an 
election. The President took a position that he would not 
proceed. And he won Nevada and he is probably not going to 
proceed. And so we are kind of stuck with the fact that we have 
been building up in these present facilities all of this waste, 
and we have been storing it onsite. Is that correct? So like in 
my nuclear plants in Pennsylvania it has been stored there; 
right?
    Mr. Lyons. Yes, sir.
    Mr. Fattah. Now, my question is about the actual form of 
the storage because we saw some of the challenges that Japan 
had with the tsunami. Are there benefits to storage as I think 
the term is dry cask--than just kind of have in this, in a 
liquid form. Moreover, should we require at least in the 100 or 
plus sites we have, should we make sure that the temporary 
storage that has been going on for decades, be made as safe as 
possible?
    Mr. Lyons. I am assuming that is more to you?
    Mr. Frelinghuysen. That is more to you. Mr. Weber.
    Mr. Weber. Okay. I would be happy to answer your question.
    At the Nuclear Regulatory Commission, we ensure whether it 
is wet or dry storage, that it is safe, and it is secure.
    Mr. Fattah. I know. But there is a difference between wet 
and dry; right?
    Mr. Weber. There is a difference.
    Mr. Fattah. And what I am asking is what is the safer form 
of the storage in the 115 present sites or so around the 
country?
    Mr. Weber. There are benefits to dry cask storage because 
it is less reliant on active operations, and you have passive 
features that ensure the safety and the security of the spent 
nuclear fuel. However, you do need to cool the fuel for a 
period of time before under the current certificates.
    Mr. Fattah. Now, I am aware of that. But we have been 
cooling for a long time. This has been going on for three 
decades. All right? If we are going to take another decade to 
discuss this issue rather can't we move this waste to an 
interim site before we eventually, you know, decide on a 
permanent site? Is this something that should be done now so if 
there was some occurrence that it would be in the best form for 
public safety. So dry is better than wet. And should we not 
think about a requirement to move this waste after the cooling 
to dry?
    Mr. Weber. We are considering just that now as part of our 
post-Fukushima follow-up actions. One of those studies that is 
underway----
    Mr. Fattah. Now we are making news. This is good.
    Mr. Weber [continuing]. Is to evaluate what the benefits 
are and what the tradeoffs are if you were to expedite the 
transfer from wet storage to dry storage. You are probably 
aware that most plants in the United States today do rely, to 
some extent, on dry storage already.
    Mr. Fattah. No, I am aware that some have taken more--what 
I would consider more prudent approaches.
    Mr. Weber. Most have.
    Mr. Fattah. And what I am saying is should we not get the 
stragglers to move towards safer procedures?
    Mr. Weber. And that is the study that we currently have 
underway and are aggressively pursuing it.
    Mr. Fattah. Do you want to project how long it might take 
us to determine empirically whether the study might say this? I 
mean, are we a decade away or how far away?
    Mr. Weber. The study is much sooner than that.
    Mr. Fattah. Okay.
    Mr. Weber. Our current focus is on completing the Waste 
confidence activities that I referred to in my testimony. But 
as part of that we want to ensure that the Waste confidence 
environmental impact statement and the Temporary Storage Rule 
are informed by current studies about safety and security. And 
so you will be hearing more about that throughout this year as 
we complete those studies and as we roll out the draft 
environmental impact statement. And then once that technical 
work is done, then that will feed the regulatory analysis next 
year and the year after on what the benefits are of expediting 
the spent fuel transfer.
    Mr. Fattah. Okay. And one last question. I was just out in 
Washington State. The leakage we have there, any comments about 
remediation and how we might deal with this issue?
    Mr. Lyons. Mr. Fattah, that is not within my program. That 
is the EM program but I might note that both the outgoing 
Secretary Chu and the nominee, Dr. Moniz in his confirmation 
hearing two days ago made it very clear that this is a focus of 
their attention and that they intend to resolve these issues.
    Mr. Fattah. Well, that was concise and succinct. It is not 
in your purview. I got you. Thank you very much.
    Mr. Frelinghuysen. Thank you, Mr. Fattah.
    Mr. Nunnelee.
    Mr. Nunnelee. Thank you, Mr. Chairman.
    You told us that the license review at Yucca Mountain cost 
approximately $11 million. How much have the two agencies spent 
on the actual termination of the licensing process?
    Mr. Frelinghuysen. The Department of Energy, Mr. Nunnelee, 
spent $138 million after the announcement that it was to be 
terminated, and that was through Fiscal Year 2012. There are 
small expenses that continue but they are quite small. $138 
million.
    Mr. Nunnelee. And from the Nuclear Regulatory Commission in 
Fiscal Year 2011, we spent about $7 million. But I would point 
out that a large amount of that effort was devoted to 
completing these documents so that we would preserve the 
knowledge and the status of the regulatory review. And so we do 
not see that as money lost; that it is actually well invested 
to preserve that knowledge.
    Mr. Frelinghuysen. Would the gentleman yield?
    Mr. Nunnelee. I always yield to the chairman.
    Mr. Frelinghuysen. You have those reports there but we are 
due some other reports. Where are the rest of the safety 
evaluation reports?
    Mr. Weber. These documents here would be the core that 
would be used if we resumed the review to prepare the safety 
Evaluation Report. This first volume is part of the Safety 
Evaluation.
    Mr. Frelinghuysen. But there are other volumes that are out 
there.
    Mr. Weber. These are the three volumes, and then there 
would be one other volume that is not prepared. That would be 
the fifth volume, and that would document license conditions 
that would be proposed.
    Mr. Frelinghuysen. Why is that held up? Do you have the 
resources to do it?
    Mr. Weber. We did not draft the fifth volume, and we closed 
down the review at the end of Fiscal Year 2011. We do not have 
additional resources.
    Mr. Frelinghuysen. How much would it take you to finish 
that safety evaluation report?
    Mr. Weber. The estimate that we shared with Congress last 
year was about $6.5 million. Now, as Commissioner Svinicki 
pointed out in a recent House hearing, time is the enemy 
because as time goes on some of our staff move on. They retire. 
They transfer to other agencies. So that cost will increase 
because bringing new people onboard will take more time to come 
up to speed, pick up where these reviews were stopped, and then 
apply themselves so that we could complete the regulatory 
findings. That would be documented in a Safety Evaluation 
Report.
    Mr. Frelinghuysen. Back to you. Thank you, Mr. Nunnelee.
    Mr. Nunnelee. Absolutely. So I think you are hitting on 
where my next question was going to be. If this Administration 
or successive Administration made the determination that, okay, 
we want to reactivate Yucca Mountain, what is it going to cost 
to get that going again?
    Mr. Lyons. Well, from the Department of Energy standpoint, 
Mr. Nunnelee, first, I would note that we believe we have 
identified a path forward, a very strong path forward between 
the BRC, the administration's position, and the budget. And we 
would certainly be interested in--we believe it would well 
serve the taxpayers to continue along that path.
    As far as what it would cost, that will depend on details 
of the court case. We do not know exactly what will be ordered 
in the case and the case is directly--will directly impact the 
NRC. But then the NRC actions will impact how the Department of 
Energy would respond. And of course, without knowing what the 
court decision will be, how it may be reviewed, at many levels 
of NRC DOE justice I cannot give you that answer.
    Mr. Weber. Within the Nuclear Regulatory Commission, if we 
resume the licensing review, we do not have an estimate for 
what it would take to complete that review. The bulk of the 
staff's technical work is completed and documented in these 
documents. The larger part of the cost will be the hearing 
costs. And we also suspended that hearing in Fiscal Year 2011, 
and so part of it will depend on whether we have an applicant 
to proceed with the licensing review, and then part of it will 
be how much litigation is associated with it being challenged. 
So at this point, we do not have any estimate.
    I would point out in terms of order of magnitude that when 
we were in full mode and doing the licensing review, we were 
estimating that it would take tens of millions of dollars to do 
the hearing process. And of course, we did not get those 
appropriations to support that, but that gives you an idea 
about the amount of resources it would require within the 
Nuclear Regulatory Commission.
    Mr. Lyons. If I could expand just briefly, sir. For the 
Department of Energy, we were spending of the order of $15 
million a month at the time of the shutdown decision. We 
currently have 18.5 million of carryover.
    Mr. Nunnelee. In all the work that you have done since the 
decision was made to stop the process, have you found any 
problems in the technical or safety merits of the site?
    Mr. Lyons. The Department of Energy, Mr. Nunnelee, 
submitted a license application based on their technical 
evaluation. The secretary's statement, certainly my statement, 
is that it is unworkable, but we are not commenting on the 
technical aspects which would be left up to the NRC to evaluate 
in the course of if the license were completed. But no, we have 
not identified a technical issue.
    Mr. Frelinghuysen. Would the gentleman yield? Would you 
address that issue? Have you found any technical or safety 
issues relating to Yucca's repository?
    Mr. Weber. These documents do not describe any significant 
technical concerns with respect to the safety of the proposed 
site. Now, I would have to provide a big caveat to that because 
these are the technical reviews. A big part of our licensing 
review is the hearing process, and it is in the hearing process 
that the parties are given an opportunity to challenge the 
veracity not just of the Department's application but also of 
the NRC staff's evaluation so that that process could reveal 
additional concerns that have yet to be spotlighted but we 
might have to resolve in order to make a final determination on 
the safety of the repository.
    Mr. Frelinghuysen. Thank you.
    Mr. Nunnelee.
    Mr. Nunnelee. So to wrap it up, is it accurate to say that 
in the 1980s, they got the geology and science right; they just 
did not contemplate the politics?
    Mr. Lyons. Well, again, Mr. Nunnelee, the evaluation of the 
Department of Energy was that the technical case was strong 
enough to submit the application. There has certainly been any 
number of studies which suggest that there could be other 
repository geometries or geologies which might offer 
significant advantages but that is not what is required in 
filing a license with the NRC. The license must show adequate 
safety and the NRC's judgment is based on adequate safety. But 
could there be other geologies that might offer additional 
advantages? There have been many writings suggesting that that 
is the case.
    Mr. Frelinghuysen. Thank you, Mr. Nunnelee.
    Mr. Visclosky.
    Mr. Visclosky. Thank you, Mr. Chairman.
    I am going to take Mr. Simpson's advice and look forward. 
Have settlements and judgments against the Department increased 
since the policy change on Yucca Mountain, Dr. Lyons?
    Mr. Lyons. Thank you for the question, Mr. Visclosky.
    I do not have a breakdown by year. I know that the total we 
have paid is $2.6 billion to date for the liability judgments, 
and I do not have it broken down by year. If you need that we 
can certainly provide it.
    Mr. Visclosky. I would appreciate having that.
    Mr. Lyons. Okay.
    Mr. Visclosky. Do you know to date how much has been paid 
out of the judgment fund?
    Mr. Lyons. That is the $2.6 billion, sir.
    Mr. Visclosky. That is the $2.6 billion.
    Could you give us an estimate as to what the potential 
liability from that fund is going to be because of the failure 
to meet contractual obligations between now and 2048?
    Mr. Lyons. The estimate is of the order of $20 billion, 
assuming that we can move ahead with moving waste in 2020. Now, 
that is even sooner than we anticipate with a pilot of 2021, so 
that number might be slightly different. And those payments 
extend well beyond 2020, up to at least 2048. The number is 
about $400 million a year average is anticipated for those 
judgments. A precise number, of course, depends on the details 
of the cases that are filed, the dates of the settlements, 
exactly what is in the settlements, but of the order of $400 
million a year.
    Mr. Visclosky. If you meet the 2020 deadline, did I 
understand your answer being that the liability would still be 
potentially $20 billion?
    Mr. Lyons. Additional $20 billion on top of the $2.6.
    Mr. Visclosky. Of the $2.6----
    Mr. Lyons. Yes.
    Mr. Visclosky. Which dwarfs the $11 billion, although--and 
I am not quibbling over your answer on the $11 billion, but I 
think the Committee's position would be we probably invested 
about $15 billion here to date? I am not quibbling.
    Mr. Lyons. There are good numbers between 10 and 15.
    Mr. Visclosky. Right. But $20 billion.
    We are in 2013. Do you have an estimate as to how many 
dollars will be paid out of the judgment fund this year?
    Mr. Lyons. I only know the average number, sir, and that is 
the $400 million.
    Again, projecting ahead in any one specific year is very 
difficult without knowing--without being able to project what 
will happen in the court system.
    Mr. Visclosky. Right. Right.
    Although, as Mr. Weber said, there have been increased 
court activity and judgments here. Or decisions I should say 
that have taken place. So if we take the $11 billion, $400 
million average, we are going to be adding to that figure. And 
that is assuming we hit a benchmark of 2020 looking forward.
    Mr. Lyons. I think I follow your reasoning.
    Mr. Visclosky. Listen, sometimes I do not.
    Mr. Lyons. You are adding the $11 billion.
    Mr. Visclosky. Do not worry about it.
    Mr. Lyons. You are adding my number of $11 billion.
    Mr. Visclosky. Well, I am saying taking your number of 11 
and taking the average--and understanding it is an average, 
every year is different, none of us can predict the future, but 
we potentially are looking for another $400 million out of the 
settlement fund each year assuming we hit the 2020 date, to add 
to the cost being expended because of the failure to do Yucca.
    Mr. Lyons. That is correct, sir. And that is why the 
administration's action to begin to more accurately count the 
liabilities as an offset of the overall cost of the program I 
believe is such an important step. And that is one of the three 
key actions I described that are in the budget announced 
yesterday.
    Mr. Visclosky. Right.
    Chairman, I just have a statement. And gentlemen, this is 
not directed to you because this was not your decision. I 
understand that. But I must tell you as an American citizen I 
am appalled that we have a very sophisticated hole in the 
ground in one of our 50 states that we have spent somewhere 
between $11 and $15 billion for. We are going to add $400 
million on average maybe a year going forward to the taxpayers 
of this country, some of whom make a living waiting on tables 
all day at a diner. Some people who work in a paper mill 
someplace. They work hard for that money and it is gone. It is 
gone and it is still going. And I think as a citizen what I 
find most appalling, and Congress has blame here, too, is the 
designation was made in 1987. And in the recommendations made, 
if everything breaks right and we have consent siting, we are 
talking about, what is it, 2048. For a country as good and 
talented and wealthy and smart as the United States of America 
to take 61 years and 15 administrations to make one lousy 
stinking decision where to put this stuff is appalling. And I 
do not direct that to you. It is a comment on how we govern 
today.
    Thank you, Mr. Chairman.
    Mr. Frelinghuysen. Thank you, Mr. Visclosky.
    Batting cleanup for this panel, Mr. Fleischmann.
    Mr. Fleischmann. Thank you, Mr. Chairman. And if I may, I 
have got some questions. I do not mean to beat a dead horse or 
a dead mountain, but I hope that someday there is a potential 
to really look at the Yucca facility because my colleague from 
Indiana is right. We spent a lot of money. We have done a lot 
of research and I know there are other considerations out 
there, but it is my fervent hope that someday we can maybe look 
at that as a resource.
    I wanted to follow up with some questions, if I may, about 
the reprocessing, Mr. Secretary. Are there other considerations 
that would impact the storage of the remaining waste if a 
modified or closed cycle is to be a future option?
    Mr. Lyons. Well, thank you for the question, Mr. 
Fleischmann. And indeed, there have been already some very 
interesting studies on the question of how reprocessing might 
impact the current used fuel inventory within the country. Oak 
Ridge led an excellent study which evaluated whether--if 
reprocessing were available today, whether it would make sense 
for the bulk of the existing inventory. And the outcome of that 
study, which I think has been very well documented, was that 
given the range of different types of fuel that are currently 
in the inventory, that it really makes very little sense to 
look backwards and ask about a reprocessing. It may make sense, 
since we are now standardizing on fuel types, to look forward 
with reprocessing. And that goes back to my answer earlier that 
I think a question or a decision on whether we eventually move 
to a closed cycle with full reprocessing will be based on many 
factors, including economics, including nonproliferation, 
including environmental considerations. And that will be an 
important future decision.
    Mr. Fleischmann. If I may follow up then, Mr. Secretary, 
given the state of the uranium market, is the ability to 
retrieve waste at a later date necessary any longer as a 
technical consideration?
    Mr. Lyons. There certainly have been suggestions in the 
past, Mr. Fleischmann, that we would be running out of uranium 
and that that was a driver for reprocessing. MIT has done a 
number of studies saying, ``No, we are not running out of 
uranium. We certainly have enough for 100 years.'' But there is 
also a new program that we have begun--it happens also to be 
led through Oak Ridge--is looking at the extraction of uranium 
from seawater. And while that may sound funny when you first 
hear it, it is not funny. And the work at Oak Ridge is already 
to the point of suggesting that we could obtain uranium 
resources from the ocean, perhaps a factor of four or five more 
costly today than mined uranium. But Oak Ridge has already 
reduced that cost by at least a factor of four to five in just 
two years of work. I do not know where this work will end up 
but it is at least, I think, beyond argument that the supply of 
uranium in seawater is inexhaustible and that we are at least 
closing in on the possibility of demonstrating that it can be 
economically utilized. So I do not see a limitation on uranium 
resources essentially ever.
    Mr. Fleischmann. Mr. Secretary, I wanted to thank you. I 
was actually at Oak Ridge a couple of weeks ago, and I think 
this is the old Japanese technology I think that has been out 
there for quite some time that we are trying to improve on at 
Oak Ridge. Is that what you were alluding to, sir?
    Mr. Lyons. Yes, sir. But I think Oak Ridge should take 
credit for very substantial improvements over the Japanese 
technology of at least a factor of four in the first two years 
of work.
    Mr. Fleischmann. Excellent.
    Mr. Lyons. And they have many more good ideas.
    Mr. Fleischmann. Excellent. And I would agree with that.
    Mr. Weber, how would the NRC's licensing process be 
different than current and past siting processes if it were to 
be part of a consent-based process as proposed by the 
Department of Energy?
    Mr. Weber. From the Nuclear Regulatory Commission's 
perspective, we think we could easily include a consent-based 
process. Our agency is open, transparent. We encourage 
stakeholder cooperation, engagement. The fact that we would 
have a potential applicant that would already have the consent 
of the local, state, regional level would only be a plus in 
terms of our regulatory process.
    Mr. Fleischmann. Thank you.
    Mr. Chairman, I yield back.
    Mr. Frelinghuysen. Thank you, Mr. Fleischmann.
    Ms. Kaptur for a brief comment and then we are going to 
conclude this panel.
    Ms. Kaptur. Thank you, Mr. Chairman.
    I wanted to follow on Congressman Visclosky's really 
excellent summary about the amounts of dollars we are spending 
as a country. And I would have to comment that, you know, there 
are very few Americans or human beings really that have your 
experience. You are really very precious to our country, and we 
have a challenge that is unmet. Whether or not we ever build 
another nuclear facility in this country, or another nuclear 
weapon, we have this challenge of spent fuel. And we really are 
not meeting it.
    And as I have listened to your testimony and read the 
related materials, a phrase keeps coming to mind and that is 
fear of the unknown. And I think whether it is Yucca Mountain 
or whether it is some other corner of our 50 states or 
territories, as we expend these dollars and really get very 
little for it in terms of actual storage, it seems to me that 
there is a larger problem that is outside of science, and it is 
how the general public perceives the nuclear-spent fuel. And we 
are not spending any money at explaining how does the average 
citizen get their mind around this? If I were to, I mean, 
sadly, because of Fukushima, Three Mile Island in our own 
country, and other situations, the public has a great fear of 
the unknown.
    And our challenge is a greater one than just developing a 
site. It is trying to provide the storage that is necessary. 
But so few people have any experience. Most never take physics. 
Those of us that did struggled through it; some excelled. But 
even with that knowledge, the average citizen has absolutely no 
grounds on which to alleviate some of the fear of the unknown. 
People are reacting to a fear and a concern, and I do not feel 
we as a country have done a very good job of delving into that. 
And I do not think until we do, and we are able to explain what 
you are attempting to do, will we be successful. Maybe there is 
some place in New Jersey that wants the storage if we do not do 
it at Yucca Mountain.
    Mr. Frelinghuysen. Thank you very much. I do not think we 
do.
    Ms. Kaptur. You do not think you do. Well, you see, so I am 
trying to--I mean, basic questions, Doctor. For example, if I 
were to say to you to explain to the average citizen in the 
district that I represent how much of this accumulated stuff is 
there across the country? How many football fields will we fill 
up? I do not know the answer to that. Maybe Mr. Visclosky does. 
He sat in this position much longer than I have.
    And then is this thing throbbing with all this energy that 
is going to run over into my backyard? There has to be a way of 
explaining this, and until we do, I do not believe we will be 
successful as a country. And that is a political challenge and 
an educational challenge. Yes, sir.
    Mr. Lyons. Can I respond very briefly? Those are superb 
comments, Ms. Kaptur.
    As far as how many football fields, one football field of 
the order of 12 feet deep would take care of all the waste.
    Your comment on fear of the unknown I think is very, very 
perceptive. And let me expand on that. With the examples that 
at least two of the communities that have come forth and 
expressed an interest in moving ahead on a consent basis, our 
communities that already have substantial experience with 
different types of rad waste and nuclear processes, I am sure 
it is well known that the so-called Eddy-Lea alliance, two 
counties in New Mexico around the WIPP facility have come 
forward, purchased land, said they are interested in moving 
ahead on a consent-base process, and intend to apply to the NRC 
for a license. One of the counties in Texas, Loving County, has 
recently passed a resolution saying--and that is in the same 
general area, right close to the low level waste facility in 
Andrews, Texas, that they want to compete on a consent basis 
for storage facilities.
    To me, these are examples of exactly what you are saying. 
These are communities that already have substantial education 
and considerable knowledge of what it takes to be involved with 
nuclear processes. The care that is required and the safety 
that accrues with that care and with the detailed 
understanding.
    So I think those are two examples of the point you are 
making that are communities that have this knowledge are 
interested.
    Ms. Kaptur. Doctor, could you tell me in both of those 
places are there military facilities, defense-related 
facilities adjacent to them or not?
    Mr. Lyons. Well, WIPP at Carlsbad accepts defense waste and 
Loving County, which I could not tell you exactly where it is 
but it is more or less right across the border from WIPP. So I 
think it is fair to say both have that knowledge.
    Ms. Kaptur. Thank you.
    Mr. Frelinghuysen. Thank you, Ms. Kaptur. Gentlemen, thank 
you very much for your testimony. I appreciate your being here.
    The next panel, front and center. Thank you very much.
    Welcome witnesses. Mr. Frank Rusco, Director of Natural 
Resources and Environment Energy and Science for the Government 
Accountability Office. Again, Ms. Susan Eisenhower, former 
member of the Blue Ribbon Commission on America's Nuclear 
Future. And thirdly, Dr. Rodney Ewing, chairman of the Nuclear 
Waste Technical Review Board. Thank you all for your patience. 
It must have been, I will not say, agonizing to be in the 
audience for this length of time and not be able to get your 
oar in the water; now you have this opportunity. So we very 
much appreciate your time and your patience.
    Mr. Rusco. Good morning. Thank you for being here.
    Mr. Rusco. Chairman Frelinghuysen, Ranking Member Kaptur, 
distinguished members of the Subcommittee, thank you for the 
opportunity to discuss GAO's work assessing key attributes and 
challenges associated with the storage or disposal of 
commercial spent nuclear fuel and other nuclear waste.
    As you know, the Nuclear Waste Policy Act of 1982 directed 
the Department of Energy to investigate sites for a federal 
deep geologic repository to dispose of both civilian and 
defense-related spent nuclear fuel and other high-level nuclear 
waste. DOE studied several sites throughout the country, and in 
May 1986, the Secretary of Energy recommended three candidate 
sites for further consideration, including Yucca Mountain, 
Nevada.
    In 1987, Congress amended the Act to direct DOE to focus 
its efforts only on Yucca Mountain, a site about 100 miles 
northwest of Las Vegas. Since 1983, DOE has spent about $15 
billion on the effort to site a permanent nuclear waste 
repository, most of this focused on Yucca Mountain. Despite 
this effort, DOE was unable to take custody of commercial spent 
nuclear fuel in 1998 as required under the NWPA. In 2008, DOE 
filed a license application with the Nuclear Regulatory 
Commission for construction of a permanent repository at Yucca 
Mountain. Then in 2009, DOE took steps to terminate the Yucca 
Mountain Repository program.
    Instead, DOE established the Blue Ribbon Commission on 
America's Nuclear Future to valuate nuclear waste management 
approaches, and the Commission consulted with GAO and used some 
of our prior work in their analysis and deliberations.
    In January 2012, the Blue Ribbon Commission recommended a 
strategy for managing nuclear waste that included a new 
consent-based approach to siting future nuclear waste 
management facilities. A new organization other than DOE 
dedicated solely to the mission of nuclear waste management and 
empowered with the authority and funding needed to succeed and 
prompted new efforts to develop both an interim storage 
facility and a permanent disposal site.
    One year later, in January 2013, DOE issued a strategy for 
managing spent nuclear fuel that endorsed the Commissions' 
recommendations. In addition to agreeing to a consent-based 
approach and calling for legislation to create a third party to 
manage spent nuclear fuel, DOE's strategy calls for the 
development of a pilot interim storage facility by 2021, a 
larger, long-term interim facility by 2025, and a permanent 
geologic repository for disposal by 2048.
    This strategy does not, however, contain details of how and 
where such facilities could be sited or the assumptions used to 
estimate the specific timelines.
    Based on GAO's past work evaluating DOE's efforts to manage 
commercial spent nuclear fuel and other nuclear waste, there 
are key lessons learned that will likely decide the success or 
failure of any approach to this problem. First, overcoming 
social and political opposition is crucial. Building social and 
political support for a specific plan will require a 
transparent process for evaluating a site. Educating the public 
about what is being planned and how it will work, and providing 
appropriate economic incentives for affected parties to engage 
in the process.
    Second, it is essential to have consistent policy funding 
and project leadership over the long period of time it takes to 
identify, evaluate, and build a storage or disposal facility. 
DOE's efforts to garner social and political support for siting 
a permanent nuclear waste repository at Yucca Mountain were 
hurt by a lack of transparency. Specifically, a DOE expert 
panel in 1984 found that DOE's credibility was damaged in its 
initial site selection efforts because its site selection 
guidelines were criticized as being superficial and vague. 
DOE's credibility also suffered because of a lack of 
consistency in policy and leadership that caused delays in the 
project.
    Finally, DOE's termination of Yucca Mountain after over two 
decades of consideration and the expense of billions of dollars 
further hurt DOE's credibility and may ultimately harm the 
agency's ability to find communities and states willing to host 
either an interim storage facility or a permanent repository 
for commercial spent nuclear fuel and other nuclear waste.
    Regardless of what path is taken for the storage and 
disposal of nuclear waste, getting public and political 
consensus will be the greatest challenge. DOE or whatever body 
leads this effort must learn from past missteps if we are to 
avoid further delays and fruitless expense. The stakes are high 
and include both public health and security concerns, as well 
as the future of nuclear power as a source of electricity in 
the United States.
    This ends my opening statement. I will be happy to answer 
any questions you may have.
    [The statement of Mr. Rusco follows:]

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    Mr. Frelinghuysen. Thank you very much.
    Ms. Eisenhower.
    Ms. Eisenhower. Chairman Frelinghuysen, Ranking Member 
Kaptur, distinguished members of the Subcommittee, it is a 
pleasure to appear before you today to discuss nuclear waste 
programs and strategies. I believe our nation must craft a 
sustainable solution to the nuclear waste management issue.
    May I say on a personal note that I share your frustration 
about the expenditure of public money in this area, and that 
was one of the reasons I agreed to become a member of the Blue 
Ribbon Commission. Our charge was to conduct a comprehensive 
review of our nation's nuclear waste policy. In our final 
report we made eight key integrated recommendations, including 
the establishment of a Fed Corp with rigorous congressional 
oversight to assume the responsibilities for the backend of the 
nuclear fuel cycle. In short, it would be a fresh start.
    On the direction of the Secretary of Energy, we were not a 
siting body, so we did not evaluate any specific aspect of 
Yucca Mountain or any other location as a potential host for a 
storage or disposal facility. Rather, our mission was 
strategic; to propose changes to our waste management system 
that could break the current impasse. Our consent-based 
approach--and I would really like to emphasize this--neither 
includes or excludes Yucca Mountain. And can and should be 
applied regardless of what sites are ultimately chosen for 
long-term nuclear waste management, for soon we will need more 
than one site to legally handle the disposition of spent 
nuclear fuel.
    A main focus of our policy recommendation was ``prompt 
efforts to develop one or more geological disposal 
facilities.'' As a complement to a repository, we also urged 
``prompt efforts to develop one or more consolidated storage 
facilities.'' The arguments in favor of moving quickly on 
consolidated storage are strongest for stranded spent fuel from 
shutdown plant sites. There were nine such sites when we 
completed our report, and there have been other announcements 
and closures are forthcoming.
    Consolidated storage will provide valuable flexibility and 
redundancy in the nuclear waste management system, while 
realizing cost savings and giving future decision makers 
greater choices as among other things technology advances.
    The Obama administration's January 2013 strategy for 
nuclear waste management embraces the spirit of the 
Commission's recommendations. The administration's projected 
timeframe for establishing consolidated storage capability is 
generally consistent with the Commission's findings, though the 
administration projects development of a repository will take a 
decade plus longer than what the Commission thought would be 
necessary.
    As we pointed out in our report, work towards a 
consolidated storage facility can begin immediately under the 
existing provisions of the Nuclear Waste Policy Act. According 
to a legal analysis performed for the BRC, which I would like 
to submit for the record, further legislative action would not 
be required prior to the designation of the storage site, at 
which time Congress would need to amend the act to allow 
construction to go forward independent of the status of a 
permanent repository.
    As with developing a disposal capability, the critical 
challenge for consolidated storage will be finding a site or 
sites. As part of a consent-based approach, we must undertake 
renewed effort to communicate broadly about the benefits and 
risks associated with long-term management of spent fuel and 
high-level waste. Time and time again during the Commission 
hearings we heard people expressing deep concern about the 
transport of spent fuel, and I was personally impressed by the 
safety record that exists in this field. The safety of 
transportation of radioactive waste actually has a long and 
rather remarkable safety history.
    According to the American Nuclear Society, over the past 40 
years, about 3,000 shipments of spent nuclear fuel have 
navigated more than 1.7 million miles of roads and railways. Of 
all this travel, no radioactive materials have been released to 
contaminate the environment as a result of an accident. And I 
think part of the reason for that may be because every ton of 
used fuel that is shipped is encased in about four tons of 
protective shielding.
    Anyway, an effective outreach program can help point out 
these things and can help build public confidence that spent 
fuel and high-level radioactive waste can be safely shipped, 
stored, and disposed of in the United States.
    Finally, any robust and well managed waste program needs 
access to funds that the nuclear utility rate payers are 
already providing for the purpose of nuclear waste management. 
If the status quo continues, the parallel storage and disposal 
programs we recommended could be in competition with each other 
for limited funds instead of being mutually supportive. A 
consent-based setting system will also depend on providing 
assurances to the host communities that a storage facility or 
repository is part of a reliable well-managed program. This 
could be undermined if financial resources are not assured.
    In closing, let me thank you very, very much for letting me 
have this opportunity. And I reaffirm my own commitment to work 
with the Subcommittee in any way I can to move this to a path 
towards success. Thank you.
    [The statement of Ms. Eisenhower follows:]

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    Mr. Frelinghuysen. Ms. Eisenhower thank you very much for 
your testimony.
    Dr. Rodney Ewing. Good morning.
    Dr. Ewing. Chairman Frelinghuysen, Ranking Member Kaptur, 
and distinguished members of the Subcommittee, good morning.
    Mr. Frelinghuysen. I suggest you move your mic up a little 
closer to you so we can hear you. Thank you.
    Dr. Ewing. Thank you.
    Thank you for inviting me on behalf of the Board to comment 
on these important issues from the Board's technical 
perspective.
    My full statement has been submitted for the hearing 
record. During the time that I have allotted, I will briefly 
discuss some of the important points from the written 
statement.
    First and most important is to affirm that there is a broad 
scientific and engineering consensus that a deep mined geologic 
repository is an appropriate and safe method for the isolation 
of spent nuclear fuel and high-level radioactive waste from the 
environment.
    Internationally, deep mined geologic disposal is the policy 
of most countries. Further, a geologic repository will be 
needed for high activity waste disposal in the U.S. for any 
realistically envisioned future fuel cycle.
    Therefore, the top priority for us all is to get the U.S. 
on a path towards geologic disposal.
    Site selection and characterization will take substantial 
scientific and engineering effort. In parallel, however, there 
also must be a strong and continuing engagement with the 
affected public, including local communities, the state, and 
Native American tribes.
    The challenge of the consent-based process is to blend the 
scientific and engineering requirements with continuous public 
engagement. In the U.S., the path to achieving this goal 
remains to be defined.
    A detailed look at international experience with consent-
based programs as compiled in the Board's Experience Gained 
Report of 2011 presents a nuanced picture of successes and 
failures in this endeavor. It is clear that the simple label, 
consent-based, does not in and of itself ensure success. 
Certainly, culture and government structure also play an 
important role, and to the extent that these are not the same 
as in the U.S., then the lessons from abroad may not be applied 
directly here in the United States.
    Still, some common themes emerge from the experience of 
nuclear waste disposal programs around the world and in the 
U.S., and from my perspective, some of the most important of 
these are: first, there should be full engagement of the 
affected parties, and this engagement takes time and requires 
program continuity. And most importantly, program credibility.
    Second, there should be a well articulated technical basis 
for the selection of the site and the design of a repository. 
And finally, the basis and strategy of the case for safety must 
be accessible to the broader technical community as well as the 
public, particularly the affected public.
    Perhaps the most relevant and useful experience for the 
United States is that of the Waste Isolation Pilot Plant in 
southeastern New Mexico, which is the only operating deep mined 
geologic repository in the world. Transuranic radioactive waste 
generated by defense programs is disposed of at WIPP. I served 
as a member of a committee of the National Research Council 
from 1984 to 1996 that continuously reviewed the WIPP project, 
and I lived in New Mexico through the process. So I had a front 
row seat from which to watch the evolution of the WIPP project.
    In my view, many factors contributed to the successful 
opening of the WIPP facility, but some of the important factors 
include: there was a continuous independent, senior level 
scientific and engineering review in a public forum provided by 
the National Academy of Sciences through the National Research 
Council's WIPP Committee. This was one of the longest standing 
committees in academy history. Typically, open meetings were 
held twice a year, many of them in New Mexico. Members of the 
Committee had time to develop a detailed understanding of the 
project, and in some cases their involvement was longer than 
some of the program managers.
    There was continuous technical review by the state of New 
Mexico. The Environmental Evaluation Group of the state was a 
constant reviewer of technical issues, many of which were 
presented then to the academy committee, again in a public 
forum. The local community of Carlsbad was very involved, not 
only as proponents for WIPP, but also as serious and critical 
observers of the DOE program. Nongovernment organizations were 
very active, providing both a technical and political 
perspective.
    There was continuity in the repository program. Some 
scientists and engineers spent a major part of their careers 
working on WIPP or related projects, and the chief scientist 
for 25 years, Wendell Weart, was an articulate spokesman for 
the project and interacted effectively with technical audiences 
as well as the public.
    Finally, there were differences between the WIPP in New 
Mexico and the Yucca Mountain projects in the regulatory 
approach. EPA is the regulator for WIPP, while the NRC is the 
regulator for the YUCCA Mountain project. I suggest that the 
impact of these differences should be examined as we go 
forward. One important point in this regard is that the 
regulatory period for WIPP is 10,000 years, while that of Yucca 
Mountain is one million years.
    In summary, an important lesson from WIPP and international 
programs is that ongoing transparent, technical review and 
oversight is crucial to success and crucial to the consent-
based process.
    I would be pleased to answer any questions.
    [The statement of Dr. Ewing follows:]

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    Mr. Frelinghuysen. Thank you, Dr. Ewing, for your 
testimony.
    Mr. Rusco, there seemed to be quite a discrepancy between 
your ballpark figure of $15 billion and that of Mr. Lyons, who 
obviously we have deep respect for, but why such a gap here?
    Mr. Rusco. I think it is really quite simple. Well, the 
main difference is that we are looking at dollars in today's 
terms, so you know, we are adjusting for inflation. A billion 
dollars 20 years ago is worth more than a billion dollars 
today.
    Mr. Frelinghuysen. So you are basing the $15 billion on an 
inflationary factor?
    Mr. Rusco. Yeah.
    Mr. Frelinghuysen. You are not basing it on all the 
accounting that you have done relative to the costs?
    Mr. Rusco. We added up all the costs over time. And we just 
adjusted it to today's dollars.
    Mr. Frelinghuysen. To both you, Ms. Eisenhower, and Mr. 
Rusco, this issue of consent-based. At one point in time the 
Yucca site was consent-based. There was a host community that 
agreed. Is that not accurate?
    Mr. Rusco. That is correct. There was some agreement in the 
small community there about that. Yes.
    Mr. Frelinghuysen. Yeah. There was some agreement.
    Mr. Simpson raised a question earlier on what does interim 
storage buy us? I would like to know what your opinion is here. 
What does it buy us?
    Ms. Eisenhower. Well, thank you. First of all----
    Mr. Frelinghuysen. How does it really help the situation 
given the fact that we obviously have a potential use of 
something? But where are we going with interim storage?
    Ms. Eisenhower. Yes. Thank you. If you would allow me also 
just to add one thing to the consent-based.
    Mr. Frelinghuysen. Jump in.
    Ms. Eisenhower. One of the things that I thought was 
absolutely riveting in the Commission sessions was the 
eagerness of the community around Yucca Mountain to see that 
project go forward. But what we discovered was what somebody 
referred to as the donut effect, which is the local community 
could be highly in favor of this but the state is against it. 
And I think this is going to be a very big issue for 
resolution, which is one of the reasons I emphasized the 
transportation thing so much in my comments because that 
seemed----
    Mr. Frelinghuysen. Las Vegas did not want to have trucks 
rolling through. I mean, let us be----
    Ms. Eisenhower. Exactly. But that is why a fact-based 
approach to looking at the transportation is important.
    With respect to your other question--I am sorry. Could you 
just----
    Mr. Frelinghuysen. What does interim storage buy?
    Ms. Eisenhower. Yes. Interim storage. I think, first of 
all, interim storage offers a lot. It offers a kind of 
flexibility. As we have already described, it will take some 
time, not only to site more than one permanent repository, but 
we are also under pressure because the federal government has 
an obligation to move the waste from these reactor sites and it 
gives us an opportunity to accomplish the first step. Our 
commission visited Sweden. It is probably one of the most 
exciting projects in the world for this project. They had a 
multi-tiered system. They moved everything into consolidated 
storage and then the next step was the building of a repository 
which they have now done. So it is part of a phased project.
    At the same time, I would offer it as a kind of flexibility 
for seeing where the technology and other issues go. It could 
be at some point that various estimates or various energy 
challenges we may face, may not pan out over time. We may want 
to look at the use of reprocessing or recycling spent fuel, 
depending on what technology is available. So it gives us all 
kinds of flexibility both with respect to building a long-term 
permanent repository and also having the flexibility to make 
changes and arrangements as we go through this multi-tiered 
process.
    Mr. Frelinghuysen. Well, thank you.
    Interestingly enough, Mr. Rusco, maybe you know this. The 
Department of Energy's Office of Civilian Radioactive Waste 
Management estimated in 2008 that the cost of transporting 
spent fuel to Yucca would be more than $19 billion. If you have 
interim storage you could double that cost.
    Mr. Rusco. I think that is one of the big challenges. There 
are a couple big challenges of interim storage, and the first, 
of course, is just, you know, can you build it? And how long 
will it take?
    Mr. Frelinghuysen. It is a little difficult to justify 
spending that much money, even though they appear to have an 
impeccable record of moving things.
    Mr. Rusco. Exactly.
    Mr. Frelinghuysen. That is a lot of money.
    Mr. Rusco. And then moving it essentially twice. If they 
were not co-located you are moving it twice and that does----
    Mr. Frelinghuysen. And lastly, before I go to Ms. Kaptur, 
Dr. Ewing, did your group find any technical issues with Yucca? 
Was Yucca an appropriate site? I know you have somewhat 
endorsed backhandedly the WIPP site, but I am just wondering--
--
    Dr. Ewing. And I did not mean to do that. That was an 
example.
    Mr. Frelinghuysen. Well, I know that but you went on at 
some length and I--we are sympathetic to that.
    Dr. Ewing. Okay. A relevant example.
    Mr. Frelinghuysen. Yeah.
    Dr. Ewing. The Board in 2002, reviewed in detail the 
technical basis for the DOE's work in support of the 
anticipated license application. And just to quote from their 
report, at that time they said, ``At this point, no individual 
technical or scientific factor has been identified that would 
automatically eliminate Yucca Mountain for consideration as a 
site for a permanent repository.''
    Mr. Frelinghuysen. So you stand by that?
    Dr. Ewing. I think that is true. I also would point out 
that in their review of the work they ranked the quality of the 
work supporting the technical basis as weak to moderate at that 
time. And so there are still issues to argue about.
    Mr. Frelinghuysen. Weak to moderate but an investment in 
time and taxpayer money.
    Dr. Ewing. Right. Certainly.
    Mr. Frelinghuysen. But you do not have any technical issues 
relative to----
    Dr. Ewing. No, sir.
    Mr. Frelinghuysen. Okay. Ms. Kaptur.
    Ms. Kaptur. Thank you, Mr. Chairman, and thank this 
excellent panel for your work.
    Mr. Rusco and Dr. Ewing, in reading between the lines of 
your testimony, I am thinking about the manner in which the 
Department of Energy functions, versus the Environmental 
Protection Agency, in kind of a time warp in a way that seems 
to have affected this project in my mind. Going back to the 
'70s and '80s, agency departmental behavior changed with the 
development of the Environmental Protection Agency. More open 
hearings, more consultation back and forth. It sounds like 
going back to when this started, the consultation was very 
minimal, decisions were made internally according to what you 
said, Dr. Rusco, or Mr. Rusco, if I am correct in your 
testimony. Doctor, you talked about the behavior and the 
consultation that would go on with stakeholders adjacent or 
within the state in which this might exist.
    Could you discuss a little bit more the change in 
departmental behavior, NRC, EPA, Energy, since the '70s up to 
the point we are now and the fact that part of what happens 
here appears to me to be a change in the way that we make 
public decisions as affects the environment and the public's 
engagement in that over 40 years. Was there a much more 
internal set of decisions made? Mr. Rusco, you pretty much said 
that.
    Mr. Rusco. Definitely, the panel that DOE formed, expert 
panel to evaluate their process found that they lacked 
transparency and they had been accused of having basically 
vague criteria for their initial selections. And these kinds of 
issues can snowball, especially, you know, there was local 
support and community support for this project. There turned 
out to not be state support. We cannot go back and look and see 
what would have happened had there been a more open process, 
but a more open process is obviously going to be necessary 
going forward. You have to educate people about what you are 
doing and convince them that it is okay or else, you know, you 
will not find the support.
    Ms. Kaptur. Dr. Ewing, do you have a comment?
    Dr. Ewing. So my experience with WIPP came before I had any 
experience for Yucca Mountain, so I had a naive feeling that 
this is the way it is always done. I think with the EPA as a 
regulator, and the EPA became a regulator with the Land 
Withdrawal Act, so it was part of a grand bargain of how we put 
together regulation and oversight. The state's environmental 
evaluation group was created at the same time. And one of the 
characteristics I think of that time was that there was open 
discussion back and forth. The EPA had a lot of experience 
dealing with environmental problems, realized the difficulties 
of long-term predictions, and was willing to consider 
variations on a theme, that is safe disposal, that taken 
together would ensure the safety of the site. As time has 
passed, I think our regulatory framework, in my personal view, 
has become very prescriptive. And so we have lost the ability 
to negotiate back and forth about appropriate solutions to very 
difficult problems.
    Also, I would have to say this was in the time of Senator 
Domenici, a towering figure in the discussions, and so that 
drove all parties to I would say civilized behavior and moving 
forward. So.
    Ms. Kaptur. Thank you. Thank you for those comments.
    I, in the prior round, had asked a question about whether 
the sites being evaluated now were near any military 
facilities. Both the chairman, myself, and our ranking on 
Defense Approps, Mr. Visclosky, all of us have served on 
Defense for a long time. And my own view is that just because 
of the development of global conditions, the domestic concerns 
about nuclear spent fuel, that the closer we can locate to a 
military facility to give the public security, the better we 
are. And I am not saying it has to be on a base, but I am 
saying it is an additive factor. And I, unlike Mr. Visclosky, 
have not visited all possible sites. But all I am saying, 
knowing the public perception in trying to give confidence, it 
would seem to me that that would be worthy pursuit to solve 
this for the country. And it would be helpful.
    I know that this is not directly related to what we are 
talking about here, but in terms of the difficulties that some 
of our commercial nuclear power plants have had, I have been 
very public in my own state about encouraging disciplined 
management at the level of the nuclear navy in order to get 
rigor and better management of facilities that have been 
heavily fined for a lack of disciplined management. And what 
has been interesting over the years, and I think one of my 
greatest accomplishments on the energy side as a member, has 
resulted in a job path for personnel from the nuclear navy 
going into the commercial nuclear industry. And I am now 
finding very excellent people in our commercial companies. And 
I thought, well, that is good. That is different. It is a good 
development for the country and for better management of 
plants. So when I look at this I say to myself, hmm, I think we 
need to be thinking not just at a Department of Energy and NRC-
regulated facility, but we need to be thinking about a 
discipline giving the public confidence that this will work and 
they have nothing to fear. Thank you.
    Mr. Frelinghuysen. Mr. Simpson.
    Mr. Simpson. Thank you, Mr. Chairman. Thank you, Susan, for 
taking the time to serve on the BRC. I know that was a very 
time-consuming effort, and I suspect it probably did not pay a 
whole lot.
    Ms. Eisenhower. No.
    Mr. Simpson. But let us all face it. The problem with Yucca 
Mountain is not technical. It is political. That is just the 
reality. It is what it is, and it is what we are going to have 
to deal with. But I find this question of consent-based siting 
very interesting. You described it as a donut hole, and that is 
exactly right. And I think, Dr. Ewing, your description of what 
happened at WIPP is kind of rosy compared to the difficulty we 
had of opening WIPP. I have had county commissioners around 
Yucca Mountain come in that support it and would like to see it 
move forward. Obviously, the state of Nevada has a problem. In 
Carlsbad, New Mexico, when they were proposing that, I remember 
there was a young attorney general named Tom Udall, who was 
suing the state of New Mexico to try to prevent the opening of 
WIPP. And now you see Carlsbad. The residents of Carlsbad are 
very interested in potentially taking on an interim storage 
facility. I think Savannah River maybe put a proposal out 
there. It is not out of the goodness of their heart. They want 
something. And what they want is economic development, the jobs 
that it brings, and they want us to pay them for it. I think 
Savannah River's latest proposal says if we do an interim 
storage facility in Savannah River, we have to move all of the 
fuel cycle research to Savannah River. That is beautiful. So we 
just close down the INL and some other places, but that is 
going to create some real hassles. That is the type of bidding 
we are into because I do not know that you are going to find 
some place where the whole level of government--local 
government, state government--is going to say, yeah, bring it 
here.
    What are your thoughts on that?
    Dr. Ewing. May I respond?
    Mr. Simpson. Yeah.
    Mr. Frelinghuysen. Equal time.
    Dr. Ewing. Right. First, I want to be sure to say I did not 
mean to paint a rosy picture, but I did pick out the positive 
highlights. In fact, it took a long time, and in New Mexico 
there was a donut effect. Northern New Mexico was strenuously 
against opening WIPP. But over time, with the external 
oversight and constant discussion, the state fell into line on 
this. And I note there is a huge, expensive bypass around the 
city of Santa Fe that was the result of these discussions. And 
the waste moves around Santa Fe, not through Santa Fe.
    Mr. Simpson. Well, let me ask you as you are answering 
that, what do you think the reaction would be in New Mexico now 
if they decided that they wanted to expand WIPP to be a 
permanent repository, to put high-level waste there?
    Dr. Ewing. You would be at the beginning of another long 
journey. And the first issue would be that the state accepted 
WIPP, the opening of WIPP, with the understanding that it would 
not be a repository for spent fuel and high-level waste. So 
that would be a serious barrier.
    Mr. Visclosky. I am sorry, what did you just say?
    Dr. Ewing. The opening of WIPP, you know, the state 
agreeing to this was--part of that agreement is that WIPP would 
not be used for spent nuclear fuel or high-level waste.
    Mr. Simpson. The thing I hear most from every community I 
talk to that is interested in it is that they do not trust the 
federal government to make interim storage interim, because in 
the long run they are going to say we got it solved; deal with 
it.
    Ms. Eisenhower. Maybe I could respond to that. That is one 
of the considerations that we discussed at length, and the 
reason for our concluding that a Fed Corp would be a good idea. 
You know, trust is a very delicate flower, and once it has been 
bruised it is extremely difficult to restore that. There have 
been some--we looked at a number of models for Fed Corps and, 
you know, obviously the composition of this might vary, but it 
would give the whole process a fresh start.
    To your point about there is not a reason that a community 
does it unless they have something they want, that is probably 
true, but it also has been the international experience. In 
Sweden there were significant economic concessions that came to 
the community that won the site selection. Even some economic 
benefits to those who put their names in the hat. But they have 
had a very successful program.
    You might also be interested to know that Canada has had a 
request for interest process underway up there and they finally 
had to, from what I understand today, close the series of 
requests because they had more than 21 possible applications. 
And they are a bit like this country.
    Mr. Simpson. Can we ship it to Canada?
    Ms. Eisenhower. Hey.
    Mr. Simpson. It could be a good headline.
    Ms. Eisenhower. There we go. Yeah.
    Mr. Simpson. Thank you.
    Mr. Frelinghuysen. Mr. Simpson always makes things lively 
here.
    Mr. Visclosky, see what you can do to add onto that.
    Mr. Visclosky. I will do my best, Mr. Chairman.
    Mr. Chairman, I would start out by again, acknowledging 
that I have a lot of respect for Dr. Lyons and Mr. Weber. They 
just happen to be sitting at the wrong place at the wrong time 
because I have been a member of this Subcommittee for a long 
period of time and I appreciate the second panel participating 
as well.
    Dr. Ewing, you, in your summary, I thought were very 
measured, but I thought you made a good point. You said to 
summarize, I would observe that not using a consent-based 
approach for repository siting can slow the process or lead to 
delay or failure. But using a consent-based process does not 
guarantee that a repository will be successfully sited, talking 
about the donut hole. I think that is a good point. Okay, you 
get a community, then you have a problem with the state.
    Having calmed down, and recognizing I cannot do anything 
about the last 26 years, but going forward we are talking about 
35 years. And potentially an average of $400 million a year 
going out the door. I certainly have a responsibility; we all 
do. What would be your recommendations--because there is a 
congressional failure here, too. What can we on this 
Subcommittee do? What should the Administration be thinking 
about doing to not use 2048 as a goal and not take 35 years to 
move this process along as far as consensual siting if that is 
what it takes, understanding that is not a sure thing, too, 
from Dr. Ewing's testimony, and I appreciate that.
    Do you have any thoughts as to how we can help move this 
along in a positive fashion; not a kind of vented?
    Ms. Eisenhower. Well, I would just like to very quickly go 
back to the importance----
    Mr. Visclosky. Ms. Eisenhower, are you a Michigan person as 
well? I know Dr. Ewing is.
    Ms. Eisenhower. I am sorry?
    Mr. Visclosky. Are you a Michigan person? University of 
Michigan person, too?
    Ms. Eisenhower. No, I am not.
    Dr. Ewing. That is still her opinion, I think.
    Mr. Visclosky. I notice a Notre Dame guy. I know he is 
fine.
    Mr. Frelinghuysen. Let us make sure that is struck from the 
record.
    Ms. Eisenhower. So I would like to say on the 2048 date, I 
am under the assumption that that is an outside figure. It is 
very hard to estimate how long this is going to take, but I 
think the reason the Blue Ribbon Commission was a little bit 
more optimistic is having studied the international situation, 
especially looking at countries that were a little bit more 
like the United States than say France, which has a much more 
centralized government, that if we gave it a fresh start, if we 
assure the access to the funds, that this could move along more 
quickly. Getting access to the funds is important. The $400 
million you are talking about that go out the door, actually, 
the rate payers have already paid that. So it is not coming out 
of the Federal Treasury, per se. I mean, this has been 
dedicated money. And I would like to point out that the 
polluter pays is the only--nuclear industry is the only energy 
source that actually pays for its disposal costs upfront. And 
so I think the public has a right to believe that those 
resources are going to be there. And if potential host 
communities believe that those resources are going to be there, 
too, we might be surprised by how many state and local 
communities come forward. Thank you.
    Dr. Ewing. Just to expand on the response, one of the 
values of the consent-based process, if that were to be the way 
we would move forward, is education. And if you look at the 
Canadian experience, in the late '80s they had a strong 
technical program that finally was deemed not to be acceptable. 
And so they started from scratch. And when they started over 
they focused on communication and education, and dealing very 
slowly and deliberately with the people who would be involved. 
And I must say at that time I was very skeptical because I 
thought, well, this is a scientific problem. Let us do the 
science and move on. But I have to observe now that they have 
over 20 communities who are interested in being candidates. And 
they go further. They have taken some communities off the list 
because of the geology or there are technical issues that do 
not allow them to go forward. So I think the consent-based 
process is--the leverage you need or the path forward that 
would involve educating the public, and that opens the range of 
possibilities.
    The other point I would make is in terms of thinking about 
legislation, the credibility of the organization charged with 
this duty is essential. And there I would look to Sweden and 
the SKB model. They have a single purpose. It is to dispose of 
waste. It is not to expand the nuclear power industry. It is 
not to deal with any other issue but disposing of waste. And 
they are rigorous in following those directions. It is small. 
SKB now has grown because they are actually doing something, so 
they have a little over 300 employees. And they have high 
technical competence. They contract all over the world. They 
get the world's experts. And they are doing it at a fraction--
doing their job at a fraction of what we would be spending 
annually.
    So I think if you have an organization dedicated to this 
purpose with high credibility that interacts well with the 
public, that is the foundation of success over the longer term.
    Mr. Visclosky. Thank you very much. Thank you, Mr. 
Chairman.
    Mr. Frelinghuysen. Mr. Nunnelee.
    Mr. Nunnelee. Thank you, Mr. Chairman.
    Mr. Simpson raised the issue of interim storage facilities. 
Of course, as you know, the current U.S. statute says that we 
do not establish interim facilities until a permanent 
repository is established. But the Administration's energy 
policy earlier this year seems inconsistent with that. So, are 
we not headed down the road that Mr. Simpson described where 
the interim facilities are actually going to become permanent?
    Ms. Eisenhower. First of all, that is sort of a judgment 
and I think it goes back to trust and confidence. There may be 
some kind of soft linkage eventually, but I think we do not 
have an overall strategy at the moment for how to think about 
this. That is what was so impressive about visiting other 
countries on our fact-finding trips--to see that they actually 
have a full-blown, well thought through strategy that comes in 
incremental steps. And, you know, I am not sitting on your 
panel. I am on the other side of the table here, so I am sure 
there are all kinds of considerations that go with providing at 
least some sort of linkage as a form of assurance. I do not 
know whether that is necessary, but I do think that to Dr. 
Ewing's point, that the right organization to carry this 
forward could make an enormous difference. An organization that 
knows how to inspire public confidence and that works hard at 
that.
    Let me also say that there are huge facilities that have 
grown up around those places in Sweden and in France; these 
places become kind of nuclear centers. And so there are huge 
incentives, even on a temporary basis, for these communities to 
be willing to be considered.
    Mr. Rusco. Could I just add a couple of points?
    Mr. Nunnelee. Sure.
    Mr. Rusco. With regard to WIPP, one of the reasons that 
WIPP ultimately succeeded is the state got concession from DOE 
on authority and, for example, the state has the authority to 
say no to any shipment if they do not think it is sourced 
correctly or it has--the right steps have been taken. And that 
gives the state then the confidence, you know, some of the 
confidence that they cannot become something that was not 
intended. And I think that that is critical. There has to be 
some mechanism, and it does not have to be that, but some 
mechanism to ensure that an interim facility will not become 
permanent. And that may require some different sphere of 
control.
    Mr. Nunnelee. I understand you do not sit on this panel. 
Those that sat on this panel before us did come up with a 
strategy. It is the law of the land. It is just not being 
followed. So when can we anticipate from the administration a 
strategy for temporary storage sites through 2048 or 2047 or 
2049? When will we have that strategy?
    Mr. Rusco. In our work we did some estimates of how much 
time it would take to build an interim facility. Now, this was 
under the assumption that we are going forward with Yucca and 
it did not take into account all the social, political, you 
know, potential for delay. But even without that and in those 
conditions we think 20 years is not an unreasonable amount of 
time to build an interim facility.
    Mr. Simpson. Will the gentleman yield?
    Mr. Nunnelee. Sure.
    Mr. Simpson. One of the other things that concerns me, 
frankly, is that when I asked the Department at one of our 
hearings if the Administration was going to put forth 
legislation to implement the recommendations of the BRC, they 
said no, they had no plans to put anything forward. And so is 
this another Simpson-Bowles Commission where they make 
recommendations and then we all just kind of wave at it? Or are 
they going to propose--and I know you are not all from the 
Administration, but it bothers me that the Administration is 
not taking the recommendations seriously. It is almost like it 
is a plan to not have to deal with Yucca Mountain. We have an 
alternative over here, but we are not going to push it forward. 
So that is a statement, not a question.
    Mr. Frelinghuysen. Mr. Nunnelee, Ms. Eisenhower I think 
wants to reply to you and Mr. Simpson if that is all right.
    Ms. Eisenhower. Well, I am not a lawyer so I am not going 
to try and give you an assessment of what is already a legal 
brief, but I would like to point out again that I have 
submitted for the record a memo from Van Ness Feldman that 
indicates that we could actually begin the process of a 
consolidated storage facility under the existing provisions of 
the Nuclear Waste Policy Act. And I just wanted to flag that 
for you. I hope that memo will be of some help to you.
    Mr. Simpson. Okay. Thank you. Thank you, Mr. Chair.
    Mr. Frelinghuysen. Batting cleanup as we approach high 
noon, Mr. Fleischmann. And then I believe Ms. Kaptur has a 
comment after you.
    Mr. Fleischmann.
    Mr. Fleischmann. Thank you, Mr. Chairman. I will be very 
brief.
    I really want to thank the panel so much. I am from 
Tennessee. I represent Oak Ridge and the Third District of 
Tennessee. And it is clear. It is clear that we have got this 
waste at these sites. It is sitting there. We have got to deal 
with it, and I really appreciate the fact that you all have 
stepped up to deal with it. And I share the sentiments of the 
Committee. I think they are concerned about the past and want a 
brighter future in this regard, and I certainly want to be part 
of that solution. So I will be brief.
    I want to ask one final question. We have touched on this, 
Ms. Eisenhower. Your testimony cites recent experiences in 
Spain, Finland, and Sweden as encouraging examples of consent-
based siting. Can you elaborate on those experiences? And then 
I will rest with that.
    Ms. Eisenhower. Yes. I tried to indicate some of the 
experiences by noting the developments in Canada and Sweden. I 
was particularly impressed by the Swedish model because as Dr. 
Ewing pointed out, there is a dedicated company called SKB, 
which is a Fed Corp for the Swedish government that essentially 
has this as its mission and absolutely nothing else. So I think 
that is very heartening. I gather that developments in Spain, 
though I did not visit there myself, look very promising.
    And then if you allow me just to add one other thought 
here. I think it is important for all of us to ask ourselves 
what are the alternatives. If we do not find some way to move 
forward, either--I mean, how are we going to know unless we try 
it. And if we do not move forward, we are going to end up 
accruing huge liabilities for the federal government and 
finding that we have these orphaned nuclear sites. I visited 
Maine Yankee. It is really stunning to see this perfectly 
beautiful piece of real estate no longer has a nuclear reactor 
but it has its dry cask storage out on a platform being guarded 
when actually it would benefit hugely from being in some kind 
of interim or consolidated storage.
    And so I think what is impressive just to round up my 
answer to your question is that these foreign governments have 
moved forward with some plan. We came to an impasse. We had a 
Blue Ribbon Commission. We put our hearts and souls into coming 
up with some ideas that we hope, you know, will at the very 
least create a vibrant debate about how we can move forward. 
But the alternatives, the status quo, I do not think is 
sustainable on any level.
    Mr. Fleischmann. Thank you. Thank you all.
    Mr. Frelinghuysen. Thank you, Mr. Fleischmann.
    Ms. Kaptur.
    Ms. Kaptur. Thank you, Mr. Chairman. I will be brief. On 
the last round I did not get a chance to ask Ms. Eisenhower a 
question but I really appreciate your testimony.
    Ms. Eisenhower. Thank you.
    Ms. Kaptur. And the idea of a separate organization to run 
this is appealing so long as our Committee maintains 
jurisdiction. And drive. Jurisdiction and drive.
    I did want to just place on the record because you get in 
different audiences, and if we look at the Department of 
Defense and the number of defense waste cleanup sites that we 
have, they are extraordinary. And there may be a confluence of 
interest between the Department of Energy and the Department of 
Defense if they would bother to map it where we would do a 
community a favor by cleaning up a defense site that is sitting 
out there somewhere. And also, it would become the new home for 
this spent fuel. I do not know where those might be but I have 
been absolutely astounded when I look at the maps relating to 
defense cleanup and what we are charged with as a country and 
proceeding along that path not at a quick enough pace for me.
    But I think that that is something to also consider as one 
looks at ways of solving this problem geographically. And there 
may be something there. There may not be. But I just put it out 
there for your thought as you get into different audiences and 
attempt to help us solve this national challenge. And thank you 
all very much for your testimony.
    Mr. Frelinghuysen. Thank you, Ms. Kaptur.
    Mr. Visclosky.
    Mr. Visclosky. Thank you, Mr. Chairman. I appreciate the 
forbearance.
    Just, I guess, a question on interim. Understanding that 
some people oppose interim storage on the theory it takes 
pressure off of permanent repository and I understand that. 
Looking forward in proceeding down this road, and I appreciate 
the legal opinion. One of the reasons I liked law school is you 
could give the wrong answer but great arguments. You would 
pass. You would not do well but you could get out of school. So 
people could have reasonable differing opinions.
    Again, as you put together a program going forward, how do 
you assuage that concern that, oh, here you go again and we are 
never going to get to permanent? How could you deal with that 
question? And if you do not have any ideas now, that is fine. 
You know where I live if you want to call any of us back.
    Ms. Eisenhower. I will just add to this, this is a 
description of the status quo. I mean, I think most Americans 
would agree that, you know, we are not moving forward at all on 
this. And if it is correct, and I do believe it is, that if 
people are fearful of the unknown, they are going to feel a lot 
better when we have some kind of consolidated storage facility 
on a temporary basis. Right now we have got spent fuel 
essentially stored in more than 104 places in the country. I 
think this will actually raise public confidence to let the 
public know that these are going to be in fewer sites. They are 
going to be well guarded. They are going to take some pressure 
off of communities that right now are not happy about, you 
know, the spent fuel pools and the dry cask storage that is 
sitting on site. So I think sometimes it is very hard to 
imagine the future on behalf of people who may not be as 
knowledgeable about this subject as you are. But I think 
everybody will agree that the status quo probably is not 
desirable at all.
    Mr. Visclosky. Thank you, Mr. Chairman.
    Mr. Frelinghuysen. All of us will agree to use your 
adjective that you are a very impressive panel. I want to thank 
you for your time and effort in being here today and sharing 
your knowledge and perspective with us. On behalf of the entire 
Committee, we thank you and we stand adjourned.

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                                         Wednesday, March 20, 2013.

              MAJOR CONSTRUCTION PROJECTS, FY 2014 BUDGET

                               WITNESSES

Panel 1:
BOB RAINES, ASSOCIATE ADMINISTRATOR, ACQUISITION AND PROJECT 
    MANAGEMENT, NATIONAL NUCLEAR SECURITY ADMINISTRATION
JACK SURASH, DEPUTY ASSISTANT SECRETARY, ACQUISITION AND PROJECT 
    MANAGEMENT, OFFICE OF ENVIRONMENTAL MANAGEMENT, DEPARTMENT OF 
    ENERGY
PAUL BOSCO, DIRECTOR, OFFICE OF ACQUISITION AND PROJECT MANAGEMENT, 
    DEPARTMENT OF ENERGY
Panel 2:
DAVE TRIMBLE, DIRECTOR, NATURAL RESOURCES AND ENVIRONMENT, GOVERNMENT 
    ACCOUNTABILITY OFFICE
MIKE FERGUSON, CHIEF OF COST ENGINEERING, HUNTINGTON DISTRICT, UNITED 
    STATES ARMY CORPS OF ENGINEERS
WILLIAM A. ECKROADE, PRINCIPAL DEPUTY CHIEF, OFFICE OF HEALTH, SAFETY 
    AND SECURITY, DEPARTMENT OF ENERGY
    Mr. Frelinghuysen. The hearing will come to order. Good 
morning, everyone. Thank you for being here.
    Let me extend to Mr. Nunnelee, who is not here, my thanks 
for him sitting in for me yesterday when we had a hearing when 
I could not be present.
    Today we have two panels before the Subcommittee to discuss 
the management of the Department of Energy's major construction 
projects that relate to our very important nuclear enterprise. 
For years, the Department of Energy has struggled to keep its 
contractor base, contractor-run projects within their cost, 
scope, and schedule estimates. This hearing will focus 
specifically on what reforms have been made and what else needs 
to be done to address the persistent problems the Department 
has had in managing its large nuclear projects.
    Specifically, we will discuss the root causes of 
performance issues associated with the Waste Treatment Plant in 
Washington State and the Salt Waste Processing Facility under 
the Environmental Management Program and the MOX Fuel 
Fabrication facility both at Savannah River in South Carolina 
and the Uranium Processing Facility in Tennessee under the 
responsibility of the National Nuclear Security Administration 
(NNSA). Three of these projects are now undergoing a cost and 
schedule re-estimate, what we call a baseline review, to 
account for further delays, and a fourth is being redesigned. 
So we are anticipating greater costs above the approximately 
$25 billion that has already been spent.
    In our first panel we have three individuals who have been 
at the center of the Department's efforts to reform how these 
projects are being managed. Mr. Paul Bosco is the Director of 
the Office of Acquisition and Project Management, which is the 
Department of Energy's central organization responsible for 
project management and cost estimating for the various program 
offices of the Department. Mr. Bob Raines is the Associate 
Administrator for Acquisition and Project Management for the 
National Nuclear Security Administration. Mr. Jack Surash is 
the Deputy Assistant Secretary for Acquisition and Project 
Management for the Environmental Management Program.
    I believe this is the first time for all of you to testify 
before the Subcommittee, and we welcome you. All, I may note, 
have some sort of a Navy background. I checked their resumes 
very closely. Many years in the trenches on behalf of our 
country in a variety of roles. So we are very grateful.
    In our second panel we will have Mr. Dave Trimble, Director 
of the National Resources and Environmental Group for the 
Government Accountability Office, aka GAO. Mr. Mike Ferguson, 
Chief of Cost Engineering for the Huntington District from the 
U.S. Army Corps of Engineers. And Mr. William Eckroade, 
Principal Deputy Chief of Operations for the Department of 
Energy's Office of Health, Safety, and Security.
    The GAO has focused extensively on the Department's project 
management and has made a number of recommendations to 
encourage the Department to adapt better practices. The U.S. 
Army Corps of Engineers has also provided assistance to both 
NNSA and EM for several years now and continues to serve as a 
resource for new ideas and models to complete projects more 
effectively. The Office of Health, Safety, and Security is an 
independent oversight organization within the Department of 
Energy. It has also provided EM and NNSA with a number of 
recommendations on how its major projects are being managed 
with an emphasis on ensuring these complex nuclear facilities 
will meet standards for quality and safety for the foreseeable 
future.
    We look forward to hearing from both of these panels on 
their recommendations that their organizations have made and 
how they will continue to work with the Department to improve 
project management.
    Please ensure that the hearing record, responses to the 
questions for the record, and any supporting information 
requested by the Subcommittee are delivered in final form to us 
no later than four weeks from the time you receive them. We 
also ask that if members have additional questions they would 
like to submit to the Subcommittee for the record they please 
do so by 5 p.m. tomorrow.
    With those opening comments I would like to yield to my 
ranking member, Ms. Kaptur, for any remarks she may wish to 
give. Ms. Kaptur.
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    Ms. Kaptur. Thank you, Mr. Chairman. Gentlemen, welcome.
    Today's hearing has been called to examine the Department 
of Energy's continued inability to manage major construction 
projects, an issue that has been an ongoing concern with this 
Subcommittee for a long time. I am deeply concerned by what I 
know of the cost overruns and schedule slips of the Department 
on its major construction projects. This year marks the 23rd 
consecutive year since 1990 that the Department of Energy's 
contract management has made the Government Accountability 
Office's High-Risk List for waste, fraud, and abuse. That is 
not a very good record.
    I understand that the Department has made some progress, 
and we are anxious to hear about it. In its last report, the 
GAO states that it will shift its focus of the high-risk 
designation to major construction projects with values of $750 
million or greater. Still, these immense projects warrant the 
most prudent management and keen oversight of precious taxpayer 
dollars. The NNSA and EM currently manage 10 major projects 
with combined estimated costs totaling as much as $65.7 
billion. When I look at the NNSA budget it pales by comparison 
to that figure alone. This is a significant sum by any measure, 
more than double the 2012 Energy and Water bill itself. In an 
era of shrinking budgets, it is critically important that the 
Department get this right. And we know you have the major 
responsibility to do that.
    GAO noted that the Department of Energy continues to 
demonstrate a commitment to improve contract and project 
management in NNSA and EM, and I expect to hear from you today 
about the Department's plans to address the remaining 
challenges for the successful execution of its construction 
projects moving forward.
    Thank you, Mr. Chairman, for the time.
    Mr. Frelinghuysen. Thank you, Ms. Kaptur.
    Mr. Bosco, front and center. Good morning. Thank you.
    Mr. Bosco. Good morning, sir. Thank you.
    Mr. Frelinghuysen. I know you have some remarks and if you 
have some lengthier remarks I am sure we will be happy to put 
those in the record. But the time is yours.
    Mr. Bosco. Thank you, sir. Good morning, Mr. Chairman, 
Ranking Member Kaptur, and Distinguished Members of the 
Subcommittee. Thank you for having me here today to discuss the 
Department of Energy's management of our largest construction 
projects.
    My name is Paul Bosco. I am the Department of Energy's 
Director of Acquisition and Project Management. I report 
directly to the Director of Management, Ms. Ingrid Kolb. I 
serve as the Department's primary point of contact on all 
matters relating to project management. I also serve as the 
Deputy Secretary's Secretariat on the Energy System's 
Acquisition Advisory Board for all major systems projects. I am 
a registered Professional Engineer, a certified Project 
Management Professional. I serve as a member of Project 
Management Institute's Global Executive Council, and I have 
been with the Department of Energy for six years. As already 
noted, previously, I served for 28 years with the United States 
Navy as a Civil Engineer Corps Officer, predominantly 
overseeing construction projects. My last assignment was as the 
Operations Officer here in Washington, D.C., at the 
headquarters of the Naval Facilities Engineering Command.
    Within the Department of Energy, among other things, I am 
responsible for project management policy, guidance, and 
oversight. More specifically, I coordinate and oversee all of 
the Departmental project management directives to include our 
project management orders and our guides. In the context of 
oversight, my functions include: monitoring adherence to those 
project management directives; the maintenance of all 
Departmental project management metrics; the execution of 
external independent reviews on our largest projects, including 
the conduct of independent cost estimates and cost reviews; and 
the publication of our monthly (Red, Yellow Green) project 
status report for all active Department of Energy projects. I 
also serve as the Department of Energy's senior procurement 
executive.
    As already noted, since 1990, as I am sure most everyone in 
the room knows, the Department of Energy has been on the GAO 
High-Risk List for contract and project management. During the 
past several years our senior leadership has focused their 
attention on this matter, committed to making improvements. The 
Department started and completed several initiatives to improve 
contract and project management, including a Root Cause 
Analysis and a Corrective Action Plan that was completed in 
2008; a Deputy Secretary Contract and Project Management Summit 
which was convened in December 2010; and numerous Deputy 
Secretary Policy directives, including most recently a December 
2012 memorandum entitled, ``Aligning Contract Incentives for 
Capital Asset Projects,'' that reinforced greater 
accountability for all parties.
    DOE is making progress. In May 2011, many of our project 
management reforms were codified within our updated project 
management order. Our most significant enhancements include: a 
new Departmental ``Project Success'' standard and other project 
management metrics; improved project upfront planning with 
greater design maturity standards; and new requirements, more 
stringent requirements for Independent Cost Estimates and 
Independent Cost Reviews, at our key critical decision points.
    So, how are we doing? Have these reforms had an impact? The 
answer is a resounding ``yes.'' The reforms are working. The 
most recent GAO high-risk updates bear that out. In 2009, NNSA 
and EM were focused and included on that list. Most recently, 
as noted, GAO narrowed that focus on NNSA and EM major projects 
and major contracts valued at or above $750 million.
    I concur with GAO's updates. We are doing better, but we 
have more to do. DOE's largest, most complex construction 
projects have been our greatest challenge. Our new project 
management reforms were not in place when their cost and 
schedule baselines were established. We must continue; we will 
continue to work towards improving project execution on our 
largest, most complex projects.
    Thank you, Mr. Chairman and Subcommittee Members for the 
opportunity to appear before you today. I stand ready to answer 
any questions you might have.
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    Mr. Frelinghuysen. Thank you, Mr. Bosco.
    Mr. Raines. Good morning.
    Mr. Raines. Good morning.
    Chairman Frelinghuysen, Ranking Member Kaptur, and 
distinguished members of the Subcommittee, thank you for having 
me here today to discuss the steps the National Nuclear 
Security Administration has taken to improve acquisition and 
project management. More importantly, thank you for your 
continued support of NNSA's vital security mission. We could 
not do this important work without strong bipartisan support 
and engaged leadership from the Congress.
    The NNSA's Office of Acquisition and Project Management was 
established in February 2011, and I became its Associate 
Administrator in August of 2011. APM substantially changes the 
way NNSA plans, estimates, and manages construction projects.
    This reorganization encompasses four major areas. First, 
organization. Similar to project management organizations in 
the private sector and other federal agencies, APM is 
independent from the requirements owner and is fully integrated 
with an acquisition organization. Reporting directly to the 
Administrator, it shortens the chain of command for faster 
decision-making and provides an independent check on scope 
changes once requirements have been agreed upon. Our validation 
of budgets and schedules creates a healthy tension in the 
project execution process.
    Second, we have developed new and improved processes for 
more effective oversight and selection of best value 
contracting strategies. Some examples include codifying the 
Administrator's position on 90 percent design completion prior 
to baselining our nuclear projects. Second, defining precisely 
what 90 percent design completion means. We have instituted 
independent peer reviews utilizing the best talent from across 
the complex, and we have revised our change control procedures 
to minimize scope creep.
    Third, people. People are our most important asset. Our new 
organization and processes will only be successful with a well 
trained and motivated workforce. APM serves as the community 
manager for our federal project directors and contracting 
officers, ensuring they have the necessary training and tools 
to do their job effectively. When we do not have suitable 
experience training or numbers of people, we are augmenting our 
staff from the headquarters team using the U.S. Army Corps of 
Engineers or contractor support. We have partnered with DoD's 
Cost and Program Evaluation group for cost estimating 
expertise.
    Fourth, culture. We are developing a culture of acquisition 
and project management excellence and a reputation as a 
professional owner. We believe this will expand the universe of 
companies that want to compete for our work, a culture that 
realistically and objectively assesses risk, questions 
optimistic assumptions, and uses quantitative data for 
decision-making, a culture comfortable in identifying problems 
early so they can be dealt with quickly and a culture that 
holds ourselves and our contractor partners accountable for 
poor performance. Because of the nature of our work, safety and 
quality will never be sacrificed. That said, we will make risk-
based outcome-focused decisions to ensure we provide the best 
value to the taxpayer.
    We are making progress. We have set clear goals and are 
meeting them. All projects completed in the last two years met 
the Department's cost goals that Paul had just talked about, 
and on a portfolio basis, finished 6 percent below the original 
budget. Although we will always work to improve safety and 
quality, our construction, safety, and quality records are 
enviable. I do not know any agency that has a higher percentage 
of OSHA-certified, voluntary personal protection sites as we 
do. Our high explosives pressing facility project at Pantex 
received the highest safety score ever recorded from the U.S. 
Army Corps of Engineers Tulsa District. For the fourth year in 
a row, our MOX project received the NRC's highest rating of no 
improvements necessary in their annual report.
    Our projects were among the most difficult in the world. 
Their time horizons are long with supply chains that stretch 
around the world. We have the best companies in the world on 
our team. We are working closely with them to make sure they 
bring their most talented people to work on these projects. I 
believe the progress we have demonstrated on our smaller work 
is applicable and scalable to our major systems projects. There 
is more to do but we are on the right track.
    Thank you again for having me here today. I look forward to 
answering your questions.
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    Mr. Frelinghuysen. Thank you, Mr. Raines.
    Mr. Surash.
    Mr. Surash. Thank you, sir. Good morning, Mr. Chairman, 
Ranking Member Kaptur, and members of the Subcommittee.
    Thank you for having me here today to provide you with an 
update on the Department of Energy's Office of Environmental 
Management (EM) major system construction projects and the 
progress in implementing contract and project management 
reforms.
    I am Jack Surash, Deputy Assistant Secretary for 
Acquisition and Project Management within the Office of 
Environmental Management. I am also a registered Professional 
Engineer. I have been with the Department about seven years, 
and previously, I served in the Navy, as it has been noted, in 
the Civil Engineer Corps for almost 28 years.
    Within EM, I am responsible for project management 
assistance, independent project oversight, and performance 
evaluation. I am also responsible for effective and efficient 
operation of the procurement functions within EM, and 
management of the closeout of EM's program for the American 
Recovery and Reinvestment Act of 2009.
    I am very pleased to report that EM has been making steady 
improvements in project and contract management, areas that the 
GAO has designated as a governmental high risk for many years. 
Based on results we achieved, coupled with our continued 
efforts and commitment by top leadership to address contract 
and project management weaknesses, GAO in its February 14, 2013 
high-risk updated stated, and I am quoting, ``GAO is further 
narrowing the focus of its high-risk designation to major 
contracts and projects, those with values of at least $750 
million, to acknowledge progress made in managing smaller value 
efforts.''
    Based on lessons learned from analyzing root causes of our 
project and contract management weaknesses, we have put in 
place new policies and guidance that require strict adherence 
to several things. These changes are already bearing fruit. Let 
me mention a couple of those.
    The most important change is the requirement to assure 
proper upfront planning has been conducted so that the 
requirements are clearly identified and the appropriate design 
maturity and technology readiness have been achieved. We also 
need to ensure that safety is fully integrated into design 
early in the project and require that project design be 90 
percent prior to establishing the project baseline. We also 
engage our internal/external oversight organizations, such as 
the Department of Energy's Office of Acquisition and Project 
Management led by Paul, and the Defense Nuclear Facilities 
Safety Board at every critical stage of the project to ensure 
their expertise is incorporated early in the process. We want 
to make sure that our contract requirements are clearly defined 
prior to issuing a solicitation for a construction project.
    We also want to first consider the use of a firm fixed-
price contract to complete work requirements in order to cap 
the government's cost liability.
    We have put in place objective performance measures to the 
maximum extent possible to incentivize optimal contractor 
performance and to reduce costs.
    We have expanded the use of project peer reviews following 
a process similar to the Department of Energy's Office of 
Science. We have also partnered with the U.S. Army Corps of 
Engineers to obtain cost estimating services, as well as 
resources for our project peer reviews. We will also ensure 
that our projects are planned based on funding that is 
affordable and executable.
    The Office of Environmental Management is continuing to 
make progress with the construction of two very large 
construction projects--the Waste Treatment and Immobilization 
Plant in Richland, Washington and the Salt Waste Processing 
Facility in Aiken, South Carolina. The Waste Treatment Plant is 
vital to the Department's efforts to treat the high-level waste 
at Hanford. Physical construction is approximately 62 percent 
complete, and currently we are focused on resolving technical 
issues with the Pretreatment Facility and the High Level Waste 
Facility. Over the last several months, the Energy Secretary 
and a number of top engineers and scientists have been 
reviewing the remaining technical issues impacting this 
project. We will fully resolve these issues prior to resuming 
full construction activities in these facilities; however, full 
construction continues on the remaining facilities that are not 
impacted.
    Our other large construction project is the Salt Waste 
Processing Facility Project (SWPF). Physical construction on 
this project is approximately 69 percent complete as of today. 
There are no outstanding technical issues. In fact, we have a 
pilot version of this plant that has been in operation since 
2008, and that plant has processed over 3 million gallons of 
waste to date. Unfortunately, delays in delivery of some key 
process components have resulted in a cost and schedule 
overrun, and we are presently working very closely with our 
contractor to identify the most economical and timely way to 
move forward.
    Mr. Chairman and Subcommittee members, I thank you very 
much for the opportunity to appear before you today.
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    Mr. Frelinghuysen. Thank you for your testimony. Thank you 
all for your testimonies. You are here this morning because you 
represent part of a reform movement here. The Committee has 
been obviously aware of directives and corrective action plans 
probably that have been coming up each and every year for the 
last 20 years. But you have been in the vanguard of the 
implementation. I assume you are not satisfied with where we 
are today. The statistics, the latest report of the Department, 
and I want to be complimentary because you are here and we want 
to recognize the significant effort each of you individually 
have done, and collectively it represents a lot, but if you 
look at the latest report of the Department of Energy, 8 of the 
15 active EM projects had an unacceptable status representing I 
think $14 billion in costs; 3 of the 14 active NNSA projects 
were considered unacceptable representing about $5 billion in 
costs. And that does not count the Uranium Processing Facility 
at Oak Ridge because it still does not have a proper baseline. 
So you are not satisfied. And I would like to get an answer 
from you as to what more we can do here. The costs here are 
staggering. They are unacceptable to you. They are unacceptable 
to us. I think the taxpayers are wondering what is going on. 
That is really the purpose of this hearing here. We are on your 
side but we would like to hear from each of you individually 
some more on that issue.
    Mr. Raines. I would be happy to start. You are correct. We 
are not satisfied, and I think that is one of the reasons why 
in the NNSA we set up this new organization that has direct 
access to the Administrator, the most senior leader in the NNSA 
to make sure that his vision--I am sorry, her vision--is being 
promulgated to our staff and to our contractors. We believe 
that what we are doing today is going to make a vast 
improvement. On the projects that are not performing well, we 
are working with our contractors very, very closely to have 
them bring the right people to bear on the problems and to hold 
them accountable through the terms and conditions of the 
contract to the greatest extent practicable.
    Mr. Frelinghuysen. You have the right people, have you not? 
Are you suggesting we do not have the right people?
    Mr. Raines. No. In some instances----
    Mr. Frelinghuysen. It is a remarkable workforce here.
    Mr. Raines. From our contractor workforce. So to be clear, 
the right people that we are talking about, the projects that 
we have had problems with, as we talk with our contractor 
partners, we have made substantial changes in both the project 
management personnel, the project controls personnel, and the 
construction management personnel. As we have stated, we can 
have the best processes in place, but if the people who are 
implementing them are not the right people for those particular 
jobs, then we need to have them put better people on the 
project. And they have done that for us.
    Mr. Frelinghuysen. Mr. Bosco.
    Mr. Bosco. Sir, I agree with you 100 percent.
    Mr. Frelinghuysen. You guys are in the driver's seat here. 
We like you. We commend what you do. Give us some confidence 
that we are going to see a sort of----
    Mr. Bosco. So here is some assurance for you, sir. I am in 
the policy guidance oversight business. The reforms that we 
have made are in place. They are in our orders. They are in our 
guides. Now it is time to implement. So what has changed?
    So here are some big things that have changed. I believe 
for the first time ever, and again, I am relatively new, six 
years at DOE. We now have established Department-wide project 
success metrics. My office has become the central repository 
for all of our project data and information. So my colleagues 
from NNSA and EM, they can do all the statistics they like, and 
they do. But at the end of the day we submit quarterly reports 
to GAO and OMB on the information that we retain, and we serve 
as the, if you will, the umpire on whether a project is meeting 
our project success standards and whether they are being 
delivered, and they are conforming to our new policy.
    Mr. Frelinghuysen. Now, is that substantially different 
than what was occurring before?
    Mr. Bosco. Sir, in the past there were standards measured 
by each program in NNSA. To my knowledge there was never an 
overarching, one departmental standard with an independent 
reviewer that would validate and hold all of that project 
information. And some of the other improvements we have made in 
that regard, we have a much more robust project assessment and 
reporting system. What does that mean? That means that the 
project cost and the project schedule systems that our 
contractors use at their sites, and we have a process called 
earned value management system, for example, which is how we 
track variances on cost and schedule, we now have a system that 
every month they upload into a data warehouse. And so we are 
all looking at the same information that our contractors have 
at their sites at headquarters, and it allows us to drill down 
and take a look at specific control accounts to more readily 
identify problems. And I have people on my staff that do those 
reviews, as does Bob, as does Jack. So we do have a much more 
robust analysis from one central repository.
    Mr. Frelinghuysen. Before going to Ms. Kaptur, Mr. Surash, 
get your oar in the water.
    Mr. Surash. I am also not happy with where we are at, sir. 
But I am confident we will do better as we go forward.
    Mr. Frelinghuysen. I want you to know we have heard that 
quite a lot here on this panel. I have been on this panel a 
long time. We are here because we want you to succeed. So tell 
me. Give me even more confidence than you are giving me at the 
moment here.
    Mr. Surash. So, the various ideas and reforms that you have 
heard about, for the projects and contracts underway, we are 
going to implement those ideas to the greatest extent we can. 
For salt waste processing, we are in kind of a cone of silence 
period here because we are in active negotiations with the 
contractor. But as a for instance, when we have had to 
rebaseline a project, in the past I do not feel we have done 
the proper job of doing an integrated project and contract 
change procedure. So what we are doing right now is we are 
working with the salt waste processing contractor; we are 
actually negotiating the overrun--how much more it is going to 
cost and how much longer it is going to take. That is step one. 
As that is being done in parallel, we are applying the 
procedures to it, and only then will we get to a new projected 
cost and schedule. So that is stuff we have not done as good of 
a job before.
    Mr. Frelinghuysen. Ms. Kaptur.
    Ms. Kaptur. Thank you, Mr. Chairman.
    Following on your excellent line of questioning, let me ask 
Mr. Bosco, Mr. Raines, and Mr. Surash, when you assumed your 
positions and you took a look at what you were expected to do, 
what were the worst examples you found that took your breath 
away in terms of cost overruns? And what did you say to 
yourself?
    Mr. Bosco. The biggest surprise I had, ma'am, when I came 
in was the monetary figures. They were in the billions. I was 
very surprised in my first project reviews where people would 
sit down across from me and propose to me, establishing 
projects that were in the multi-billions of dollars with 
decades of timeline. And so that was my biggest surprise. So 
one of the initiatives we have taken is to try to disaggregate 
large projects and make them more discreet, complete, and 
usable facilities within themselves to reduce the time horizons 
which by just doing that alone reduces risk. And it also allows 
us to establish much more clearly very discreet funding 
profiles.
    And so my biggest surprise was the size and how long the 
projects were and that we seemed to group many, many types of 
facilities together under the banner of one project.
    Ms. Kaptur. Do you think the problem was that we did not 
know what we were doing scientifically? Or technically we did 
not have the trained workforce? That the schedules for 
completion were unrealistic? The projects were ill-defined? As 
you look at the amounts of money that were projected to be 
spent, what is at the basis of the inaccurate estimates of 
cost? Do you think people who were put in charge just simply 
did not know how to handle the project?
    Mr. Bosco. Ma'am, I really cannot. I was not there when all 
of this occurred. I would only be speculating on what was sort 
of at the root cause of all of this. For me today, the root 
cause and the biggest challenge going forward is one of 
culture. We have all of the policy guidance reforms in place. 
The organizational framework in place. Now it is a matter of 
implementing. And as Bob alluded to, making changes to the 
culture to add in this more rigorous disciplined project 
management process.
    Ms. Kaptur. Unless you have actually been inside the 
culture, it is hard to understand what you really mean. If you 
were to say that to 100 people that I represent, nothing sticks 
to the wall of what you are saying to me. It is hard for me to 
express to them, okay, fine, so we have to change the culture. 
So what does that mean?
    Mr. Bosco. I think what most people would tell you is the 
history of the Department of Energy, rightfully so, when it 
stood up out of the Manhattan Project because of the secrecy 
and everything that evolved with that, there was a very strong 
reliance on our superstar contractors Bob alluded to. We have 
world-class contractors. So perhaps over time there has been an 
overreliance on our management and operating contractors. And 
over time sort of the federal expertise perhaps has eroded. And 
I think at this juncture we are trying to sort of swing the 
pendulum back to a more disciplined appropriate federal 
management and oversight.
    Ms. Kaptur. Before I turn to the other gentlemen for any 
comments they want to make, do you have incentives, or what 
types of incentives do you have for completing projects on 
time, or under budget, or even ahead of time while safeguarding 
worker safety?
    Mr. Bosco. So that gets actually to the recent Deputy 
Secretary policy memorandum. And I can only speak to contract 
actions going forward because obviously contracts that are in 
place today already have provisions that were negotiated many, 
many years ago. Going forward, some of the key provisions that 
we are going to be looking for, especially on a large capital 
asset project that goes over the course of many years. Today, 
we are providing interim fee payments when they reach interim 
milestones. Going forward, the Deputy Secretary has asked us to 
look at what is called provisional fee clauses, which basically 
says that at the end of the day if you do not deliver that 
finite project on budget, on cost, as we all agreed to, we have 
the ability to claw back that interim fee that you had been 
previously paid.
    Ms. Kaptur. Thank you very much.
    Mr. Raines, Mr. Surash, do you want to add anything to 
this?
    Mr. Raines. Yes, ma'am. So the question of what were the 
biggest surprises. I think I am going to rephrase it a little 
bit when I came into the NNSA.
    Several. First, we were very lax on requirements 
definition. The basis of a project is to understand what is the 
scope that you are going to buy because if we do not know 
exactly what we are going to buy, you can have the best 
estimating process in the world and the best management team in 
the world but the project continues to grow. So that is the 
first thing that we look at. How do we better define the 
requirement?
    The second thing is having a reliable cost database. I 
think that many people were relying on standard cost databases 
with some multiplying factors that we would use for saying, 
well, we have not done this work for 30 years and it is nuclear 
work and it is very, very difficult, but since we had not built 
them for 30 years, we just went in and we underestimated. 
Today, we have a broad universe of projects that we have a lot 
of detailed data on. I will speak a little bit as to how we are 
using that now.
    Third was poor change control. After we set a requirement, 
sometimes it will change. As soon as you change a requirement, 
the first thing the construction manager and a project manager 
should do is identify what do we think the cost and schedule 
impact for this new requirement is. Then the program manager 
will make a decision as to whether or not the business case 
supports doing that extra work or that work is not worth the 
value.
    And then finally, I think to expand on the culture part, it 
is really revisiting the provisions in our contracts. A FAR 
based contract is generally the most powerful contract that any 
construction contractor that works for us will use. There are 
provisions in there for duty to proceed, disputes clauses, et 
cetera, that the Department in the past has been reluctant to 
use. So even though some of these projects have been baselined 
a very long time ago, what the NNSA has done is we started to 
take a look and said even if it is a cost contract, the costs 
have to be reasonable. And if we have a very large overrun, as 
we have had on a couple of our projects, we have looked at the 
reasonableness of cost. And we have had bilateral negotiations 
with our contractors where they have agreed at our insistence 
to return costs to us because they did not perform as we 
expected.
    The fourth thing is fee. Besides having provisional fee, 
which we have included those in some of our contracts, if we 
believe that we have paid fee inappropriately because the 
contractor's data integrity led us to make a bad decision, our 
contract, in fact, gives us the ability to pull that fee back. 
That can be disputed but we have done that recently. And if we 
see more actions where that is happening, we will continue to 
do that.
    Ms. Kaptur. I like the rigor of the way that sounds. I hope 
that in the implementation phase it works out that way.
    I think we have probably gone overtime, so Mr. Surash, I 
will pick you up in the second round.
    Mr. Surash. Thank you, ma'am.
    Mr. Frelinghuysen. Mr. Simpson, I am the good cop. He is 
the bad cop, I think. Let's see what happens here.
    Mr. Simpson. Like the chairman, I have been on this 
Subcommittee for 10, 11, 12 years, something like that. We have 
had this hearing with the Department for 10, 11, 12 years, and 
it is always ``we will do better.'' And to tell you the truth, 
I do not understand what any of you said. I have a simple 
definition here of you come in or the Department comes in and 
wants to sell a project to Congress that we need to do. And we 
ask what is it going to cost and how long is it going to take? 
And it is estimated to be a billion dollars and take 20 years 
or 15 years or whatever to finish. And about two years later we 
are into $3 billion. And about two years after that we are into 
$6 billion. My definition of success is on time and on budget. 
Are we ever going to get to that point and stop holding these 
hearings about what we are doing wrong and how can we do 
better? I am not trying to be critical. I know you guys are 
trying to change the culture, that is going on out there with 
the contracting community. But I talk with a lot of people all 
over the country, contractors that deal with the Department of 
Defense, that deal with the Department of Energy and everybody 
else. I get more criticisms of dealing with the Department of 
Energy. There is more disconnect between contractors and the 
Department of Energy than any other department I have ever 
seen. Oftentimes I hear them say things like if they would just 
get the Department of Energy out of the way we could do our job 
and get this done.
    So I guess I am just about as frustrated as you can be 
because obviously when we run billions of dollars over our 
estimated cost we have no way of being able to project what our 
budget is going to be for future years. I do not know that I 
have an answer in there or a question in there, but it is just 
frustrating for everybody that has been on this Committee for 
any period of time. And I look forward to getting you off the 
High Risk list.
    Mr. Bosco. The High-Risk List.
    Mr. Simpson. Tell me, exactly what does being on the high-
risk list mean? It is not a good thing I would assume.
    Mr. Bosco. Sir, the high-risk, and I know GAO is behind me 
and I am sure they will correct me perhaps at the second panel, 
but my understanding is if there is a potential for fraud, 
waste, abuse, or mismanagement. I believe we fall into that 
last category since we have never been able to definitize or 
actually show any fraud and abuse. Arguably, there is some 
mismanagement. So that is what I believe being on the high-risk 
means.
    Mr. Simpson. I suspect there has been waste. When we 
started the Waste Treatment Plant in Hanford, I believe that it 
was 10 percent engineered when they started construction of 
this. And I remember Mr. Hobson, chairman of the Committee then 
just went berserk. And consequently, we got to where it has to 
be 90 percent engineered now before you start construction. I 
also understand changes in mission and mission creep and all 
that kind of thing. I also understand that these are complex 
systems that are being built for the first time ever. If we go 
out and build a dam with the Army Corps of Engineers, we can 
pretty much tell you what a dam is going to cost because we 
built a whole lot of them. We have not built many waste 
treatment plants. And that is going to add some uncertainty to 
it. Our frustration is the uncertainty between a billion 
dollars and $6 billion. I can flip a coin and come closer than 
that. That is what is frustrating for this Committee and that 
is why we hope that we can get a handle on this. And if we do 
not, it is going to be very difficult to get funding for a lot 
of these projects that are critically important to the future 
of this country.
    Mr. Bosco. Sir, so to that point, the biggest frustration, 
and I will speak for Bob and for Jack, our biggest frustration 
and disappointment is the largest projects are ones that 
predate us and they will continue for the better part of the 
next decade. And they will always be known as those projects 
with massive cost overruns and massive schedule delay. We would 
ask that you judge us on our most recent large capital asset 
projects coming out of the chute today.
    So I will put Mr. Raines on the spot, but he will soon 
baseline and make a commitment to the Hill on the Uranium 
Processing Facility. And so the exact specific point estimate 
and number he will commit to is what we will deliver to. And we 
will use our new project management reforms to sort of give you 
that number and to give you that schedule.
    As we rebaseline these largest projects, WTP, Salt Waste, 
MOX, we will implement and put in our new reforms. But again, 
when compared to the original number, the original baseline, it 
will be very hard to make a very complimentary statement on any 
of those projects.
    Mr. Raines. Mr. Simpson----
    Mr. Simpson. Move your microphone up a little bit so we can 
hear you better, please.
    Mr. Raines. I agree that what the goal is, delivering on 
budget and on schedule. That is also the Administrator's goal. 
It is what our stated goal is to all of our contractors. And in 
fact, when we say we want to deliver on time and on budget, it 
is not the TPC, the total project cost which includes some 
contingency that the government puts in, but we expect them to 
deliver on the contract deal that we make with them. And those 
contingencies should only be used as a last resort. So that is 
the first point I want to make sure. We are absolutely in 
alignment.
    Secondly, there is some good news. I am going to give you 
just three projects that we are working on.
    Mr. Frelinghuysen. Would you yield? Are you committing to 
the baseline that he suggested you are going to?
    Mr. Raines. I will get to that when we do a baseline. But 
we have three projects today. The Radiological Equipment 
Installation Project at LANL, a $199 million project that is 
scheduled to be completed on budget. We have the High Explosive 
Pressing Facility Project at Pantex, a $145 million project 
that is 50 percent construction completed, and we are 
delivering that project at about $20 million under budget 
today. And then we have baselined our first hazard category 1 
Nuclear Project, the TRU Waste Facility at LANL using these new 
procedures, understanding what the costs were to baseline that 
work, and so we will be able to monitor that.
    On the Uranium Processing Facility, one of the things I 
know that has caused concern is the cost increase that we have 
reported to the Committees, but the reason that we did that is 
that is an accurate, credible estimate as to where we are 
today. So as we looked and saw what it really started to cost 
us to build the Waste Treatment Plant, the Salt Waste 
Processing Facility, and the MOX Facility, we saw that the unit 
cost that we had reported back in 2007 were unachievable. We 
wanted to make sure that we let everybody know what the budget 
was because we agree that budget stability is very important. 
We cannot do our work either if we have to continually change 
our budgets to meet these cost growths. The Administrator knows 
it. The program officers know it. And so by having a credible 
estimate as early as we can to target to, we think we will do a 
much better job.
    Mr. Surash. Sir, on the Salt Waste Processing Facility, 
that was rebaselined over four years ago, at one point $1.3 
billion and a completion in 2015. And unfortunately, what has 
happened there is really the prime contractor had problems 
getting subcontractors to provide the process vessels. In fact, 
they had to terminate the first subcontractor, recompete, and 
get a second subcontractor.
    Ms. Kaptur. Excuse me. Would the gentleman yield? Would the 
gentleman yield on that point?
    Mr. Simpson. Sure.
    Ms. Kaptur. When you say the first contractor could not do 
the job, was the problem a scientific problem? What was the 
nature of the problem?
    Mr. Surash. Thank you, ma'am. I think this is kind of a 
sign of the state of the nuclear supply chain in this country.
    Mr. Frelinghuysen. Maybe it was a sign of the Department 
not knowing what is going on.
    Mr. Surash. The requirements, the technical requirements, 
were not changed in this situation. The prime contractor, we 
thought, did an adequate job of finding a qualified 
subcontractor, and put him under contract. Unfortunately, they 
did not make sufficient progress. They did then recompete, and 
get a second subcontractor. They ended up producing the vessels 
with great quality. Thus far there are no known issues, but at 
the end of the day that caused a two-year slip in the project. 
And that is really the single issue, the root issue that we are 
dealing with today. The design on that project was sufficiently 
matured. The technology was matured. A pilot plant was in 
operation, so some of the good ideas I think you have heard 
here today were actually done on that project, but very 
unfortunately it was a subcontractor's failure to be able to 
produce these vessels. Very large vessels, as big as this room, 
about 10 of them that caused this project to have a price 
increase and a schedule increase.
    Mr. Simpson. Back to the other part of my question, and I 
hear this all the time from contractors all across the country. 
What they generally tell me is they do not want to work for DOE 
anymore because they said it is just a government maze there. I 
hear that from subcontractors. Obviously, some of them probably 
are not qualified to do it. What about that relationship 
between contractors, subcontractors, and DOE?
    Mr. Surash. Let me, if I could, sir. We have been using 
environmental management contracts more similar to the 
Department of Defense for a number of years now so that we are 
not using the management and operations contract for the most 
part. Salt Waste Processing and WTP are normal federal 
acquisition regulation contracts.
    We have always obtained lots of competition in the market 
when we have gone out, so there are big name companies that 
come forward. We had competition in 2000 on WTP. We had 
competition in 2002 on salt waste. So one of the things that we 
are doing after we get a contract in place is we are using a 
partnering kind of issue that really the Corps of Engineers 
started many, many years ago. So we are trying to strengthen 
the relationship at the site between the site manager and the 
president or project manager of that contractor. We are just 
after alignment, trying to bring forward or identify problems 
earlier, and have everybody agree that we are going to solve 
things at the lowest accountable level. And we are seeing some 
good results on that. The Salt Waste Project just recently put 
in place this partnering effort within the last couple of 
months. And we are starting to see good things on that.
    Mr. Simpson. Well, these things need to be discussed and 
you need to know where we are coming from from an 
appropriations perspective. So I appreciate it.
    Mr. Frelinghuysen. Thank you, Mr. Simpson.
    Mr. Nunnelee, thank you for your patience. Thank you for 
yesterday as well.
    Mr. Nunnelee. Thank you, Mr. Chairman. Well, I am glad to 
be back in this seat and not in yours.
    You have reported that some of your challenges are finding 
qualified, skilled labor to actually do some of these 
construction projects. In fact, in some cases you have said you 
have had to build that from the ground up, including entering 
into partnerships to help train unskilled laborers. And then 
you have said a problem is that either they do not finish or if 
they do finish with the training, then they leave to go 
somewhere else after we have helped train them. And I guess I 
am fascinated because my son is in the Navy and his job with 
the Navy is to do well in dental school. And when he finishes, 
while he is active duty Navy today, he will go on assignment 
and fulfill that obligation. Can we not do something with these 
folks we are training--similar to what Navy is doing with my 
son, saying that, okay, we are going to help train you, give 
you a skill, and then you owe us so many years after the fact?
    Mr. Raines. Well, sir, on the craft labor, which I think is 
the part that you are talking about, we are really not seeing a 
large exodus of craft labor from the projects. The kind of work 
that we are doing, it is the same skills that they would do for 
commercial construction but because the quality standards are 
higher, they have more training. For example, all welds are 
radiographed. And so a standard welder, you can have some 
flaws. You cannot have flaws in ours, so we have to set up a 
training program for the welders to be qualified so there will 
not be any rework. Once we train those folks, we generally are 
not losing them. Now, we have lost the senior engineers, and we 
are working with our contractors to put into place retention 
programs where if they stay on the job for a period of time 
they would get a bonus at the end. And so because they are 
already trained, unlike in the Navy where you are trading the 
time for the skill set, since these people are already 
qualified, they are degreed engineers, what we are doing is we 
are incentivizing them to stay on the project. So those are 
some of the things that we have in place.
    Mr. Surash. Sir, at the Office of Environmental Management, 
this is something that our prime contractors definitely must 
pay attention to. I do not want to sit here and say it is easy, 
but they do have to pay attention. There are some issues, as 
Bob was mentioning, with respect to the nuclear quality 
standards, that need to be dealt with, but this does not seem 
to be one of the prime drivers for some of the overruns we are 
seeing, but it is something that requires continual attention 
due to the nature of the work.
    Mr. Bosco. Sir, and I am in the project management policy 
business at the Department of Energy, but I can share one 
concern I think we all have because we have not been in the 
nuclear construction business for so many years, as we do have 
people, craftspeople on our jobs and as new commercial nuclear 
reactors start getting built, dependent on the market, we do 
have concerns that some of our people that effectively we have 
trained on our jobs could migrate over and move to some of 
those projects.
    Mr. Nunnelee. The question is not so much losing these 
people after you get them trained. You have to be licensed in 
welding for nuclear projects; right?
    Mr. Raines. Yes, sir. Different certifications. Yes, sir.
    Mr. Nunnelee. The question in the future is are we going to 
have enough of these people? So it is not losing them; it is 
trying to get them.
    Mr. Raines. I think in essence we are creating a large part 
of the industrial base for these kinds of projects. So we were 
the first out of the ground with many of this work. There were 
some commercial projects that are being built today, and so we 
are providing that trained workforce that will be able to go 
there. I know in Oak Ridge, for example, we are trying to work 
with the local colleges, the community colleges, to see how can 
we, in fact, encourage them to have associates' degrees to do 
this kind of work because the UPF project, once we baseline 
that job about a year from now, it is a job that will span for 
7 to 10 years. And so if we do that, we can show people that if 
you will get trained in these skill sets, that there is a job 
in a local community available for you.
    Mr. Frelinghuysen. Will the gentleman yield? So you say it 
is not a problem, losing people?
    Mr. Raines. I will say that the retention portion right now 
is not a problem. Training the people initially to get to the 
standard was more costly than we had anticipated.
    Mr. Frelinghuysen. Thank the gentleman for yielding.
    Mr. Nunnelee. Thank you. I yield back, sir.
    Mr. Frelinghuysen. Mr. Fleischmann, Oak Ridge has been 
invoked.
    Mr. Fleischmann. Indeed.
    Mr. Frelinghuysen. We warmed up the room for your arrival.
    Mr. Fleischmann. Thank you, Mr. Chairman.
    Mr. Frelinghuysen. I am very pleased to recognize you.
    Mr. Fleischmann. Thank you, sir.
    Good morning, gentlemen. I have a few questions. As our 
chairman has said, I represent the Third District of Tennessee, 
which includes all of Oak Ridge.
    Mr. Raines, there seems to be some question, sir, as to 
whether or not the UPF construction will be split off from the 
Y12 Pantex M&O contract. Can you kindly clarify that situation, 
please, sir?
    Mr. Raines. Sir, I really cannot discuss too much because 
that is a contract action that is under protest. But what has 
been reported in the press is that the offeror that we selected 
was going to do not only the management and operations but was 
also going to do the construction. So we did award both 
contract line items to the successful offeror.
    Mr. Fleischmann. Thank you. Now, I realize you have the MOX 
in South Carolina and you have a project I believe out in 
Idaho. You have got four or five major projects. One of the 
biggest challenges in meeting the cost estimates for many of 
these major construction projects seems to be that they are 
one-of-a-kind facilities. You have never built a UPF before 
with technical requirements that have never been built. Can you 
briefly describe some of the technological challenges faced 
when building these facilities? And then a follow-up question, 
is there any guidance that you use while preparing to ensure 
that the equipment and processes are sufficiently mature before 
you set a baseline?
    Mr. Raines. Yes, sir. Although these are all first of a 
kind, there are a lot of similarities in things that we can get 
good cost data on. So, for example, all of the major projects, 
the ones that Jack is constructing and the ones that we are 
constructing, are all NQA-1 type projects. They are all HazCat 
1 nuclear facilities. They all have to meet specific seismic 
concerns that we would either work with the Defense Board or 
the NRC. And so we now have a much better understanding of what 
it takes to satisfy all of those requirements.
    I think more importantly what we have is a basis for work 
actually being constructed. So it is not just taking numbers 
out of a book; it is really understanding what is it that our 
craft can do and what is it that a supplier-base can do? Again, 
that was one of the reasons why we revised the top-end of the 
range for the UPF project up based on this experience.
    Technology readiness is extremely important. We design the 
facility based around specific technology. So, for example, for 
the 9212 portion of UPF there are seven technologies that are 
new to us. There are technology level ratings that go from 1 to 
9. In accordance with our orders, we have to be at a minimum of 
technology readiness level 6 before we baseline. For those 
seven technologies, five of those are already at 6 or 7; two 
are below 6, and we believe that we will have those at 6 in the 
next several months. And so we will make sure, just as the 
design needs to be fully matured, that the technology will be 
matured. That is a lesson learned.
    One of the things people have asked us is we want to get 
started. We want to get started. What our goal is is to finish 
on schedule. And what we have learned is that if you take the 
time upfront, you will not get the schedule growth, and in our 
business, time is, in fact, money. And so we would rather delay 
the start to make sure that what we are building can be built 
in accordance with that original plan.
    Mr. Fleischmann. So we are talking about not only the 90 
percent complete design before you break ground but you are 
also talking about getting to a technological place where you 
all feel comfortable?
    Mr. Raines. Yes, sir.
    Mr. Fleischmann. Okay. And you do think you can get there 
on the technology side?
    Mr. Raines. Yes, sir.
    Mr. Fleischmann. Okay.
    Quick follow-up question. Sequestration will obviously 
cause difficulties for virtually all DOE programs, and 
construction is probably going to be impaired as well. How does 
DOE plan to handle construction projects in this environment? 
And will the Department prioritize certain projects over 
others? And what will the Department's policy be for deciding 
which projects are given priority?
    Mr. Surash. I will go first, sir. For environmental 
management we have two construction projects--the Waste 
Treatment Plant and Salt Waste Processing Facility Project. We 
are analyzing the impacts of sequestration. One issue that has 
come up is that the Waste Treatment Plant has two control 
accounts and we may have an imbalance there. And we are looking 
at a reprogramming action to put the funds in the correct 
place.
    Mr. Raines. So I cannot speak to the fiscal year 2014 
budget, but for the work that we have ongoing today, we took a 
look at all of the work that we had. And luckily, right now the 
project that we have ongoing, we do not believe that 
sequestration will have a very negative impact. As always, what 
it does is it increases risk because we have contingency on the 
projects that right now will go to the sequestration. And so if 
those risks that we have on the project do materialize, then it 
could have an adverse effect in the future.
    Mr. Fleischmann. Thank you, Mr. Chairman. I yield back.
    Mr. Raines. And one also thing, sir. One of my colleagues 
in the back did want me to make sure that I was absolutely 
precise on the UPF. So the way that the CLIN was lined up was 
for the construction management. And so I know sometimes people 
might, you know, so even I confuse it. The CLIN was for 
construction management, and that is what was, in fact, 
awarded.
    Mr. Fleischmann. Thank you.
    Mr. Frelinghuysen. Thank you, Mr. Fleischmann.
    So is there a baseline in the offing?
    Mr. Raines. We believe that we will baseline UPF 
approximately one year from now, once we are at 90 percent 
design and as I mentioned, the technology readiness levels meet 
the criteria for a credible baseline.
    Mr. Frelinghuysen. I just want to make a few general 
comments about large projects versus small projects. You have 
noted obviously some success in small projects, but not all 
small projects have been successful.
    Mr. Raines. That is correct.
    Mr. Frelinghuysen. Some have been less than successful. 
Right?
    Mr. Raines. That is correct.
    Mr. Frelinghuysen. The issue here is this enterprise has 
certain objectives and priorities. And of course, these big 
projects are enormously expensive. And maybe the small projects 
can be expendable. That would be unhappy for any installation 
or laboratory or part of the country. But the big projects are 
part of our mission here. The nuclear stockpile. That is where 
the real money is, where the real priority is. You know that 
all too well.
    I just want to touch back into where I know Mr. Raines made 
some comments about withholding fees. That is a hammer, right?
    Mr. Raines. Yes, sir.
    Mr. Frelinghuysen. Have you exercised it? You have that 
authority. I know you are, to some extent all of you, 
futurists. You are looking towards the future in a positive way 
but there are existing contracts. And as complex as they may 
be, and certainly with the larger projects as they are and they 
are expensive, there must be some ways to exercise some 
authority; right? Can you talk a little bit about that? Whether 
that has been done to you?
    Mr. Raines. Yes, sir.
    Mr. Frelinghuysen. Mr. Raines, if you could. And Mr. 
Surash, what have you done?
    Mr. Raines. I would like to talk about four quick projects 
that we have held fees on, some of which I think we have 
mentioned today. The first one is MOX. As we saw that the cost 
was increasing on MOX, starting in fiscal year 2011, the 
contractor earned zero percent of their incentive fee in 2011 
and 2012. That was a $30 million fee withhold. Overall, there 
were some award fee pieces of their work. So when we take 
incentive fee and award fee----
    Mr. Frelinghuysen. Was any money paid out?
    Mr. Raines. Yes. Some money was paid out. So overall, we 
paid 29 percent of the fee that was available in fiscal year 
2011, and 19 percent of the fee in fiscal year 2012. The reason 
is that there are some things that the contractor is doing 
exceptionally well. For example, I mentioned the NRC. So one of 
the things that is very important that we want to incentivize 
because it lowers the ultimate cost of the project is quality. 
If we have to do rework it will cost us more money on a cost 
contract and it will push the schedule. So we wanted to make 
sure that we still had incentives for things that were still 
important to the Department.
    On the Uranium Processing Facility, as you are quite aware, 
we did not deliver the 90 percent design on schedule this year. 
We paid zero fee for that. So the UPF contractor for the effort 
on UPF earned less than 10 percent of the available fee this 
year. This is something that we have not done in the past.
    Mr. Frelinghuysen. Why not? Have you had the authority to 
do it?
    Mr. Raines. I do not know why. I do not know why we have 
not done it in the past but our contractors are taking notice. 
And so now they are more focused on understanding what our 
expectations are. On the NNSA project----
    Mr. Simpson. Will the gentleman yield?
    Mr. Frelinghuysen. Yes, sir.
    Mr. Simpson. When you say they were paid 10 percent and 90 
percent was withheld, is that 90 percent foregone or is it just 
90 percent that will be paid later on?
    Mr. Raines. That 90 percent is foregone forever, sir.
    Mr. Simpson. Okay.
    Mr. Frelinghuysen. And just tell me, if you keep the money, 
what happens to it? Why should it not be returned, reinvested, 
or maybe returned to the taxpayer?
    Mr. Raines. Yes, sir. Well, because these are cost 
contracts, what we do is we reinvest that into the overrun. So 
if the money came off of the project----
    Mr. Frelinghuysen. We reinvest into the overrun. What does 
that actually mean? We are legitimizing something? An overrun 
means that somebody was involved in poor planning to some 
extent. Is that----
    Mr. Raines. Yes, sir. Well, I guess the way to explain it 
is if I said a project was supposed to cost $100 million and my 
contractor overran by 5 and I had $5 million of fee available, 
I would take the $5 million of fee back. So I still had $100 
million asset with which to complete the work. And so I 
delivered the project at the original budget that we submitted 
in our data sheet. It is just that the contractor did not earn 
any fee. So that is what I mean when I say reinvest.
    Mr. Frelinghuysen. The crux of the matter here is that we 
have certain people in the driver's seat here at the DOE who 
are supposed to be managing this remarkable enterprise. And it 
apparently at times people have not measured up. Obviously, you 
are in the position--you are saying we are measuring up these 
days.
    Yes, Mr. Surash, jump in.
    Mr. Surash. Thank you, sir.
    Mr. Frelinghuysen. Talk about this whole issue of fees 
here.
    Mr. Surash. Yes, sir. A couple things. First of all, in the 
Office of Environmental Management, the fee determinations are 
made by our fee determination officials who are typically our 
site managers. We have a process that requires a peer review 
back at headquarters. And that has just been going on for a 
couple of years. So let me give----
    Mr. Frelinghuysen. Headquarters back where? Back here in 
Washington?
    Mr. Surash. My office, sir.
    Mr. Frelinghuysen. Oh, your office.
    Mr. Surash. Yes, sir. And that is not something we were 
doing three or four years ago.
    So let me give you a quick example on the Salt Waste 
Processing Facility Project. Several years ago when we 
restructured that contract, we had fee-for-schedule 
accomplishment and fee-for-cost accomplishment. But we had a 
capping provision where if the contractor exceeded a certain 
cost cap, and in this case I think it was about $1.1 billion, 
they would forfeit all fee for the entire construction.
    Mr. Frelinghuysen. That is a pretty high number, right?
    Mr. Surash. It was within our baseline amount, sir. At that 
time the project----
    Mr. Frelinghuysen. The baseline at that time.
    Mr. Surash. Yes, sir.
    Mr. Frelinghuysen. Has the baseline been rejiggered or 
what?
    Mr. Surash. In 2008. Yes, sir. It was increased.
    Mr. Frelinghuysen. Okay.
    Mr. Surash. So this was on the second baseline, sir.
    So the project was at $1.3 billion. The contractor at about 
$1.1 billion. The provision we had in our contract was if they 
were to breach that amount, they would forfeit all fee for the 
entire construction project.
    Mr. Frelinghuysen. Are we talking about a specific project 
here?
    Mr. Surash. Salt Waste Processing.
    Mr. Frelinghuysen. What about other projects? I am 
interested in where the GAO is coming from. Consistency here. 
Consistency, inconsistency?
    Mr. Surash. In thinking about our other major contracts, we 
have the clean-up contractor in Portsmouth, we have reduced 
their fee due to some safety concerns.
    Mr. Frelinghuysen. Is your behavior, is it consistent here?
    Mr. Surash. We are definitely holding our contractors 
accountable to what they are under contract for. It is very 
clear what the contract says. And we are doing our best to hold 
them accountable.
    Mr. Frelinghuysen. Well, to Mr. Raines, the GAO had 
something to say about you, did it not? NNSA for overriding the 
award of incentive fees to Los Alamos this year and Lawrence 
Livermomre. Was there some issue there?
    Mr. Raines. I believe that their discussion was not about 
overriding incentive fees. It was about giving an award term. 
And so we----
    Mr. Frelinghuysen. Giving a?
    Mr. Raines. An award term. So the incentive fee and the 
award fee recommendations were taken. And in fact, were larger 
than initially proposed, the reductions. And the fee 
determining official decided that it was still in the best 
interest of the Department to award the award term.
    Mr. Frelinghuysen. Do you want to repeat that again?
    Mr. Raines. The fee determining official----
    Mr. Frelinghuysen. Who is the fee determining official? Who 
is this person?
    Mr. Raines. It was Acting Administrator Miller.
    Mr. Frelinghuysen. Okay. Okay. Who has testified before the 
Committee for the Critical Decisions Leadership. Okay.
    Ms. Kaptur.
    Ms. Kaptur. Thank you, Mr. Chairman.
    Mr. Surash, you stated in answer, in a dialogue with 
Congressman Simpson, that one of the reasons for delay was that 
in the vessels the subcontractor could not do it and there was 
a two-year delay associated with it and obviously with a two-
year delay of cost. All right. How is it possible--that goes 
back to my question of is the problem scientific? Is the 
problem engineering? What was the problem there? If we just 
look at that one little keyhole on why this project has had 
such overruns, what happened?
    Mr. Surash. Ma'am, I think this concerns the state of the 
nuclear supply chain in this country. The prime contractor did 
an adequate job of attempting to find qualified subcontractors 
to fabricate and deliver the vessels. They awarded a 
subcontract, and, after a certain amount of time, this 
contractor was not making sufficient progress so they fired the 
subcontractor and went out and found a second subcontractor who 
eventually did a fine quality job.
    Ms. Kaptur. In this country?
    Mr. Surash. Yes, ma'am. I believe in Pennsylvania. But the 
sum total delay on this project from when the first 
subcontractor was supposed to deliver to when the vessels 
eventually arrived, very unfortunately, was two years.
    Ms. Kaptur. Was it that the first contractor could not 
handle the size of the vessel or the type of metal or composite 
or whatever it was?
    Mr. Surash. I would say it was inability to do the quality 
work in the timeframe that we needed it. The second 
subcontractor----
    Ms. Kaptur. Why did it take the prime contractor two years 
to figure that out?
    Mr. Surash. It actually took a much shorter time because a 
lot of this was the fabrication time. But even the second 
contractor did not deliver to what they signed up to. So the 
good news is we got high quality vessels that are installed in 
the building today and everything looks very good. And the cost 
was okay. But the bad news part of that is even the second 
subcontractor was not able to provide timely delivery. And what 
we had to do on that project is essentially build the building 
around the missing vessels and actually crane them in through 
the roof. So the prime contractor and the construction manager 
did the best job they could to make up for this, but it ended 
up causing quite an increase and a delay.
    Ms. Kaptur. Could I ask each of you from the accounts that 
you look at, what is the worst project that is in the old 
category that started before you got there in terms of cost 
overruns?
    Mr. Bosco. I guess I do not think anyone is going to be 
surprised by my answer. That would have to be the Waste 
Treatment Plant. And that causes me the most concern because we 
still have to wrestle with outstanding technical issues. MOX 
and Salt Waste, we have figured those out. We have got those 
technical issues figured out, but WTP, we have got to figure 
out those technical issues. And then the process is gain 
acceptance of those technical issues with our external 
stakeholders to include DNFSB, incorporate those into new 
designs, cost those out, establish a new baseline. So I am most 
concerned with WTP.
    Ms. Kaptur. Is that scientific in nature?
    Mr. Bosco. I think the current problem has some scientific 
nature because it really gets to fluid mechanics. And so in 
that regard I think Secretary Chu is taking the exact right 
position to insert some of our best and brightest in those 
fields to help figure this technical issue out.
    Ms. Kaptur. What is the total cost overrun at this point?
    Mr. Bosco. I wish I could answer that. I just will not know 
until we understand the technical issue and then the redesigns 
that will be required.
    Ms. Kaptur. But based on the original budget submission 
versus the current budget submission, what is the difference? 
Just subtract the current from the past.
    Mr. Bosco. Yes. So from my official records the project, 
and there will be others that will go back even further, it was 
baselined in 2003 at $5.7 billion. We are currently with a 
baseline change at effectively $12.3 billion, which was 
baselined in December 2006. The number I am unable to provide 
at this time is what will it cost. And that is what is still 
being--
    Mr. Frelinghuysen. Will the gentlewoman yield?
    Ms. Kaptur. I will.
    Mr. Frelinghuysen. When would we anticipate the number?
    Mr. Bosco. I will defer to my colleagues from EM. They are 
still putting together, and working with the secretary on the 
technical issues.
    Mr. Surash. Sir, I cannot project an exact date. We need to 
let the technical review complete so that we understand and 
mature the technology and mature the design. We want to follow 
some of the steps that you have been hearing about because we 
cannot be trying to construct a facility with the design still 
changing.
    Mr. Frelinghuysen. We did plenty of that before. We do not 
want to do that again.
    Mr. Surash. Yes, sir. Absolutely.
    Mr. Frelinghuysen. But it is in the offings, some sort of a 
number?
    Mr. Surash. I am not able to give you a projection, sir, at 
this time, but we want to get the technology resolved.
    Mr. Frelinghuysen. Ms. Kaptur.
    Ms. Kaptur. Thank you, Mr. Chairman.
    I just wanted to say that is such an extraordinary change 
from where it started to where it is today and where it might 
go. Having served on the NASA Subcommittee for many years and 
understanding the difficulty of an agency, it sounds to me like 
the cost overrun here or underestimate will equal NASA's annual 
budget. That is just an extraordinary figure. And I think it 
would behoove all of us to go back and deconstruct at every 
point what happened in terms of the estimates. And, you know, 
Mr. Chairman, I am not a nuclear scientist, but maybe we are 
trying to do something here we do not know how to do and we are 
spending a lot of money. If it is a research project, let us 
call it a research project. But to put product in the ground 
with these kind of cost overruns, looking at everything else in 
this budget that we have to cut, having this open-ended 
bleeding wound out there that just keeps taking more and more 
of our allocation in this Subcommittee is very, very troubling 
to me. I have to be very straightforward and state that.
    And I wonder if you could provide for the record--maybe you 
already have and I just do not have it in my notebook--but for 
the Waste Treatment Plant, the MOX facility, and the Salt Water 
Processing, the baseline originally, and then what happened in 
every year, how much it kept getting kicked up. And could you 
provide for the record the main contractors on those projects, 
please?
    Mr. Bosco. We can.
    Mr. Surash. Yes, ma'am. And ma'am, may----
    Mr. Frelinghuysen. Jump in.
    Mr. Surash. I just, and we will be providing this for the 
record, but I just want to say at this time there is also a 
scope increase between the one baseline that Paul mentioned and 
the 12.3. So we will provide that for the record. So we are not 
comparing a plant with the same capacity at the 4, the 5, and 
the 12.3. There is an increase in what it will be able to 
accomplish. But we will provide more details for the record, 
ma'am.
    Ms. Kaptur. Well, at this point I do not even believe it 
can accomplish what the testimony says it might with that kind 
of cost overrun. Scientifically, I am not assured. So maybe 
others are but I am not very confident at this point.
    Thank you very much.
    Mr. Frelinghuysen. Okay, thank you, Ms. Kaptur.
    Mr. Nunnelee, let us get a last question for this round and 
then we have the next panel. Mr. Nunnelee.
    Mr. Nunnelee. Thank you, Mr. Chairman.
    I am just interested in your planning for sequestration, 
particularly the six months leading up to sequestration. When 
did you start planning for it? How did you go about making the 
decisions and what criteria did you use for those decisions?
    Mr. Surash. I will give it the first try.
    Sir, the sequestration was pretty mechanical because there 
was, you know, for us in the Office of Environmental Management 
we have 32 control accounts. Our budget is across 32 different 
control accounts, and sequestration, as you are aware, was a 
mechanical reduction in each of those control accounts. So we 
were obviously looking at those control accounts and what the 
impacts would be. And for instance, for the Waste Treatment 
Plant there are two control accounts involved there. We know we 
have an imbalance and that will require a reprogramming. And we 
are going to be bringing that forward, sir.
    Mr. Raines. So for us in the NNSA, we saw that 
sequestration might occur. Every month I review how our 
projects are performing. Do we have contingencies left on those 
projects and are they underrunning or do we need all the money 
that is available? So we put together a portfolio of all of our 
active projects and saw where we might be able to have an 
asset. And I checked with the CFO staff to see if the anomaly 
that we had in the continuing resolution would allow us to 
shift money from projects that were underrunning to projects 
that might take a cut that would cause us to increase the cost. 
And so that was the planning effort that we took into account, 
sir.
    Mr. Bosco. Sir, and I had no direct play as an oversight 
function in the Department.
    Mr. Nunnelee. Thank you.
    Mr. Frelinghuysen. Thank you, Mr. Nunnelee. Gentlemen, 
thank you very much for your testimony this morning. I 
appreciate your work and we encourage you to work even harder 
to achieve your objectives. We appreciate it. Lots of 
milestones to reach here. We appreciate your work. Thanks.
    Mr. Bosco. Thank you.
    Mr. Raines. Thank you.
    Mr. Surash. Thank you, Mr. Chairman.
    Mr. Frelinghuysen. Well, gentlemen, good morning.
    Mr. Trimble. Good morning.
    Mr. Frelinghuysen. Take your seats. I was watching you very 
closely to see you shifting in your seats as the other panel 
responded to our questions. I know you wanted to lean over and 
volunteer some of your own perspectives and now you are going 
to have a chance to do that.
    Let me briefly reintroduce our guests and thank you all for 
coming. Mr. David Trimble, director of Natural Resources and 
Environment for the Government Accountability Office. Welcome. 
Nice to see you again.
    Mr. Trimble. Thank you.
    Mr. Frelinghuysen. Mr. Mike Ferguson, chief cost 
engineering, Huntington District, U.S. Army Corps of Engineers. 
Mr. William Eckroade, Principal Deputy Chief, Office of Health, 
Safety, and Security is where? He must be on some sort of a 
security assignment we are unaware of here. I do not know. It 
has fallen by the wayside.
    Mr. Trimble, I guess you are first out of the box. Thank 
you very much for being here.
    Mr. Trimble. Mr. Chairman, Ranking Member Kaptur, and 
members of the Subcommittee. Thank you for the opportunity to 
speak with you today.
    Mr. Frelinghuysen. Move that mic up a little closer. 
Thanks.
    Mr. Trimble. My testimony will focus on DOE's efforts to 
improve contract and project management and preliminary 
observations from our ongoing review of NNSA's Plutonium 
Disposition Program, including the ongoing construction of MOX 
and its sister facility, the Waste Solidification Building 
(WSB).
    Since 2009, DOE has taken a number of steps to improve its 
management of major projects, including: updating its program 
and project management policies and guidance; requiring peer 
reviews and independent cost estimates for projects over $100 
million, and requiring design work for NNSA projects to be 90 
percent complete before construction.
    In 2012, we issued two reports examining EM and NNSA non-
major projects, those costing less than $750 million. Our work 
found evidence that DOE's reform efforts were beginning to 
improve the management of non-major construction projects. In 
2013, noting these improvements and the continued commitment of 
DOE's senior leadership, we narrowed the focus of our high-risk 
designation to major contracts and projects.
    While DOE's actions to improve project management are 
promising, their impact on meeting cost and schedule targets 
for major projects is not yet clear. All of DOE's ongoing major 
projects began before these recent reforms were instituted and 
these projects continue to experience significant cost 
increases and schedule delays. WTP has tripled in cost to $13.4 
billion with a decade added to its schedule. UPF costs have 
increased sevenfold to $6.5 billion with 11 years added to the 
schedule. CMR costs have increased nearly sixfold up to $5.8 
billion with a total delay counting the deferral announced last 
year up to 12 years.
    Our ongoing review of MOX and WSB has found similar 
problems, and highlights the need for continued efforts by DOE 
to improve contract and project management. The contractor for 
the MOX facility currently estimates the cost will increase 
from $4.9 to $7.7 billion with a three-year delay in the start 
of operations. With regard to WSB, DOE recently approved a 
revised project baseline to increase the cost from $345 million 
to $414 million with a two-year delay in the start of 
operations.
    I should note that WSB is a non-major project and 
illustrates why our 2013 high-risk update stated that though we 
have shifted our focus to major projects, we will continue to 
monitor non-major projects to ensure that progress is 
sustained. As this Committee requested, we are currently 
examining what factors drove these cost increases. Preliminary 
observations from our work include the following:
    One of the primary reasons for the cost increase at MOX is 
reportedly due to inadequately designed critical system 
components, such as glove boxes used for handling plutonium. 
The contract baseline for MOX predates NNSA's 2012 guidance to 
set baselines only after design work is 90 percent complete. As 
part of our ongoing work, we are evaluating the potential 
impact this guidance might have had on mitigating these cost 
increases and scheduled delays.
    According to NNSA, the MOX project misjudged the ability of 
the industry to deliver nuclear-quality components to meet the 
project schedule. Under the terms of the MOX contract, the 
contractor was required to submit market reports to identify 
whether the availability of labor, materials, and equipment 
might affect this cost or schedule. As part of our ongoing 
work, we plan to examine the extent to which the contractor or 
DOE assessed market conditions.
    Our ongoing review will also examine the cost and schedule 
implications of the decision to expand the scope of the 
contract to include capability previously planned for the 
canceled pit Disassembly and Conversion Facility.
    In 2011 and 2012, NNSA peer reviews of MOX and WSB 
identified concerns regarding installation rates for equipment 
and recommended that realistic installation rates be included 
in the cost estimate. We are examining the extent to which any 
actions were taken in response to these reviews.
    And finally, NNSA developed the lifecycle cost estimate for 
the entire Plutonium Disposition Program, but it has never been 
reviewed by an outside entity. We plan to examine this estimate 
and the steps NNSA is taking to validate it.
    In closing, let me note that the recurring nature of these 
problems resembles DOE's longstanding difficulty in sustaining 
security reforms and integrating security as part of its core 
mission. And like security, the culture of the agency seems to 
play a role.
    So in looking at why more progress has not been made, it is 
important to focus on both actions taken and actions not taken 
that seem to undermine the agency's efforts to reshape its 
culture. For example, DOE rescinded its cost estimating policy 
in the 1990s and it has never been replaced. In 2010, DOE 
accepted the importance of independent cost estimates but then 
required them for only one of three critical decision points. 
Each of these decisions was both a product of the agency's 
culture but also an event which helped to sustain that same 
culture. To change the current equation, DOE must ensure that 
all, not just some of its decisions, send a clear message on 
the importance of its reform efforts.
    Thank you, and I would be happy to answer any questions.
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    Mr. Frelinghuysen. Thank you, Mr. Trimble.
    Mr. Ferguson, good morning. Thank you for being here.
    Mr. Ferguson. Mr. Chairman and distinguished members of the 
Subcommittee, I am honored to be here testifying before the 
Subcommittee today on behalf of the U.S. Army Corps of 
Engineers regarding interagency support provided to the 
Department of Energy.
    My name is Mike Ferguson. I am chief of the Cost and 
Technical Support Branch in the Huntington District. Also with 
me is James Dalton, the chief of the Engineering and 
Construction Division at Corps Headquarters.
    The Corps has historically provided cost engineering 
support to DOE through interagency agreements. Such support 
includes independent cost estimates, schedules, risk analysis, 
cost estimate reviews, assessments, validations, and project 
controls. Key interagency support efforts that the Corps has 
provided to EM are the Best-in-Class Project and Contract 
Management Initiative, the Project Management Partnership, and 
detailed staffing plan for the four EM capital construction 
projects. Support for NNSA includes independent cost estimate 
for the Uranium Process Facility Project, and current support 
for APM includes independent cost estimate development for the 
MOX Oxide Fuel Fabrication Facility and the Salt Waste 
Processing Facility Project.
    The Y-12 Project Management Team Site Assessment Office 
requested the Corps of Engineers prepare an independent cost 
estimate for the Uranium Process Facility in November 2009. The 
purpose was to assist the Uranium Process Facility's federal 
management team to determine the reasonableness of the 
management and operating M&O contractor's cost estimate 
schedule for the project. The Uranium Process independent cost 
estimate results were $7.386 billion and a completion date of 
March 2026. In the fall of 2010, the Corps performed a 
reconciliation of our estimate to the M&O contractor's estimate 
for the UPF project as requested by NNSA in order to understand 
where the two differed and why. The variation was approximately 
27 percent and was driven by differences in estimating 
methodology, assumptions, and approach.
    In February 2011, the Corps updated the estimate per the 
findings of the reconciliation where it deemed appropriate. The 
updated estimate was then fit to a constrained funding profile 
provided by DOE in August of 2011, which resulted in a total 
cost of $10.746 billion and a project completion in April of 
2035 at the 85 percent confidence level.
    In April 2012, APM tasked the Corps to develop a rough 
order of magnitude estimate for the accelerated construction of 
the Uranium Process Facility Project to support DOE's CD-1 
reaffirmation process. The Corps updated the revised uranium 
process base estimate from the February 2011 for the 9212 
building capabilities deferred for a total cost of $5.581 
billion and a completion in May of 2027.
    In February of 2007, the EM requested interagency support 
for the Corps of Engineers aimed at developing Best-in-Class 
project and contract management capabilities for all EM sites. 
EM developed a five-phase approach to accomplish this goal with 
support from the Corps. Phase 2 of this assessment of 16 EM 
sites was performed in 2007 and evaluated the strengths and 
weaknesses in 12 key project management capabilities and three 
contract management benchmarks.
    In October 2009, the Corps and EM transitioned from the 
Initiative into the Project Management Partnership. Under the 
Project Management Partnership, the Corps has continued to 
support EM. Per EM's request, the Corps has provided in-house 
construction and project management expertise and awarded two 
engineering and construction management AE support contracts.
    Working under the partnership with EM in May 2010, the 
Corps was requested to develop results-driven, activity-based 
detailed staffing estimate for four capital construction 
projects. These estimates specifically function position types, 
composition, and number of staff required for the management 
and oversight of the following four EM projects: the Waste 
Treatment Plant at Hanford, Washington; Salt Waste Process 
Facility at Aiken, South Carolina; Uranium-233 Downblend 
Project in Oak Ridge, Tennessee; and the Eastern Tennessee 
Technology Park in Oak Ridge, Tennessee.
    The results of this detailed staffing estimate for these 
projects were developed to be reasonable, traceable, credible, 
defensible, and support DOE-EM Human Capital Management Plan.
    In closing, I would like to thank our partners and the 
Department of Energy for requesting and utilizing interagency 
support from the Corps. The Corps appreciates the opportunity 
to serve the Department of Energy in support of the ongoing 
mission.
    Thank you, Mr. Chairman, and members of the Subcommittee. 
That concludes my statement. I will be happy to answer any 
questions.
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    Mr. Frelinghuysen. Thank you, Mr. Ferguson.
    Mr. Eckroade, welcome.
    Mr. Eckroade. Thank you. I would like to thank you for the 
opportunity to be here today to discuss the Office of Health, 
Safety, and Security or HSS's role in overseeing the 
Department's nuclear operations, including nuclear projects.
    HSS as a staff office reports directly to the Office of the 
Secretary, and on behalf of the Secretary we undertake policy 
development, technical assistance, training, independent 
oversight, and regulatory enforcement activities in the areas 
of safeguards and security, classification, occupational safety 
and health, and nuclear safety.
    In the Department, contractors design, build, and operate 
our nuclear facilities. DOE is the owner and safety regulator 
of these facilities and has a comprehensive set of regulations, 
policies, and technical standards that guide our contractors in 
these important duties. Effective oversight of contractor 
operations is an integral part of the Department's 
responsibilities as a self-regulatory agency. Essentially, it 
provides assurance to its leaders, to its workers, and to the 
public of a safety posture.
    DOE line organizations, such as NNSA and EM have the 
primary responsibility for ensuring existing nuclear facilities 
and new nuclear projects meet the Department's safety 
expectations. They oversee all aspects of the design, 
construction, ultimately approve the safety basis, and 
authorize the operations. HSS has an important complementary 
role in ensuring that safety is appropriately considered in 
facility design and construction and that operations during the 
life of the facility meet DOE safety requirements. Independent 
oversight of nuclear safety continues to be one of HSS's 
highest priorities.
    Reforms that were implemented in the Department beginning 
in 2010 and very much consistent with the recommendations from 
GAO on improving independent oversight of nuclear safety have 
indeed enhanced HSS's oversight of nuclear operations. Let me 
just go through a couple of the enhancements. One of the things 
that we did was increase the transparency of our regulatory 
process by making all oversight reports available online. We 
enhanced our nuclear safety capabilities through recruitment of 
senior-level technical staff. And we refocused our oversight in 
the area of safety on the highest risk nuclear facilities 
including projects.
    Our oversight of nuclear projects focused primarily on the 
safety basis and facility design, quality assurance, 
construction quality, and ensuring readiness for start-up and 
project turnover for operations.
    We prioritize oversight using a sampling strategy that 
considers facility hazards, the complexity of past project 
performance, and the status of design and construction. One 
area of particular focus I like to note is as directed by the 
Secretary, HSS performed a series of evaluations of safety 
culture at selected nuclear projects, first at the Waste 
Treatment and Immobilization Plant (WTP) in response to 
indicators of safety culture concerns and then to determine the 
extent of condition at the Department's other large projects, 
and even looked at safety culture at a few other areas in 
operations. We have learned much from these assessments and 
have a better understanding of how much work remains to 
establish a healthy safety culture. In essence, we recognize we 
are at the beginning of a very long journey.
    In response to reporting requirements established and 
promoted by the Subcommittee, last month we published our first 
annual independent oversight report. The report documents our 
strategies for conducting oversight, progress and transforming 
the organizations building the necessary skill sets, and 
summarized the many activities completed in 2012.
    We appreciate the Subcommittee's continued focus on the 
Department safety program, the safety of large, nuclear 
projects, and on HSS's independent oversight program.
    Mr. Frelinghuysen. Thank you, Mr. Eckroade.
    Mr. Trimble, front and center. Nobody wants to be on the 
High-Risk List.
    Mr. Trimble. You are hurting my feelings.
    Mr. Frelinghuysen. We know that GAO continues to look at 
hopefully every project, right?
    Mr. Trimble. Yes, absolutely.
    Mr. Frelinghuysen. Operations and maintenance. But there is 
a view that have some projects been dropped off the High-Risk 
List? What is the criteria for dropping people and projects 
off? Are these the small projects?
    Mr. Trimble. Yes. So broadly what we have done with the 
Department of Energy is narrowed the focus to the major 
projects because the progress we have seen and because that is 
where most of the money is. We are going to keep paying 
attention to see----
    Mr. Frelinghuysen. You are?
    Mr. Trimble [continuing]. On the non-majors. Absolutely.
    Mr. Frelinghuysen. So you are not giving a clear bill of 
health to all those small projects, are you, since we noted at 
least one at Los Alamos that continues to have some problems. 
Is that not right?
    Mr. Trimble. Absolutely.
    Mr. Frelinghuysen. Which is a pretty important one.
    Mr. Trimble. As well as the waste Solidification Building.
    Mr. Frelinghuysen. Security, right?
    Mr. Trimble. Yes. And waste solidification building as 
well. So the key for removal from the High-Risk List is you 
have to demonstrate through independent means that the reforms 
you have made have been sustained, and they have achieved the 
objectives they set out to be. So one of the things we have to 
do over time is just to monitor them to make sure that the 
changes we have noted which have seemed to prove results 
continue to prove results.
    Mr. Frelinghuysen. Yeah. So you are intimately familiar 
with all these milestones that have been set. The terminology 
changes every couple of years but you are intimately familiar 
with all these?
    Mr. Trimble. I have got my cheat sheets, too.
    Mr. Frelinghuysen. You do? So the wording may change but in 
reality we want everybody to measure up.
    I want to get a little bit of a clarification here. If you 
are looking at larger projects, are you looking because of the 
size obviously? What is more important, the size or the 
contractual mechanisms?
    Mr. Trimble. Well, in the context of high-risk and the 
definition of major versus non-major, the threshold is $750 
million, and that comes from DOE. That is DOE's definition of 
how they distinguish between major and non-major projects.
    Mr. Frelinghuysen. So the contract mechanisms exists on all 
contracts; right?
    Mr. Trimble. That is correct.
    Mr. Frelinghuysen. And is it less important in smaller 
projects?
    Mr. Trimble. No. I mean, the contract on a $500 million 
project, the contract mechanism, the oversight tools, et 
cetera, are critical, obviously.
    Mr. Frelinghuysen. How would you characterize the progress 
that GAO has made in terms of implementing your 
recommendations?
    Mr. Trimble. Well, I think DOE, especially in the last few 
years, has made significant improvements, as I mentioned in my 
statement, in terms of issuing policies, taking steps to 
institute the 90 percent design criteria, outside independent 
reviews, greater use of independent cost estimates. So all of 
those are significant and important steps.
    Mr. Frelinghuysen. Are not some of these very problems 
happening again and again?
    Mr. Trimble. Well, our concern with regard to major 
projects is that we see the recurrence of these cost and 
schedule problems.
    Mr. Frelinghuysen. Even in the responses that you 
witnessed.
    Mr. Trimble. Absolutely.
    Mr. Frelinghuysen. I will not say some hesitation but--
    Mr. Trimble. No, absolutely.
    Mr. Frelinghuysen. Not a lot of clarity here.
    Mr. Trimble. We are waiting for the proof in the pudding.
    Mr. Frelinghuysen. Yeah. I mean, the establishment of 
baselines.
    Mr. Trimble. Exactly.
    Mr. Frelinghuysen. A lot of moving targets around here.
    Mr. Trimble. Exactly.
    Mr. Frelinghuysen. Does that not concern you?
    Mr. Trimble. Oh, absolutely.
    Mr. Frelinghuysen. This is what you focus on; right?
    Mr. Trimble. Absolutely. And we have ongoing work on all of 
these major projects, and we continue to uncover disturbing 
patterns.
    Mr. Frelinghuysen. Well, are you noticing any particular 
trends?
    Mr. Trimble. Well, areas----
    Mr. Frelinghuysen. You know, good ones or bad ones?
    Mr. Trimble. Well, I mean, I think what we have noted----
    Mr. Frelinghuysen. We do not want things to be buried in 
new terminology.
    Mr. Trimble. Yes, absolutely.
    Mr. Frelinghuysen. That is why we have the GAO. It is 
supposed to root any of that out.
    Mr. Trimble. That is right. I think some of the issues we 
have uncovered are items you have discussed earlier about 
design maturity, technology readiness. Those are continuing 
issues. Obviously, you see that with WTP as an ongoing problem 
behind their concerns there, but we also found that in terms of 
MOX in terms of the design of the glove boxes to handle 
plutonium.
    Mr. Frelinghuysen. Are you keeping an eye on the Army Corps 
that is sitting next to you as well?
    Mr. Trimble. They are in our building. We are one floor 
away.
    Mr. Frelinghuysen. Well, I know that.
    Mr. Trimble. I am sure they keep an eye on us.
    Mr. Frelinghuysen. I am just saying that you are all in 
there together.
    Mr. Trimble. Yes.
    Mr. Frelinghuysen. But obviously the Committees, one of our 
major jurisdictions is the U.S. Army Corps of Engineers. And we 
obviously salute their work here at home and abroad, and 
obviously have a particular responsibility for the nuclear 
enterprise. But you keep an eye on them as well?
    Mr. Trimble. Well, we have another group that does work, 
particularly on their projects.
    Mr. Frelinghuysen. I mean, independent, like Mr. Eckroade.
    Mr. Trimble. Yes. We do a lot for----
    Mr. Frelinghuysen. An independent evaluation of some of 
their cost estimates here.
    Mr. Trimble. Absolutely.
    Mr. Frelinghuysen. They are in this business, too, here.
    Mr. Trimble. Yes. I believe it is another part, another 
team within GAO that does our----
    Mr. Frelinghuysen. Just because you are in the same 
building you do not necessarily cut them any slack. Is that 
right? Just say that for the record.
    Mr. Trimble. No. No. I will not even let them buy me 
coffee.
    Mr. Frelinghuysen. Good. I am very glad to hear that.
    Ms. Kaptur.
    Ms. Kaptur. Thank you, Mr. Chairman.
    Mr. Trimble, you strike me as a man with a rigorous eye. 
How often do you see cost misestimates and overruns such as you 
note with the DOE major projects?
    Mr. Trimble. So how often do we see that? I mean, I think 
on all of the major projects we have looked at, we have seen 
it.
    Ms. Kaptur. But in other agencies, how significant is the 
overrun in DOE compared to----
    Mr. Trimble. You know, I have not done or I do not think we 
have done any direct comparison I know between the two.
    Ms. Kaptur. I have never seen it at the VA. I have never 
seen it at HUD. I have never seen it at NASA. I have never seen 
it at NSF. I look around at all of the departments, EPA. These 
are mammoth. So they are pretty atypical would you not think 
across the federal agencies--now, Defense is another question, 
but even there DOE is a lot smaller than the Department of 
Defense. These are pretty significant.
    Mr. Trimble. These are very significant, and again, I think 
as you alluded to, the numbers are staggering.
    Ms. Kaptur. The numbers are staggering. And, you know, I 
keep asking myself is this a research project or is this just a 
preprocessing project or a storage project? We heard earlier 
there are problems with the nuclear supply chain, et cetera. I 
am asking myself what can we do to hasten the completion of 
whatever it is we are trying to complete here on schedule and 
under budget. And I did not get a lot of confidence from the 
prior panel, first on what end we are attempting to reach here, 
and that we can actually complete segments of it on time and 
within budget or under budget. I just wonder if we are mixing 
science and construction in a way that we cannot win; that we 
are going to fail from an accounting standpoint. Do you have 
any views as you have gotten into their accounts, as you look 
at this, is there something that we are not seeing here or is 
it just internal disarray inside of DOE?
    Mr. Trimble. Yeah. I mean, I think, you know, some of it 
with WTP in particular. That is sort of the poster child for 
starting construction on a fast track when the design is not 
complete. And so that seems to be sort of we keep paying the 
bill for those mistakes from the past, and as well as decisions 
to keep moving forward when design is not complete.
    You saw that same failure or I think we are seeing the same 
failure. Our work is still pending at MOX in terms of the glove 
box design. So that is an area. One thing we have not talked 
about a little bit in terms of areas of focus is that there is 
a lot of discussion of these peer reviews, et cetera, and these 
controls they are putting in place to put a check on it. The 
question that we are looking at in our ongoing work is what is 
the effectiveness of those controls? So you could have a flag 
go off. You can have a light on your dashboard go off but you 
can ignore that light. Your engine light goes on, you can just 
never take it to the mechanic, right? So the question is when 
these systems--are the lights going off first of all? You have 
a system. Does the light go off when it is supposed to go off? 
And then what do you do about it?
    So, for example, with the Waste Solidification Building, in 
2008 there is an independent review that says what you are 
estimating for this cement work, this concrete work, is way 
off. You are saying it is $60 million; we think it is going to 
be 110 million. They do not change anything. Well, guess what? 
When they put the contract out for bid it is in the 90s. So 
then all of a sudden you are behind. And then that accounts for 
a big chunk of their latest cost increase.
    So the question is you can have great processes, and this 
sort of goes to your question about culture. You can have 
controls, but if your organization culture does not respect and 
act support every day those controls and those objectives, it 
does not matter how good your controls are, your culture will 
defeat it every time.
    Ms. Kaptur. As you listened to the prior panel, what did 
you think we as a Subcommittee could do to get better results, 
especially on the three projects that are so expensive if, in 
fact, we are going to complete them?
    Mr. Trimble. Yeah. I wish I had a magic bullet. I mean, I 
think a few things are: (1) for all the projects, capital asset 
projects, getting more detail on technology and design 
readiness; whether outside reviews have looked at those 
readiness figures. Have they been independently verified and 
checked? I think if any of them have technology development 
ongoing--you talked about technology readiness levels, getting 
behind that to say, well, you are saying it is at 5, you are 
saying at 6. How is that verified? What is behind that? What is 
the schedule for that? And I think for all of these projects, 
the consistent problem we have seen in all these projects has 
been the seismic concerns which inevitably pop up late. So up 
front, tell me now, it is not going to be news to anybody that 
there are seismic issues. So what are we doing with it now? I 
think the effectiveness of the project reviews, one area----
    Ms. Kaptur. Effectiveness of the?
    Mr. Trimble. Project reviews. So when you have these 
outside reviews, you know, my analogy is the concern is always 
that you are basically hiring an outside audit firm to do your 
weekly payroll. Right? It is like you are doing these outside 
concerns. Well, what are your controls to make sure you are 
making the right decision? If you are always waiting for this 
outside group to bail you out, to flag the problem, you have a 
failure elsewhere. So how good are those controls versus these 
independent audits.
    Ms. Kaptur. Is it your sense inside the Department that 
there is a rigorous organizational structure to deal with these 
three projects and that there is the kind of discipline that 
you have in the nuclear Navy?
    Mr. Trimble. I cannot speak to the Navy. I am one of the 
few people in this room apparently that does not have a Navy 
background.
    The reforms they have been putting in place are 
significant. Their leadership is committed. They are making a 
lot of the right steps. But again, this is a long slog and my 
comment about culture is this is not a matter of just fixing 
this policy or this guidance. You need to be sort of committed 
24/7 to this and you cannot mix your messages about the 
importance of this.
    Ms. Kaptur. Mr. Chairman, I would just say----
    Mr. Frelinghuysen. Can you yield on that? It is an issue of 
who is in the driver's seat here. Is the leadership there? Is 
it willing to challenge the culture? It is inexcusable that 
some of these costs have just--somebody should have known what 
was going on.
    Mr. Trimble. But then you have to figure out how you are 
carrying that message to the lowest ranks at the frontline and 
then to the contractor community as well.
    Ms. Kaptur. What I am wondering, Mr. Chairman, is if you 
look at the space station, if you look at some of the other 
projects we have worked on where billions of dollars are 
involved, how NASA organized for that effort internally and the 
kind of organizational structure and discipline that was a part 
of it. With DOE, they are doing a lot of other things. But how, 
and I guess I would ask you as an accountant, you studied both 
numbers and you studied management structure. If you could make 
recommendations to us on management structure within DOE to 
accomplish these tasks so we can meet the budget, I keep 
hearing culture, culture, culture. Well, that is a management 
accounting issue. And are they properly organized in there to 
accomplish the task at hand? Any additional comments you could 
provide now or to the record?
    Mr. Trimble. Yeah. I would have to go back to our past work 
to have an intelligent answer on that. I do not really have one 
now. I do not think we have done recent work specifically on 
this structure. But I would be happy to take that for the 
record.
    Ms. Kaptur. Thank you.
    Mr. Frelinghuysen. Mr. Nunnelee.
    Thank you, Ms. Kaptur.
    Mr. Nunnelee. Thank you, Mr. Chairman.
    NNSA and EM both have reported. Okay, you are building 
these one-of-a-kind projects. And because of that, progress has 
been impeded because of the lack of availability of vendors 
that can produce at a much higher standard.
    So I guess my first question is should this not have been 
expected by now? We did not just start doing this. And 
secondly, do you see any indication that the Department of 
Energy is doing anything to actively manage the problem?
    Mr. Trimble. Well, I would jump in on that. Just taking 
again MOX, the contractor hired was the foremost world expert 
on nuclear construction and handling these very specific kind 
of facilities. So the experience and being surprised by it you 
would not expect them, of all people, to be surprised by it. 
Moreover, as I alluded to, there was a provision in the 
contract to do market surveys on the very things we are talking 
about--labor, materials, et cetera, in order to meet the 
contract. We are looking at, again, they had a good control but 
what happened to it? Were the reports submitted? Right now we 
are having trouble finding them. So the question is, and again, 
it goes to culture. You have got a requirement. Did the people 
managing it respect that requirement and act on it? And so if 
you had had those reports in 2007 and you flagged these 
concerns would you have been able to do other course 
corrections?
    Mr. Nunnelee. So what kind of capabilities did the DOE 
contractors who asked to build these have to address on this 
issue? Have there not been some specific actions taken by some 
of the contractors, like sending personnel out to vendors that 
have led to improvements in certain cases?
    Mr. Trimble. I do not have a lot to say on that from our 
recent work, but I believe that is right. I believe it is more 
of the tactical responses to these issues.
    Mr. Frelinghuysen. Mr. Fleischmann.
    Mr. Fleischmann. Thank you, Mr. Chairman. And I do 
appreciate the discourse about all the cost overruns. We 
certainly want to be more fiscally wise and efficient as we 
move forward in all these large projects, including the UPF 
which is in my district.
    I am going to change direction a little bit. Mr. Trimble, I 
have noticed that the Department of Energy is using the Corps 
of Engineers to perform contract work, building an access road 
at UPF. Does the GAO believe that using the Corps of Engineers 
to do preliminary work is a smart strategy, sir?
    Mr. Trimble. We have not formally addressed sort of the 
decision and whether it was a good decision or was a bad 
decision. I can tell you that we visited the site a few weeks 
ago and the assessment at the time was that the Corps could do 
the job, I think, better and cheaper than outside contractors 
because it was the kind of project that is right in their 
wheelhouse.
    Mr. Fleischmann. Okay. And you still believe that?
    Mr. Trimble. I am just telling you what they told us, and 
it seems reasonable.
    Mr. Fleischmann. Okay. Mr. Ferguson, what kind of support 
has the Corps given NNSA and EM over the past three years? And 
as a follow-up to that, sir, what are the Corps' future plans 
in this regard?
    Mr. Ferguson. In the last three years we did the Best of 
Class Project Management Initiative, which assessed the 
capabilities of Environmental Management's office, site office 
for complying with project management key components with the 
staff and did a gap analysis of each site and determined that 
they were understaffed at that time in key areas--project 
management, cost estimating, and scheduling. We made 
recommendations to support their human capital plan to get the 
right people in the positions to manage their projects.
    We then did detailed staffing plans for their major 
projects and the detailed staffing plan resulted in us 
providing that on the construction management side of the 
house; they needed to beef up their structure management. It is 
really the ground truth. Their contractors' reporting systems 
earn values and have construction oversight, more construction 
oversight at the site.
    The next one is at the UPF. We provided independent cost 
estimates for the Uranium Process Management. We wanted to get 
an independent look before they baselined the project. We went 
in, and from the bottoms-up detail, did an independent cost 
estimate for them to see what the cost would be, what the range 
of costs would be at an 85 percent confidence level and to help 
them determine the fairness and reasonableness of M&O's 
contractor there.
    We are in the process of working with the Department of 
Energy to rebaselining MOX and the Salt Waste Treatment 
Facility.
    Mr. Fleischmann. So those are your future plans?
    Mr. Ferguson. That is the future plan.
    Mr. Fleischmann. Okay.
    Mr. Frelinghuysen. Would the gentleman yield?
    Mr. Fleischmann.  Yes, sir.
    Mr. Frelinghuysen. Did you have any sense whether the 
contractor had the capability to conduct an accurate cost 
estimate?
    Mr. Ferguson. The contractor has a different methodology 
and different way to develop their cost estimate from 
reconciliation of the estimate with ours, but we did not assess 
to determine the reasonableness of the M&O contractor. We 
supported that data to the Department of Energy.
    Mr. Frelinghuysen. So they had the data or not had the 
data? Did they have the data? The proper data?
    Mr. Ferguson. Yes.
    Mr. Frelinghuysen. Did it match your data?
    Mr. Ferguson. The M&O did a cost estimate based on 
historical data, and the level effort type work for the Uranium 
Process Facility and had an estimate where we did a bottoms-up 
estimate detailed off the 40 percent design. We then 
crosswalked it to see where the difference was in the estimates 
and then revised our estimates and furnished that to the 
management team at the Uranium Process Facility on site.
    Mr. Frelinghuysen. So translating that into a way that I 
can understand, what does that actually mean?
    Mr. Ferguson. That means that the----
    Mr. Frelinghuysen. I know that the Corps, as you said, is 
results-driven, but getting back to Mr. Simpson's earlier 
admonition, let us focus on what is important--on time, on 
budget. And your estimates are?
    Mr. Ferguson. The estimate we provided is a risk-based, 
managed estimate. We feel that the 40 percent design, which is 
not the performance baseline yet, is a good gauge. It gives 
support to the YSO management team. What to focus on are the 
key issues to implement that project within schedule and within 
cost.
    Mr. Frelinghuysen. Thank you for yielding.
    Mr. Fleischmann. Thank you, Mr. Chairman. I will just 
follow up with one quick question.
    Mr. Ferguson, I know you have addressed some of the future 
goals, but what services can the Corps provide to NNSA and EM? 
In your view, what are the limits? What can you do and what can 
you not do for DOE?
    Mr. Ferguson. I feel that we can provide independent cost 
estimates where we can develop a product. And we can do 
independent reviews, peer reviews. We can do construction 
management. If you have a separate piece of work that is within 
the course of technical requirements that we can complete, we 
can do that. And I think we can do cost estimates and schedules 
and risk analyses for them and bracket the risk on a project 
and run through our Monte Carlo process and the level of 
technology, the level of technical readiness levels, and try to 
bracket the risk so you will get a risk contingency on a 
project where you could implement the project within the budget 
if you did that upfront. We would have to take a team of 
subject matter experts to do that. Where the TRL is not 
developed to a certain level, you have to know the impacts. 
What are the impacts to your design when that TRL changes to 
your project? And put that in your risk ratio and run that and 
get your contingency so you can implement your project within 
the total project cost.
    Mr. Fleischmann. Thank you, Mr. Chairman. I yield back.
    Mr. Frelinghuysen. Thank you, Mr. Fleischmann.
    So what are the primary drivers of the total cost of the 
Uranium Processing Facility?
    Mr. Ferguson. The difference that we indicated at the site, 
it was the capacity and capability in the out years. The M&O 
contractor used a level effort, the Corps used the detailed 
bottoms-up approach doing that, and that is being able to train 
the employees for two shifts to meet the capacity. And that is 
about $500 million higher. It is significantly higher in the 
out years on the capability capacity on that contract. And we 
did that. That is one of the main things.
    And the next one is we are about $450 million in the 
methodology in the main construction of the facility.
    Mr. Frelinghuysen. This is a pretty important project here, 
substantial investments here. There are a lot of uncertainties, 
are there?
    Mr. Ferguson. Yes, they are.
    Mr. Frelinghuysen. They are. And is this likely to see cost 
overruns?
    Mr. Ferguson. Well, see, the performance baseline had not 
been set yet, and that is just a tool----
    Mr. Frelinghuysen. Yeah, but you have been around long 
enough to know. You have a sense of things. I assume Mr. 
Trimble might want to jump in here. But this sort of----
    Mr. Ferguson. I would do an independent estimate, the 90 
percent design, and I would run the risk--and have an outside 
agency review that document for you to set the budget on that.
    Mr. Frelinghuysen. The outside agency might be you, Mr. 
Trimble? You do not have enough on your plate? Maybe you have 
made this review, have you?
    Mr. Trimble. Maybe 2 o'clock today will be better.
    Mr. Frelinghuysen. Okay. Get working on it, will you?
    Mr. Trimble. On UPF, just to highlight a couple of things. 
One, when we are talking about when you are looking at the cost 
increases you have to remember that the current estimate is 
reduced. It includes reduced scope. So the current estimate is 
less than what it was originally.
    The next thing is, in 2011, there was an independent cost 
estimate. That triggered them to have to revalidate their 
initial decision, CD-1, because the increase was more than 50 
percent above the previous high estimate.
    They reaffirmed CD-1 last June. This is one month after the 
contractor told them that the building is too small, the roof 
is too short, and it is not wide enough. And what they found 
out last Spring, this is within a year after having done the 
independent cost estimate, was that they have to raise the roof 
17 feet, it is going to add about $500 million in another year 
to the project.
    So again, independent cost estimates are critical but there 
has to be some sort of internal controls that help make that 
ship go in the right direction.
    Mr. Frelinghuysen. I will not say no pun intended. This 
would raise the roof in a lot of circles.
    I want to leave Tennessee alone for a few minutes here and 
focus on Mr. Eckroade, who has not had a chance to talk very 
long. The Committee directed some responsibilities for you to 
focus on the Waste Treatment Plant out in Washington State, 
relative to the culture. But this is not unrelated to some of 
the things the GAO has been doing. You have come up with some 
pretty substantial recommendations. Could you both talk about 
the time you have committed to study this project out there?
    Mr. Eckroade. Certainly. Thank you for the question.
    Mr. Frelinghuysen. You performed a review. Maybe just cover 
that for the Committee and some of your findings.
    Mr. Eckroade. For WTP, since 2008, we have done a number of 
reviews and we have actually been increasing the frequency of 
our safety reviews based on our strategies to focus more 
attention to nuclear facilities and nuclear projects. The most 
fundamental review we have done at WTP has been on nuclear 
safety culture. That was a foundational experience for us in 
HSS and the Department of Energy to really understand what 
really constitutes a good nuclear safety culture and how do you 
assess it.
    So as we are trying to understand this most important area, 
we actually went out to the NRC and learned their method. They 
are much more advanced in thinking and advocating for healthy 
nuclear safety cultures. And so we actually contracted with a 
company, independent consultants, who do this work for a living 
and so we used these consultants and we went out to WTP and 
interviewed. We did a number of things. To be able to do a good 
nuclear safety culture assessment you actually have to do a 
functional analysis. You see how the organization describes 
itself. Then you actually reach out and do surveys. There are a 
couple of survey methods that are very mature and formal. Then 
you have focus groups. We actually talked to people who have 
similar kinds of responsibilities and duties. You can really 
pull together some common themes in safety culture. So WTP was 
our first effort to really do this in an authoritative way. 
Fundamentally, we found some troubling concerns about the 
safety culture at the time when we published the report last 
year.
    Mr. Frelinghuysen. Which should be applicable to a lot of 
sites; right?
    Mr. Eckroade. And they are. In fact----
    Mr. Frelinghuysen. Yeah. I mean, all sites to some extent.
    Mr. Eckroade. Sure. And since we did WTP, the secretary 
directed us to do extended condition reviews, large nuclear 
projects, and several other locations. Many of the themes that 
we are seeing on safety culture at WTP, we have also seen some 
of the same kind of trends at other projects, you know, to 
varying degrees of severity. So what this is telling us is that 
the department is not yet focused in a sustained way on nuclear 
safety culture. I will tell you that the Secretary has 
articulated in a nuclear safety memo last year that his 
expectations for establishing a strong nuclear safety culture. 
We have incorporated guidance on the nuclear safety culture 
into some of our policies, but in practice we have a long ways 
to go to really understand that, to make our managers at our 
sites and our projects embrace the values of a good, healthy, 
safety culture, and to effectively engage the employee so they 
believe the values that we have for safety, and they see us and 
they see the managers modeling the behaviors of a good safety 
culture and they feel free to raise the issues and have 
confidence those issues will be resolved and they will not be 
retaliated against. So we have a lot of work to do to bring 
healthy safety cultures to the Department.
    Mr. Frelinghuysen. And you add in layoffs and furloughs, 
that makes life even more complicated.
    Mr. Trimble, and then I will go to Ms. Kaptur.
    Mr. Trimble. We have been looking at WTP or its 
predecessors for I would say close to 20 years at this point, a 
long, long time.
    Aside from the obvious cost increases and delays, I mean, a 
couple things I would highlight for you. One is from our report 
we finished last year, in 2012. Again, we highlighted 
technology issues involving the mixers. For the process, they 
have to keep the waste mixed, which is very, very difficult and 
highly technical and challenged. There are some issues with 
buildup of explosive gases. There are issues characterizing the 
waste that is in the tanks. These are not new issues. These 
have been around for many, many years. And actually, in 2006, 
as I was reading through our library on this subject, there is 
a statement in there that DOE, someone from DOE thought they 
had resolved all these technical issues. And I think this goes 
to your comment about is this a science project or a build 
project.
    One point on this, and as you all have raised the concern 
about proceeding to construction before design, and technology 
issues are resolved, in Mr. Raines's comment he noted that on 
UPF they will not proceed until they are technology ready and 
there is level 6. Our recommendation has been it is technology 
level 7. And the whole TRL concept comes from NASA. Again, it 
has its roots.
    Mr. Frelinghuysen. You are going to get Ms. Kaptur even 
more excited.
    Ms. Kaptur. Yes. I am really paying attention, Mr. 
Chairman.
    Mr. Frelinghuysen. She was engaged. Now she is really 
engaged.
    No, you are aware, of course that there are issues at 
Hanford. Huge issues. It is a massive site. I mean, it is 
absolutely amazing, this part of the Manhattan Project. I was 
familiar with Oak Ridge. Our Oak Ridge member has left but I 
can say I was familiar with it but I was unaware of just the 
massive effort. And of course, there are some legal issues 
here, huge legal issues.
    Now, you take those into consideration, obviously. It is 
more than politics. They have consent decrees. And talk about 
milestones. There is so much anticipation out there that these 
issues are going to be addressed. So how do they fit into your 
mix here? Do you acknowledge that there are----
    Mr. Trimble. Yeah, I think----
    Mr. Frelinghuysen. You offered or suggested that maybe the 
whole thing ought to be halted, is that right?
    Mr. Trimble. Well, on terms of proceeding with 
construction, until you can prove the technology and prove the 
design. That is the issue. So otherwise, you just end up with 
delays and redesign. And the current effort, you know, there 
was partial stand-down and some of the construction work till 
they could resolve this. One of the issues in the rebaseline, 
they have also asked the contractor to look at possible new 
technology or design changes to the whole thing. So maybe they 
need another building to deal with some of the waste so it does 
not clog the pipes.
    So again, all that adds time and money. So haste makes 
waste.
    Mr. Frelinghuysen. Thank you. Have I supercharged you, Ms. 
Kaptur?
    Ms. Kaptur. Mr. Chairman, this has just been a very, very 
important panel, and I thank you for testifying today to help 
our country figure a way out of this situation.
    Any additional insight you can give through records 
submissions on the management accounting side? Did you deal 
with these technology issues? These issues will be appreciated 
by this member for sure. And I have a hunch our chairman as 
well. You have added a clarification that we have not had 
earlier. So your work has been valuable as we attempt to 
embrace the future with probably some scientific and 
engineering challenges that were not fully spelled out at the 
beginning in a way that was comprehensible to those who have to 
approve spending up here. So I think that is really very 
valuable.
    Also, it may be in your report but, you know, unwinding 
what went wrong, I asked the prior panel--you probably heard 
what they thought was the worst example. And that can be 
instructive as we move ahead as well so that we set up these 
speed bumps to know how to handle projects of this size. That 
would be very, very helpful. I was not aware of the level 6 
versus level 7. That is a level of detail I did not have. That 
was a very interesting addition to the hearing record today.
    I wanted to ask if I could, relating to workforce concerns, 
in your latest High-Risk List, you noted workforce planning 
efforts as a continuing concern, both at NNSA and at EM. And I 
have long had a concern about workforce readiness and safety 
standards, simply not so much because I have any of these 
facilities in our region. We do not. But because of what I have 
seen happen in the nuclear power commercial industry, and some 
of the mishaps that have occurred. And I am curious about 
recommendations you could provide either a little bit of a 
summary now, or for the record for dependable and steady 
training programs for the technical positions necessary. And I 
am including operational positions as well in the nuclear power 
industry, involving perhaps partnerships that you may have 
imagined between different elements of the government, private 
industry, operators that are out there because, as I said, at a 
prior panel, earlier this week. It was actually operational 
workers who, at great risk to themselves, saved our community 
three times.
    And they had training, but when they reacted to emergency 
situations, they put their own lives at risk, not knowing what 
would happen. And for years I have tried to get training 
programs linked to our trades in the region that I represent 
and it has not happened. I tell this story because we have 
lived it. Nuclear Regulatory Commission, which is not your 
concern directly, put the largest fine in American history on a 
plant that I represent. And as that fine was assessed, I 
actually called the Nuclear Regulatory Commission. I said, I 
really think when you assess the fine rather than those dollars 
going back to the general treasury, you really ought to look at 
diverting some of those dollars to training programs because we 
have now been through this. This is our third time with a third 
incident. And each incident was different.
    And what happened is most of the money went back to the 
Government of the United States. Not a penny of it went into 
training programs. Some of them went to help to develop a 
national park, some of them went to a renewable program. I 
support renewable. It was very small. And I just sat back in my 
chair and I thought, what is the problem here? Why can we not 
get more rigorous training for those who are involved in this, 
a greater understanding of the systems with which they are 
working. And so my question to you really is for the whole 
chain of skills involved in this, and by the way, these workers 
that I represent travel around to other locations through the 
fine process we discovered that they were carrying nuclear 
particles on their clothing that were discovered in the places 
that they were staying and so forth. It was unacceptable. It 
was not their fault. The NRC knew that there were some 
slippages at that plant, but there was not a rigorous NRC 
enforcement of safety. And so my interest is in the lives of 
the workers. And dependable training programs because our lives 
relate to his much they know and what they can do.
    So what are your thoughts on training programs, workforce 
readiness programs that are dependable and steady?
    Mr. Trimble. I will jump in but my colleagues here may have 
more to offer. The area of workforce training is sort of out of 
my lane at GAO. I know we have got teams that work on those 
kinds of issues and I would be happy to get back to you for the 
record, see if I can find anything that would be constructive 
on that point.
    Ms. Kaptur. Okay. Yeah, your report, your high-risk report 
listed it as a continuing concern.
    Mr. Trimble. Yes. I think those work for the workers, and I 
will go back and check this. They are more in the areas of 
acquisition project management kind of positions as opposed to 
the technical kind of positions.
    Ms. Kaptur. Very interesting. All right. Thank you so very 
much. Thanks, Mr. Chairman.
    Mr. Frelinghuysen. It has gotten awfully quiet in here 
which means we are going to get out of dodge in a few minutes.
    Mr. Eckroade, I just want to get back to what we talked a 
little bit about. After you received some direction from the 
Committee you went and took a look at the nuclear culture. As 
you are aware, the Nuclear Regulatory Commission licenses 
commercial nuclear facilities, and we have a couple that are 
underway. There was a decision made I think about a decade ago 
to not seek an NRC license for the waste treatment processing 
plant. Is that right?
    Mr. Eckroade. Yeah, that is correct. I know early in the 
planning for that project there was consideration of having 
that as an NRC license, but I think the reality of that, the 
department changed its position. I am not sure what level of 
consultation there was with Congress or NRC.
    Mr. Frelinghuysen. Well, the reality is that now you are in 
the driver's seat. Is that right?
    Mr. Eckroade. Yes.
    Mr. Frelinghuysen. And how comfortable. You are the 
gatekeeper; is that right?
    Mr. Eckroade. Well, the line organizations are the 
institutions that EM and NNSA, for example, that actually 
authorize operations of the facilities. And so they have that 
burden to ensure the safety design, the safety analysis, and 
specific operational controls are documented and represent the 
conditions that will make sure that our facilities operate 
safely over their lifetime.
    We actually play a role as a check and balance on the line 
organizations. We do spot-checks of core nuclear safety 
processes during the design, construction, and operations.
    Mr. Frelinghuysen. So if the NRC is not doing it, what 
effectively is the DOE doing relative to shall we say licensing 
a nuclear facility?
    Mr. Eckroade. Right. Before a facility can become 
operational, typically it is the site office manager level, 
senior federal manager will actually sign and approve the 
safety basis documentation for that facility. And the safety 
basis documentation is the culmination of all the safety 
analysis, the accident analysis, the hazard analysis, and the 
analysis of the engineered and administrative controls that 
must be satisfied to keep that facility in a safe what we call 
operating envelope.
    Mr. Frelinghuysen. But what I am driving at is do you have 
the capabilities?
    Mr. Eckroade. To license facilities?
    Mr. Frelinghuysen. Well, yeah. You know, you are not the 
NRC.
    Mr. Eckroade. No. Our organization is relatively small.
    Mr. Frelinghuysen. Yes, it is. But you have a 
responsibility which is similar to theirs in terms of if it is 
not called licensing, what is it called?
    Mr. Eckroade. And actually, in this department, the line 
organizations and HSS share the regulatory responsibilities. It 
is not all invested in our office. So it is a shared role.
    Mr. Frelinghuysen. So what is the authority line? Is there 
no line authority on these projects?
    Mr. Eckroade. There is no line authority. It is all within 
the line organizations. We have the Independent Oversight 
Authority on behalf of the Secretary.
    Mr. Frelinghuysen. So what enforcement mechanisms do you 
have?
    Mr. Eckroade. We actually have nuclear safety regulations, 
10 CFR 830 is the Department's formal regulation for nuclear 
safety. It covers operations as well as design and 
construction. And it has really two major components. One is it 
lays out the quality assurance requirements for those 
facilities as well as the safety analysis and safety basis 
controls so we can establish those regulations and our 
facilities are required to be operating under those 
regulations. We also have complimentary policies and technical 
standards that are also contractually enforceable.
    So it is actually shared--it is very different than the NRC 
approach. DOE line organizations actually play key regulatory 
responsibilities and HSS plays the independent oversight role, 
kind of the checks and balances role, on behalf of the 
secretary. We also play the regulatory enforcement role. So we 
have a staff office for both occupational safety and health, as 
well as nuclear safety, that does investigations of potential 
violations, develops notices of violation, and ultimately we 
will issue those to our contractors. If it is NNSA, the NNSA 
administrator actually will issue those notices of violation 
for his sites.
    Mr. Frelinghuysen. So you have the ability--whatever is 
happening out in Washington State, are you going to be 
licensing this facility, which is----
    Mr. Eckroade. Right, so they can operate.
    Mr. Frelinghuysen. Yeah. I mean, you are going to provide 
the ground, the legal ground for its operation?
    Mr. Eckroade. Well, our role will be to assess key aspects 
of safety and advise the senior line managers and the Secretary 
of our concerns about the safety of that facility. If we find 
violations of our safety requirements, we take an enforcement--
--
    Mr. Frelinghuysen. Well, I hope there is some nexus between 
some of the observations of the GAO to what you are doing.
    Mr. Trimble. Yes, sir.
    Mr. Frelinghuysen. And on behalf of Ms. Kaptur and all the 
members of the Committee, I want to thank each of you for your 
testimony today. It has been valuable. We appreciate it. We 
stand adjourned. Thank you.

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                           W I T N E S S E S

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                                                                   Page
Bosco, Paul......................................................   145
Eckroade, W. A...................................................   145
Eisenhower, Susan................................................     1
Ewing, R. C......................................................     1
Ferguson, Mike...................................................   145
Lyons, P. B......................................................     1
Raines, Bob......................................................   145
Rusco, Frank.....................................................     1
Surash, Jack.....................................................   145
Trimble, Dave....................................................   145
Weber, Michael...................................................     1

                                  
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