Audit of selected aspects of the Waste Isolation Pilot Plant cost structure, Carlsbad, New Mexico

Abstract

The Department of Energy`s (DOE) Waste Isolation Pilot Plant (WIPP), located near Carlsbad, New Mexico, is a research and development facility intended to demonstrate that transuranic waste from the Government`s defense activities can be safely disposed of in a deep geologic formation. The Fiscal Year 1994 budget for WIPP is about $185 million and includes funding for the operation of WIPP and for experiments being done by other DOE facilities. DOE`s current plan is for WIPP to begin receiving transuranic waste in June 1998. This audit was requested by the Assistant Secretary for Environmental Management because two recent reports, one issues by the Office of Inspector General (OIG), were critical of the staffing and cost-effectiveness of WIPP, and because of recent mission changes at WIPP. The audit team consisted of representatives from the DOE, auditors from the OIG, and technical specialists hired by the OIG to assist in the audit. The purpose of the audit was to determine whether WIPP was appropriately staffed to meet programmatic requirements in the most cost-effective manner. The Secretary of Energy expected DOE facilities to benchmark their performance against other facilities to strive for best in class status, and the Westinghouse management and operating contract for WIPP required the facility to be operated in a cost-effective manner. However, the authors determined that Westinghouse did not use benchmarks and that WIPP could be managed more cost-effectively, with fewer personnel, while maintaining its current level of excellence. They concluded that the WIPP staffing level could be significantly reduced with a decrease in costs at WIPP of about $11.4 million per year.