Report to Congress Treatment & Immobilization of Hanford Radioactive Tank Waste

6.0 Management of the TWRS Phase I Project

The successful execution of the TWRS Phase I project requires effective management by DOE. Accordingly, DOE is establishing separate project management teams with expertise in technical, financial, legal, and contract administration areas. The privatization project team will be responsible for the successful administration of the BNFL contract. The operations contractor project team will manage the activities of the Hanford Site contractor performed in support of the BNFL contract. This section describes the elements DOE has incorporated into its management plan for the TWRS Phase I project. This management approach has been adopted due to the size, complexity and unique nature of both contracts and the overriding necessity to ensure integration across all TWRS and Hanford activities.

6.1 Overview of DOE’s Management Approach

With TWRS Phase I, DOE is taking on a new management role—one that requires the integration of activities of two prime contractors to execute the entire TWRS Phase I work scope. BNFL will be responsible for design, construction, waste treatment and immobilization. The Hanford M&I Contractor will be responsible for retrieving the waste from the tanks and providing it to BNFL for treatment and immobilization. The Hanford M&I Contractor will also be responsible for accepting, receiving, and storing or disposing of the treated waste and byproducts.

Under the TWRS management approach, DOE primarily defines the requirements (i.e., specifies what it wants accomplished) and the performance incentives, and the details of implementation (i.e., the how) are left largely to the performing contractors. This approach is designed to allow the contractors freedom to determine the best way to carry out the work and to be rewarded for a good job. To carry out this role effectively, DOE is taking a project-oriented approach. The Phase I project includes features to assure effective management and integration of the work, including incentives and tools to ensure and monitor contractor performance. Key features include assembling experienced, dedicated contract management teams and implementing disciplined project management systems that contain approved scope, schedule, and cost baselines and enable performance to be measured and changes to be formally controlled. The project management systems will be tailored to TWRS Phase I.

The management approach is based on project management, performance-based, fixed-price-, and incentive based contract administration principles and best practices from the private sector and other government agencies, as well as lessons learned captured in DOE Order 430.1, Life Cycle Asset Management, and the DOE Headquarters Environmental Management Privatization Program Management Plan (DOE 1997a). The TWRS Phase I Management Plan will describe DOE’s management approach.

6.2 Special Elements for Management

Special elements have been incorporated into DOE’s management approach. These elements focus on: (1) managing the risk that DOE is assuming for the pretreatment and immobilization of the waste by BNFL under the BNFL contract and (2) incorporating lessons learned from other DOE privatization projects. Table 6-1 highlights these elements and their use.

6.3 Establish TWRS Phase I as a Separate Project

TWRS Phase I includes four major functions. These functions are performed by the Hanford M&I Contractor and BNFL as described below.

Hanford M&I Contractor

• Waste Retrieval involves retrieval of waste from DSTs, retrieval of waste from SSTs, and delivery of four envelopes of characterized waste feed to BNFL for processing. Waste retrieval also includes all activities necessary to install retrieval systems, retrieve waste, and test retrieval technology.
• Waste Disposal involves receipt and storage of immobilized HLW and receipt and disposal of immobilized LAW and interface with the national geologic repository.
• Infrastructure involves physical interfaces with the BNFL facility, including land, roads, utilities, effluent treatment systems, feed tanks, and radioactive solid waste systems.

BNFL

• Waste Processing involves treatment and immobilization of LAW and HLW, including all pretreatment, separation into high-level and low-activity fractions, separation of byproducts, operation of waste processing plants, and production of immobilized waste forms.

The contract management teams and the necessary components of the project management systems are being implemented on a schedule that assures the elements are aligned with TWRS Phase I activities and will be in place when needed.

6.4 TWRS Phase I Project Management

The DOE Phase I project teams will be located in close proximity to the BNFL and Hanford Operating Contractor managers at the Hanford Site.

The DOE teams will possess the requisite qualifications, experience, and mix of capabilities to manage Phase I. The core positions for the DOE privatization project team are as follows:

• Project Manager;
• Deputy Project Manager
• Baseline Integration Manager;
• Quality Assurance Manager;
• Contracting Officer;
• General Counsel;
• Contract Specialist;
• Financial analyst experienced in commercial financial markets;
• Engineers with experience in radioactive facility design, constuction, and operation;
• Cost estimator with experience in large, construction and operating projects;
• Contracting Officer’s Representative;
• Stakeholder Involvement Specialist; and
• Management, regulatory, and technical experts.

DOE will fill these key positions with skilled and experienced staff from within and outside DOE. DOE-RL is currently below its Strategic Alignment Initiative staffing ceiling, providing opportunity for hiring specialists to fill critical staff positions. When needed, excepted service positions are being used to acquire these special skills. In addition, DOE’s teams will include an established group of management, technical, and financial experts from national laboratories and the private sector, which has been supporting DOE on the TWRS project for the past several years.

Project staffing and training plans are being prepared. The TWRS Phase I Project Staffing Plan will identify the project management functions that need to be performed by DOE, the staff required to perform these functions, and the staff assigned to fulfill the functions. The TWRS Phase I project training plan will identify the TWRS Phase I project-specific training requirements for project staff and staff interfacing with the projects.

In addition to managing TWRS Phase I DOE will build the capability to provide direction to a new contractor in the event that BNFL must be terminated for convenience at the end of the design phase.

6.5 Project Management System

The Project Management System is being revised to meet specific requirements of the TWRS Phase I Project in Part B. The revised DOE Project Management Systems of TWRS Phase I will include:

• Work Breakdown Structures defining all of the work to be performed, including work to be performed by DOE to manage Phase I;
• Organizational Breakdown Structures describing how Phase I is organized, key DOE and contractor organizations, their relationships, and lines of authority;
• Descriptions of the organizational and key personnel roles and responsibilities;
• Specific management plans and procedures for project management, stakeholder and public involvement, quality assurance, risk and decision management, staffing, and training;
• Interface Control Documents to manage the interfaces between the contractors and interface MOUs to manage interfaces within and outside of DOE;
• Project Baselines containing project scope, schedule, and cost baselines and monthly baseline status reviews used to manage and control project scope, schedule, and cost performance and to monitor the contractors;
• Project controls appropriate for fixed-price and incentive-fee contracts that include change control, configuration control, funds control, baseline variance threshold monitoring and evaluation, and monthly project reports and review meetings to review contractor and overall project baseline performance against the approved baseline;
• Critical Risk Management Lists and Decision Tracking Lists to ensure critical risks are identified and managed and key decisions are made when needed;
• Annual Budget Authority and Budget Outlay profiles, containing life cycle funding profiles for each of the projects to ensure the necessary funding is planned and provided as scheduled to meet DOE commitments
• Non-proponent project reviews at key project milestones and decisions.

The Project Management Plans will describe how DOE will manage TWRS Phase I. These plans will emphasize DOE’s management role and will describe the mission, strategy, objectives, scope, schedule, and cost baselines of Phase I; work and organizational breakdown structures; roles and responsibilities; and project management and contract administration functions and reporting relationships.

6.6 Management Elements for Maintaining Financial Accountability and Reporting Cost Variances

During the design phase, the Hanford M&I Contractor and BNFL will evaluate and report their progress and performance to DOE monthly. For BNFL, this reporting will be against the

Integrated Master Plan. For the Hanford M&I Contractor, this reporting will be against the annually updated Multi-Year Work Plan. Written reports submitted to DOE will contain:

• A narrative assessment by the Project Manager;
• The significant accomplishments and progress towards completion of project goals, objectives, and milestones;
• A comparison of the amount of work completed against the approved contract baseline;
• Potential problems, impacts, and alternative courses of action using a schedule-based method to identify potential schedule deviations and needed corrective actions before they affect the baseline;
• A critical path analysis to monitor the completion of important activities in the correct sequence;
• Identification of cost and schedule variances exceeding 10% and plans for addressing the variances;
• Critical risks and actions planned to address those risks;
• Status of decisions and information requirements for those decisions; and
• A 90-day preview of major activities and milestones.

This information will be integrated by DOE and used to assess the contractors’ performance and the performance of the project overall, using performance and variance analyses. Through these analyses, significant variances will be identified and evaluated further by DOE to determine:

• Cause: The specific reasons why the variance occurred;

• Impact: The specific impacts on remaining work scope, including impacts to the estimate of fixed prices at completion of the design phase; and

• Corrective Actions: The specific plans developed by the contractors to mitigate variances.

The information resulting from these analyses will be presented by DOE in regularly scheduled Project Management Integrated Product/Process Team meetings to review and discuss contractor and overall project performance with contractor project management staff. Topics expected to be addressed during these meetings include performance accomplishments; technical, schedule, and cost variances; risks; impacts; and corrective actions associated with each of the contracts and the overall project. In addition, the Critical Risk Management Lists and Decision Tracking

Lists will be reviewed and discussed to ensure critical risks are being managed and key decisions are occurring when needed. Proposed corrective actions resulting from discussions will be recorded and tracked to completion.

The information and results of the performance evaluations and project reviews will then be summarized and reported to DOE Headquarters. Significant technical/schedule/cost variances and increases in the BNFL contract cost estimate will be reported as required in Section 3132 of the National Defense Authorization Act for Fiscal Year 1998. Specifically, any increases in the cost estimate of the BNFL contract that equal or exceed the estimates provided to Congress by 10% will be reported to Congress by DOE Headquarters.

6.7 BNFL and Hanford M&I Contractor Management Approaches

The Hanford M&I Contractor and BNFL, like DOE, are taking a project-oriented approach to managing their efforts in support of TWRS Phase I. Each contractor is implementing its effort as a project and establishing the necessary project management elements. The most important elements include a project office; project team/organization; work and organizational breakdown structures; a project management plan; a project baseline containing scope, schedule, and cost baselines; and monthly reports and reviews of status against baselines. The Hanford M&I Contractor’s project management approach and ability to manage was independently evaluated, as well as evaluated by DOE, as part of the Hanford M&I Contractor readiness-to-proceed assessment.

Lockheed Martin Hanford Corporation is the subcontractor, under Fluor Daniel Hanford (the Hanford M&I Contractor), responsible for day-to-day operation of Hanford’s tank farms and will ensure all activities in support of the privatization contractor will be carried out successfully. Both Fluor Daniel Hanford and Lockheed Martin Hanford Corporation are staffed by individuals with extensive experience in defense waste cleanup activities, and who have a thorough understanding of the tank waste challenge at Hanford. Key performance measures have been built into the Hanford M&I contract that provide substantial incentives for strong performance.

BNFL’s project management approach and ability to manage was evaluated prior to the award of its contract for Part A, and again for authorization to proceed, based upon its Part A deliverables. The BNFL team has successfully demonstrated extensive, relevant technical and management experience. BNFL has 40 years of experience in the financing, development, design, construction, and operation of complex nuclear waste management facilities. For TWRS Phase I, they have established a best-in-class project management team with a combined experience base totaling more than one hundred years, and recent experience (within the past 5 years) managing 15 major projects, each with an overall cost in excess of $100 million.

The team is comprised of BNFL Inc., BNFL Engineering Ltd., Bechtel, GTS Duratek, and SAIC. BNFL will serve as the project manager providing the project management, integration, and operations expertise; with Bechtel providing design and construction management services; GTS Duratek providing waste treatment and vitrification services; and SAIC providing regulatory compliance services. BNFL’s Project Manager has 35 years of project management and engineering experience with complex radiochemical processing projects, with 13 of the last 16 years managing the successful design, construction, commissioning, and operation of BNFL’s Thermal Oxide Reprocessing Plant and associated operating plants in Sellefield, England. This plant is of similar size and has many facility features that will be implemented in BNFL’s proposed facilities. It was recently commissioned, and therefore, the Project Manager has very recent experience in the engineering and construction of a radiochemical processing facility.

6.8 Management of Interfaces

Successful management of the TWRS Phase I project requires management of the interfaces between different organizations and functions. Interfaces in the TWRS Phase I project are managed and documented primarily through the Interface Control Documents, Integrated Product/Process Teams, and interface MOUs.

• Interface Control Documents are agreements that are actively managed and become part of the work requirements of the project. For each interface, they define the scope, responsibilities, applicable documents, physical description, functional/procedural description, and major interface product delivery dates. The Interface Control Documents have been co-prepared and agreed upon by BNFL, the Hanford M&I Contractor, and DOE.
• Integrated Product/Process Teams have been established to promote contractor innovation and accountability for deliverables and services; minimize formal reporting and other administrative requirements; integrate contractors (both BNFL and the Hanford M&I Contractor) activities by linking interfaces; and provide contractors with focused, timely access to information. Integrated Product/Process Teams take a cooperative, partnering approach without compromising the contractors’ responsibility for contract performance. Four Integrated Product/Process Teams have been established for: (1) Project Management; (2) Contract and Business/Finance; (3) Environment, Safety, and Health; and (4) Interfaces.
• Memoranda of Understanding and Agreement are written agreements between the TWRS Phase I project and other Hanford Site organizations with a key interface. These agreements define the necessary working relationships, obligations and commitments, roles and responsibilities, and authorities and accountabilities of each DOE organization supporting the TWRS Phase I project. Points of contact for the project and the interface organization and regularly scheduled meetings of the points of contact are being established. Interfaces for which memoranda are planned include:
  • DOE-RL Site Infrastructure Division;
  • DOE-RL Waste Management Division (including the Spent Nuclear Fuel Project);
  • Regulatory Unit; and
  • DOE Headquarters Office of Civilian Radioactive Waste Management.

6.9 Issue Identification and Resolution Process

There are several forums for early detection and resolution of issues: Integrated Product/Process Teams and Interface Control Document working groups. These forums provide for frequent, regular meetings in which the early identification and resolution of issues are key meeting objectives. As an example, during the regularly scheduled Project Management Integrated Product/Process Team meetings, contractor and overall project progress is evaluated against approved scope, schedule, and cost baselines. In addition, performance issues and risks (i.e., schedule slippage, cost growth) are discussed and corrective actions identified and tracked. Issues that cannot be resolved within these forums or that require a change to the project baseline and/or privatization contract are referred to the Project Management Integrated Product/Process Team.

The intent of these forums is to identify and resolve issues before they evolve to the point where they require contract change order or dispute resolution processes and adversely affect progress. However, in the event such processes are needed, provisions for handling disputes are provided in the BNFL contract. In addition, guidance for handling disputes is provided in the BNFL contract administration plan.

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