Sensenbrenner Recommends No FY2000 Construction Funding for SNS

“While the [SNS] Project is scientifically meritorious and R&D should be continued, it clearly needs more front-end preparation before it is ready to proceed to full construction.” -House Science Committee Chairman James F. ensenbrenner (R- WI)

As he did two years ago with the LHC, House Science Committee Chairman James Sensenbrenner (R-WI) is raising concerns about construction of DOE’s planned Spallation Neutron Source (SNS). As was the case with the LHC, where his involvement proved ultimately beneficial (see FYI #63, 1997 ), Sensenbrenner is not opposed to the project, but believes some changes are necessary in order for it to proceed in an optimum fashion.

After a March 5 oversight trip to Oak Ridge National Laboratory (ORNL) in Tennessee, where the SNS is to be built, Sensenbrenner issued a report claiming that “project management is in turmoil.” He praised DOE’s recent selection of David Moncton as project director (see FYI #30 ), but raised other concerns, including the State of Tennessee’s “use tax” on the SNS. Sensenbrenner’s report recommends that no funds for SNS construction be appropriated for FY 2000. DOE’s FY 2000 request for SNS is $214 million: $17.9 million for project R&D and $196.1 million for construction. FY 1999 funding was $130 million: $28.6 million for project R&D, $101.4 million for construction.

Sensenbrenner’s trip to Oak Ridge followed March 3 testimony by a GAO official that the project’s cost and schedule estimates are not yet sufficiently developed to represent a reliable baseline. (The current estimated total cost for construction is $1.36 billion). Sensenbrenner and House Science Ranking Minority Member George Brown (D-CA), in a letter to GAO, note that “this project is a high priority issue for the Committee given its projected cost and overall importance to the science community.” They “request that GAO continue to monitor” its progress.

Sensenbrenner’s report on his March 5 ORNL oversight trip is quoted in its entirety below:

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Findings

* No SNS FY 2000 Construction Funds Should Be Appropriated.- Spallation Neutron Source (SNS) Project management is in turmoil, spending is lagging, Project cost and schedule estimates have not been fully developed (nor will they be until much later this year), the Department of Energy’s (DOE’s) complex management approach requires further simplification and current memorandums of agreement (MOAs) should be substantially strengthened. While the Project is scientifically meritorious and R&D should be continued, it clearly needs more front-end preparation before it is ready to proceed to full construction.

* DOE Should Not Pay a Use Tax.-The State of Tennessee imposes a “use” tax that is estimated to total $35.4 million for the SNS. Given the economic benefits expected to accrue from the SNS, this is totally unacceptable, even in light of the State’s commitment of $8 million to construct a Joint Institute of Neutron Sciences at ORNL. Under no circumstances should any funds be appropriated for SNS construction at ORNL or at any other site that imposes such a tax.

Background

DOE is proposing to build the SNS-a $1.36 billion accelerator- based facility intended to generate high-intensity, pulsed neutron beams for a wide variety of scientific research and industrial applications-at ORNL in Tennessee. The SNS Project is being carried out by a multi-laboratory collaboration, led by ORNL and including four other DOE National Laboratories: (1) Argonne National Laboratory (ANL) in Illinois; (2) Brookhaven National Laboratory (BNL) in New York, (3) Los Alamos National Laboratory (LANL) in New Mexico, and (4) Lawrence Berkeley National Laboratory (LBNL) in California. It is important to note that DOE estimates that the SNS will have a 40-year life span and an annual operating cost of $106.7 million. Thus, the SNS-including upgrades represents a long-term investment of well over $6 billion.

DOE, a DOE external independent review (EIR) team, and the U.S. General Accounting Office (GAO) have conducted recent reviews of the Project’s management, cost and schedule, and the effectiveness of the collaborating laboratories’ coordination. All have raised concerns about whether the SNS will be completed on time and within budget. On Friday, March 5, Science Committee Chairman F. James Sensenbrenner, Jr., visited ORNL to discuss how these concerns were being addressed. Participating in the discussion were Dr. Alvin Trivelpiece, Director of ORNL, as well key SNS Project personnel that included representatives from ORNL, ANL, BNL, LANL, LBNL, and the DOE Oak Ridge Operations Office. Following are specific observations concerning the SNS Project.

Observations

* Project Management is in Turmoil.-Discussions confirmed findings presented by GAO in its March 3, 1999, testimony before the Science Subcommittee on Energy and Environment.

On a positive note, ORNL has recently selected an experienced project director-Dr. David E. Moncton-the former Associate Director responsible for the Advanced Photon Source at ANL. However, the Project is still without a technical director, and DOE’s review committee recently concluded that: (1) there was still “an inadequate level of technical management at the [Oak Ridge] laboratory"; (2) a full-time operations manager should be appointed; (3) a manager is needed to oversee the construction of the facilities that will house the equipment and instruments being built by the individual laboratories; (4) slow progress in the facilities portion of the Project is due in large part to the relative inexperience of the Project facilities staff; and (5) the designs of each of the collaborating laboratories’ component parts have not effectively been integrated into the total Project, primarily because ORNL’s Project office lacks the appropriate technical expertise to integrate the designs and to plan for commissioning and operating the facility.

In addition, obligations and costs are currently running at about 60 percent of the planned budget (through 4 months of the Project’s 87-month schedule). And much uncertainty has been engendered by DOE’s decision to recompete the ORNL management and operation (M&O) contact, which expires March 31, 2000, and the subsequent decision by Lockheed Martin Energy Research Corporation (LMER)-the current ORNL M&O contractor-to not rebid as prime or lead contractor.

* SNS Project Cost and Schedule Estimates Have Not Been Fully Developed.-Discussions also confirmed GAO findings that the Project’s cost and schedule estimates are not fully developed and thus do not yet represent a reliable baseline estimate. Dr. Martha Krebs, Director of DOE’s Office of Science, has tasked ORNL “to undertake a comprehensive assessment of the project” and to report back to the Department in the first week in April. Dr. Moncton will be taking on this assignment, and he is also tasked with the development of a detailed baseline. However, ORNL said that only an “outline” of this baseline is expected to be available in July and that the detailed baseline probably would not available before September-nearly nine months later than planned.

There are also concerns that there are inadequate allowances for contingencies built into the Project’s current cost and schedule estimates, and DOE’s EIR team reported that the Project will not be completed at the current cost estimate. Additional concerns include the high level of engineering, design and inspection (ED&I) costs for the SNS linac (51%), accumulator ring (44%), and experimental systems (44%) noted by the 1997 DOE Independent Cost Estimate (ICE) team to be “very high with respect to DOE guidelines,” as well as $35.4 million in SNS Project costs for a “Tennessee Use Tax” identified by DOE’s EIR team.

* DOE’s Project Management Approach Is Complex.-Finally, as noted by GAO, DOE’s approach to managing the SNS Project requires an unprecedented level of collaboration among five different laboratories operated by four different contractors, and managed through DOE’s complex organizational structure, which includes the two separate DOE Offices (Offices of Sciences and Defense Programs) and four separate DOE Operations Offices (Oak Ridge, Oakland, Chicago, and Albuquerque). Although ORNL serves as the Project’s overall manager, staff at each of the participating laboratories do not report to LMER, but rather to their respective laboratory directors and contractors.

DOE has developed MOAs between and among the laboratories and with the four DOE Operations Offices to promote collaboration among the laboratories, but these MOAs are not legally binding. ORNL and DOE officials argued that the management structure was actually simple. According to them, Dr. Moncton-the SNS Project Director-will report directly to Dr. Trivelpiece, will be responsible for all aspects of the SNS (including authority over the Project’s ORNL employees), and will approve all the work packages authorizing funding to the participating laboratories, thereby exercising direct control over the Project. The fact remains, however, that he does not have direct authority over the other participating laboratories’ employees and must at this stage rely on non-binding MOAs.

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Sensenbrenner, as chair of the authorizing committee for the SNS, does not control the money appropriated for the project. That responsibility lies with Ron Packard (R-CA), chair of the Energy and Water Development Appropriations Committee. However, Sensenbrenner is a major player when it comes to science projects, and his recommendations will certainly carry weight.