In an earlier blog entry, I mentioned that the Army Corps of Engineers in September released a new cost estimate of $12.2 billion for the construction of a vitrification plant at the Hanford Nuclear Reservation. But there is always more to any story, and a deeper look at Hanford shows rising costs can be understood as the result of collisions between clashing business cultures.

This past April, a Congressional subcommittee held hearings on the state of the Hanford project. The subcommitee expressed disappointment in the performance of the Dept. of Energy and Bechtel, the project's main contractor since 2000. The Los Angeles Times quoted Rep. David L. Hobson (R-Ohio), the chairman of the House Appropriations subcommittee that pays for the project: "You want to take somebody out and hang them. It is already outrageous what it is costing." In his testimony to the subcommittee, Bechtel Chairman Tom Hash admitted that "In hindsight the challenges were bigger than expected." Still, he pointed out that "we have solved solve very difficult technical challenges in this first of a kind project."

Yet it is the unique nature of the Hanford project that led one government agency to question planning choices made by Bechtel and the Dept. of Energy. In written testimony to the Congressional subcommittee, the Government Accountability Office faulted the decision to use a commercial-construction-style fast track, design build strategy. The General Accounting Office recommended that the Dept. of Energy and Bechtel shift to a more conservative schedule for such an unprecedented project. Under the GAO's proposed guidelines, Bechtel and the Department of Energy can only go forward with construction if they have 90% of the design completed, as opposed to the estimated 65% finished design from before.

While this new standard was eventually implemented, Bechtel doesn't agree completely with their reasoning. "I honestly don't know what they based that on," says John Britton, Bechtel's chief spokesman for the Hanford site. Britton believes that the GAO was seeking a blanket explanation for a number of unforeseen technical and logistical issues. "For the GAO to say we need to go forward only with a complete design, what is a complete design?" Britton maintains that postponing construction to plan out the smallest details won't be the panacea the GAO is hoping for. "The Government hired Bechtel to do a fast-track design project. [The agency] wanted commercial practices in order to hold down cost. In the construction industry, you don't want to wait years before beginning construction. If we had finished designing first, we'd just now be getting started."

As it stands today, construction of the Hanford vitrification plant is about 30% complete. Work continues on all but two of the buildings, the Pretreatment Facility and the High Level Waste Facility, which will handle the most volatile of the nuclear waste. These had to be put on hold after a reevaluation of seismic data earlier this year prompted design changes to meet federal guidelines.

The delay at these buildings isn't the only time that the government's strict standards on nuclear construction have rubbed against the grain of Bechtel's commercial construction strategies.

After Bechtel took over the project in 2000, the contractor soon encountered issues with procuring materials up to the standards of nuclear construction. "There's no infrastructure to support major nuclear construction in this country." says Britton. "You can get materials made but you lose quality control. With nuclear construction you need to prove that you can do the task with the needed quality." Revising the estimated cost of materials and various pieces of specialized equipment contributed to the steady rise in budget projections since 2000.

Additionally, Bechtel had some issues at first finding staff that met the strict requirements of the nuclear industry. "Licensed professional engineers are qualified to do nuclear work in terms of their technical knowledge." Britton notes. "But if you haven't done it before, you need to learn to absolutely adhere to procedure. What you really need to have is a pedigree of dealing with this level of work before. If you don't have the documentation, you're not going to get in."

Many of those used to commercial construction had to adapt to nuclear procedures. "Engineers want to get things done, find ways to solve problems. That's what they do in the commercial world. They can't do that in the nuclear industry. If they see an issue, they have to raise it to their superior, and go through specific processes to resolve it." But these disparate work cultures have caused friction with government agencies. "Earlier this year the Dept. of Energy criticized us for putting too much on scheduling pressure, and rightly so." Britton says that both the materials and labor issues have largely been addressed today, but having to partially resurrect the dormant U.S. nuclear industry is something neither Bechtel nor the DOE fully anticipated.

Britton maintains however that most of these procedural issues have been addressed, and that at the moment the primary concern is redesigning for the aforementioned seismic studies, as well as preparing for potential technical problems that may arise in the future. "In the first few years there were more that a hundred technical issues, really more like two hundred, but we've gotten to nearly all of them." According to Britton, many of the technical issues involved new technologies designed for the one-of-a-kind facility, and sometimes required new testing and redesigns to meet the necessary standards.

It is hard to ascribe the history of delays and cost increases at Hanford to any single cause. There is some truth to Bechtel's claim that the unique nature of the project created unique, unforeseeable issues. But the Government Accountability Office and the Congress have a point as well: perhaps a unique and tightly regulated project shouldn't be built with the same fast track techniques widely used in the commercial world. And caught in the middle is the DOE, so eager to bring in cost-effective commercial practices while meeting the strict guidelines surrounding some of the most volatile and dangerous waste material in existence. Still, one remains hopeful that the worst has been dealt with at the Hanford Site, and that things will go smoother in the years ahead.