BLUE RIDGE ENVIRONMENTAL DEFENSE LEAGUE
PO Box 88 ~ Glendale Springs, North Carolina 28629 ~ Phone (336) 982-2691 ~ Fax (336) 982-2954 ~ Email: BREDL@skybest.com

PRESS RELEASE

FOR IMMEDIATE RELEASE
August 23, 2001

CONTACT:
Don Moniak (803) 644-6953
Lou Zeller (336) 982-2691

PLUTONIUM FUEL FUNDING NEARLY EXHAUSTED
BAD COST ESTIMATES PLAGUE PROGRAM

Documents obtained this week by the Blue Ridge Environmental Defense League (BREDL) indicate that funding for the Department of Energy’s (DOE) Plutonium/MOX fuel program contract¹ is nearly exhausted. According to Modification 13 of its contract with Duke Cogema Stone & Webster (DCS), DOE has already obligated eight-six percent (86%) of the total estimated cost for contract performance (Figure 1)². BREDL estimates that 77-80% of the “cost-plus-fixed-fee” is obligated through this fiscal year³, suggesting the possibility of unexpected future liabilities for DCS.

“DOE has submitted grossly misleading cost-underestimates to Congress, largely based on Duke Cogema Stone & Webster’s proposal,” said BREDL Organizer Don Moniak of Aiken, South Carolina. “We believe the program should be cancelled before taxpayers are saddled with another multi-billion dollar DOE boondoggle that increases the nuclear danger; an investigation into the validity of original cost-estimates should be conducted; and DOE should lift its suspension of the plutonium immobilization project.”

The huge cost-overrun is substantially greater because the one-year old performance cost estimate fails to incorporate:

a 40% increase in the design cost estimate for the plutonium/MOX fuel fabrication facility (Fig2);

higher-than-expected costs of Nuclear Regulatory Commission licensing of the fuel facility;

the fact that numerous Base Contract obligations have yet to be submitted and/or approved--including final design packages, reactor licensing amendment applications, the MOX fuel security plan, and the entire Lead Test Assembly program.

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¹ DCS is presently under a “cost-plus-fixed-fee” contract called the Base Contract and awarded in March 1999 after two other bids were rejected. The Base Contract obligates DCS to conduct numerous activities at the front end of the plutonium/MOX fuel program (with DOE retaining Options to extend the contract for construction, operation, and deactivation):

design and licensing of a plutonium/MOX fuel fabrication facility at Savannah River Site;

design and licensing of nuclear reactor modifications at Duke Power Company’s Catawba and McGuire Nuclear Power Plants near Charlotte, NC and Rock Hill, SC; (although Virginia Power Company’s North Anna 1 and 2 nuclear power reactors are still listed as mission reactors in the contract);

qualification of plutonium/MOX fuel for use in U.S. light water reactors (LWR);

design and certification of a first-of-its-kind plutonium/MOX fuel shipping package.

fabrication and irradiation of plutonium/MOX fuel Lead Test Assemblies

² Performance cost is “the estimated cost for the performance of the work under the Base Contract,” and is defined in Part I, Section B.2.a of the DCS-DOE contract, Contract No. DE-AC02-99CH10888. The Base Contract “performance cost” in March 1999 at time of award was $116.7 million. Three subsequent contract modifications through July 2000 led to total increases of $8.6 million to reach the $125.3 million performance cost estimate in the most current contract available.

³ The “fixed fee” for the performance of the work, which amounts to overhead and profit if work costs meet cost estimates, is defined in Part I, Section B.2.(b) of the contract. This figure, which is considered “proprietary” and exempt from public disclosure, increased through two contract modifications through July 2000.
BREDL estimates the original fixed fee at approximately $14 million, or a 10-11% overhead and profit margin. This estimate is based on DOE’s news release of March 22, 1999 stating the base contract being “worth approximately $130 million” and entailing three to five years of work.

More Info: Plutonium Fuel Factory facts

Southern Anti-Plutonium Campaign