The audit report from the office of the inspector general has been release at http://www.ig.doe.gov/pdf/ig-0713.pdf

The report shows considerable cost increase beyond the 2002 estimates. As of July 2005, NNSA's unvalidated estimate for the design and construction of the MOX Facility was about $3.5 billion, which is $2.5 billion more than it had previously estimated.

Highlights from the report:

• In September 2000, the United States and the Russian Federation signed the Plutonium Management and Disposition Agreement which committed each country to dispose of 34 metric tons of surplus plutonium. To meet this goal, the National Nuclear Security Administration planned to construct a Mixed Oxide Fuel Fabrication Facility at the Savannah River Site.
• In February 2002, NNSA reported, that the construction of the MOX Facility would start in FY 2004, begin operations in FY 2007, and cost nearly $1 billion to design and construct. Through 2005, Congress appropriated $950 million for these activities. The objective of the audit was to determine if the MOX Facility is within budget as established in its 2002 report to Congress.
• The cost of the MOX Facility will significantly exceed the amounts reported to Congress in 2002. As of July 2005, NNSA's unvalidated estimate for the design and construction of the MOX Facility was about $3.5 billion, which is $2.5 billion more than it had previously estimated. Further, as of July 2005, NNSA had spent $453 million - nearly half of the $1 billion design and construction budget - on just design activities and had only completed 70 percent of the design work.
• We found that weaknesses in project management and limited administration of the contract contributed to the cost growth. Specifically, NNSA utilized a cost-plus-fixed fee contract to procure design services, despite the fact that this type of contract had inherent limitations in controlling costs. Also, adequate attention was not given to establishing an appropriate performance baseline or ensuring that reporting mechanisms to monitor progress and track costs were in place. Further, officials did not provide adequate oversight of the project to ensure that contractor performance problems were identified in a timely manner, or that the problems were corrected before providing additional funds. Of the nearly $1 billion appropriated for the MOX Facility construction project, only about $206 million remains available to actually support construction activities based on current estimates.
  

• Management agreed with the audit recommendations; but noted that while project cost has risen; comparing the current MOX cost estimate to that which appeared in a 2002 report to Congress overstates the cost difference. In addition, management stated that the cost growth associated with the project cannot be fairly attributed to failures in project management. We noted that cost escalation only represents approximately 14 percent of the increase in total project costs. Further, we noted that since 2002, management had not updated any of its reports to Congress to include the cost of escalation for the project.

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