2024 GAO Report on SFHP (GAO-25-106997)

This is a December 2024 GAO report (GAO-25-106997) on Spent Fuel Handling Project (SFHP) required by the 2024 NDAA.

Summary

GAO reviewed the third baseline revision (the most recently completed) for the Naval Spent Fuel Handling Recapitalization Project (SFHP). GAO found that Naval Reactors’ cost and schedule estimates did not fully reflect the key characteristics of credible and comprehensive estimates. For example, Naval Reactors requires its major construction projects to follow Naval Reactors and DOE’s project management order. DOE requires cost estimates to use the best practices identified in GAO’s Cost Estimating and Assessment Guide. Naval Reactors did not conduct an independent cost estimate—a best practice. To validate the estimate, its contractor relied on several cross-checks on major cost elements completed by subcontractors external to the project. By following all best practices for credible and comprehensive cost estimates when developing its planned fourth baseline revision, Naval Reactors would have greater assurance that the estimated costs are realistic.

Naval Reactors has not conducted independent analyses of the underlying causes of SFHP cost increases and quality assurance problems that have led to the rebaselining. DOE’s project management order requires independent root cause analyses of project cost overruns, and of the quality of the work performed. However, while analyses were conducted by the contractor, they were not conducted by staff independent from project management and were thus not independent. Independent analyses of root causes could provide Naval Reactors with more objective and reliable information to oversee the project contractor and help prevent further project cost increases and delays.

NR's response to the findings are in Appendix III of the report (pdf pages 46-49).