United States GAO General Accou.nting Office Wasbhg$on, D.C. 20548 Resources, Conununi~, and Economic Development Division B-282367 April 30,1999 The Honorable F. James Sensenbrenner, Jr. The Honorable George E. Brown, Jr. Ranking Minority Member Committee on Science House of Representatives Subject: Fusion Research: Costs of Ending DOE’s Particination in the International Thermonuclear Exnerimental Reactor Project ADD= Reasonable The International Thermonuclear Experimental Reactor (II’ER) project is an Wernational collaborative project undertaken jointly by the countries with the world’s leading programs for fusion research These countries include the United States: Japan; the Russian Federation; and Euratom, a European consortium of nations. The purpose of the ITER project is to demonstrate the feasibitity of building a fusion reactor to generate energy for peaceful purposes. The United States has formally participated in the ITER project since 1992 and funds a variety of other activities related to fusion research The Department of Energy (DOE) manages the U.S. involvement in the lTER project. Concerned that the engineering design chosen for the fusion reactor is too expensive and that ins&icient progress has beenmade in construction commitments and site selection for I%IR, congressional conferees directed DOE to end the U.S. role in the lTER project. The conferees provided DOE $12.2 million in fiscal year 1999 funding to close out its ITER activities. DOE was directed to use these funds to complete the remaining technology research and development and to conduct an orderly closeout of U.S. participation. You asked us to determine if DOE’s expenses to close out its participation h-t the ITER project were reasonable. In summary, we found that DOE’s plans for an orderly closeout of its ITER activities appear reasonable. In addition to the $12.2 million appropriation, DOE also plans to spend $7.1 milhon of tical year 1998 funds, bringing the total closeout costs to GAO/RCED-99-140R ITER Closeout Costs $19.3 million.’ DOE told us they have a high level of confidence that no additional funds will be needed to dose out all remaining TIER-related activities. Background Today’s nuclear reactors rely on the splitting, or “fission,” of heavy elements to release heat that creates steam to drive electric generators. The-opposite is fusion, when the nuclei of light elements, such as hydrogen are forced together under high temperature and pressure. If fusion can be sustained, this process could release Iarge amounts of energy in the forms of heat and radiation. The resulting heat might be used to produce steam for generating electricity. ITRR is an experimental fusion reactor based on a particular design concept called the ‘%okarnal~”The ITER project arose from the recognition by the countries conducting fusion research that collaboration might result in significant savings by sharing costs and providing an opportunity to learn from the scientific and technical expertise of all the world’s leading experts in nuclear fusion. From discussions that began in 1985,a collaboration of four participants-the United States, Japan, the former Soviet Union, and the European Community-was established under the auspices of the International Atomic Energy Agency- Work on conceptual design activities began in 1988. In 1992, the four parties signed an agreement, which established the start of the formal engineering design activities, which were scheduled to last for 6 years until the agreement expired on July Z&1998. Since 1992,the United States has spent about $350 million on the ITER project. Concerned that the reactor design chosen by the countries participating in the ITER project would be too expensive to build-about $11 billion according to some estimates-the congressional conference committee expressed concern about the value of continued U.S. participation in the project In the conference report on appropriations for energy and water development for fiscal year 1999,the congressional conferees noted that the ITER agreement had expired iu 1998 and directed that DOE not sign an extension of that agreement without the written consent of the authorizing and appropriations committees of the Rouse and the f&ate.* Although the conference committee expressed its support for international collaboration in fusion energy, it provided DOE with funds to perform an “orderly completion of research and development of components” in fiscal year 1999. The conference committee also noted that it expected DOE to “meet its commitment to the de&very and testmg of the central solenoid model car which is an important design component of the experimental reactor. The congressional conferees included $12.2 million to close out ITER-related activities in fiscal year 1999. ‘DOE is using fiscal year 1998 mcosted obligations, which represent the portion of its budget authority that DOE has obligated for goods and services but for which it has not yet incusred costs. As DOE’s contractors receive goods and services, they liquidate or ‘cost” the obligations. However, not all the obligations are costed during a given year, and these uncosted obligations can acmulate from one liscal yeaz to the na ’ HR. Rept No. 105-749, at 100 (1998). 2 GAO/RCED-99-140R ITER Closeout Costs B-282367 DOE’s Closeout Expenditures Appear Reasonable The funds DOE has spent and plans to spend to close out its ITER-related activities appear reasonable. Closeout activities include (1) completing technology R&D commitments; (2) implementing the transition of the design eng,ineers and physicists from the Rome Team into non-lTER work or, where required, paying severance charges; (3) completing project management activities; (4) returning personnel in the Joint Central Team to their home institutions and implementing their transition to non-ITER activities; (5) and closing down the Joint Work Site in San Diego, California. DOE of&ials told us that they are confident that noadditional funds will be needed beyond those the Congress has already provided to close out ah ITER- related activities. Table 1 mmmarizes DOE’s estimates of the costs for these activities. Table 1: DOE’s Estimates of Costs to Close Out ITER-Related Activities, Fiscal Year 7999 Dollars in millions Estimated portion of Estimated total ’ fiscal year 1998 funds funds needed in needed for fiscal year Fiscal year 1999 fiscal year 1999 1999 ctoseout funds provided for for closeout Account categow* activities closeout activities activities Home Team Technology Research $1.7 $8.8 $10.5 and Development Design t 2.3 01 2.3 Project Management .l .3 1 .4 Joint Central Team Secondees” 1 2.7 1 1.9 4.6 ’ Joint Work Site I .3 1 1 .o 1.3 Joint Fund 01 2 .2 Total I $7.1 1 $122 $19.3 _ 7he Home Teamcategory consists of activities performed by U.S. personnel from DOE’s laboratories. educational institutions, and private companies who work at their home institutions. The Joint Central Team category consists of activities involving U.S. personnel who work at the U.S. and overseas Joint Work Sites under the direction of the ITER Director with other ITER stafi from participating countries. %condees are the U.S. personnel assigned to the U.S. and overseas Joint Work Sites. Source: GAO% analysis of DOE’s data Of the $19.3 miNion that DOE estimates it needs to close out all its ITER-related activities, about half ($10.5 million) is for the Technology Research and Development account, which has two key activities. The largest activity entails completing the centi solenoid model coil and shipping it to Japan for instaUation in the test facility. This commitment is expected to require $7.9 milkon from that account. The coil has been completed and was shipped to Japan in February 1999. Completing and testing the divertor cassette--the other major R&D component to be used in the Japanese testfacili~-is estimated to require an additional $.9 million. This cassette will be used in conjunction with the heat transfer plates (which are 3 GAO/BCED-99-140R MYEB Closeout Costs B-282367 being supplied by other participants in the DYERproject) to contain the hot plasma generated during a fusion reaction. DOE officials said they were confident that the estimate to close out this second activity would be adequate and that an additional $1.7 million would be required to close out ail the other R&D activities. The next iargest cost estimate is $4.6 million from the Secondees account to return U.S. scientists and engineers from the Joint Work Sites. As of the end of March 1999, all of these personnel have returned to the United States. Part of the Design account estimate of $2.3 million includes the cost to transition 1aborator.yand university personnel from their ITER-related activities into U.S. domestic fusion program activities to the extent possible. DOE estimates& will need $1.3 million to close its Joint Work Site in San Diego, California, and is confident that no additional funds will be needed to complete this task. To complete R&D activities and to close out U.S. participation in the TI’ER project, DOE officials anticipate they will need $7.1 million of fiscal year 1998 funds in addition to the $12.2 million provided for fiscal year 1999. They will draw these additional funds from the uncosted obligations that had accrued at the end of fiscal year 1998. According to DOE officials, the cognizant congressional committees are aware of their plans to use uncosted obligations for funding fiscal year 1999 ITER- related activities. DOE officials told us that an additional $1 million in uncosted f&al year 1998 obligations for the ITER project will not be needed for closeout costs,‘although additional requirements, such as unanticipated claims Corn vendors or additional expenses to pay for employees’career transitions, may arise. However, DOE officials told us that they expect much of the $1 million in remaining uncosted fiscal year 1998 funds to remain unused by the end of fiscal year 1999, the final year of DOE-funded TIER-related activities. Agency Comments We provided a draft of this report to DOE for review and comment. DOE expressed concern about our characterization of the ITER project as having technical problems. We accept DOE’s explanation that the end of U.S. participation stemmed from the insuf&ient progress that bad been made in construction commitments and site selection for TI’ER, rather than technic4 problems, and have changed our report accordingly. DOE also provided a number of clari&ations that we have incorporated in our report. Enclosure I includes the full text of DOE’s comments. We conducted our review from December 1998 through April 1999 in accordance . with generally accepted government auditing standards. To determine how DOE was using its appropriated funds to close out ITER-related-activities, we interviewed of6cials responsible for the ITER project and examined relevant documents that they provided. 4 GAO/RCED-99-14OR ITEX Closeout Costs B-282367 As arranged with your offices, unless you publicly announce its contents earlier, we plan no further distribution of this report until 16 days after the date of this letter. At that time, we wiIl send copies to the Biu Richardson, Secretary of Energy and Jacob J. Lew, Director, Office: of Management and Budget. We wiu make copies available to other interested parties on request. IXyou or your staff have any questions about this report, please call me at (202) 5123841. This report was prepared by Gary R. Boss and Tom Kin&am. GAO/RCED-99-140B IT’ER Closeout Costs Enclosure I Comments From the Dewrtment of Energy Department of Energy Washington, DC 20585 . April 16, 1999 Ms. ‘SusanKladiva AssociateDirector, Energy, Resources and ScienceIssues Resources,Community and Economic DevelopmentDivision U. S. GeneralAccounting Office Washington, DC 205’48 . Dear Ms. Kladiva: ’ ’ The Department of Energy appreciatesthe opportunity to review and commenton the General . Accounting Office (GAO) draft report entitled: “Fusion Research:Costs of Ending DOE’s Participation in the International ThermonuclearExperimentalReactorProject Ate Reasonable.” . . In the opening paragrapha referenceis made to Congressionalconcernthat, “...ITER is too expensiveand beset with technical problems...:”We believethe phrase“technicalproblems”is prisleadingb&causemost readerswould assumethat this includesscientific and engineering problems. From the House Appropriations CommitteeReport for Fiscal Year 1999,the principal Congressionalconcerns,in addition to cost, are that insufficientprogresshasbeenmadeby the ITER Parties to commit to construction and to establisha site for ITER. Our suggestionis to mention these latter concernsand not use the phrase“technicalproblems.”In fact, with regard to IT’ER technical progress,numerousreviews of ITER by scientistsand engineers,who come from around the world and who are not directly involved with ITER, have concludedthat.ITER would be able to meet its mission. Also, these reviews typically concludethat basedupon resultsfrom the extensiveTIER R&D program and from world-wide plasmaphysicsexperiments,there is high confidencethat the remainingscientific and engineeringissues,which are typical of any high technology project, will be resolved satisfactorily. Minor editorial changesand suggestionsfor enhancedclarity of the report are provided in the. attachment. The Departmenthopes that these commentswill be helpful in preparationof the final report. 6 GAOILZCED-99-140RITEB CloseoutCosts Enclosure I 2 Ifyou have’anyquestions,’ please’contactBonnie La&y on (301) 903-2158. . Sincerely, Martha A. Krebs Director Office of Science Attachment cc: JuanitaMcDufiie, Audit Liaison Team GAOLRCED-99-140R ITER Closeout Costs Enclosure I Attachment Editorial commentsand suggestedcommentsare,pro\;idedbelow: . 1. Page 1. secondDtiaph third line: Change“in” to “of’ to provide consistentusagewith that on page 4. 2. Page 3. Table 1: The following commentsare provided to clarify Table 1: a. Under the main categoriesof Home Teamand Joint Central Team, indent the subi categories. b. Footnote 1, referenceto the Home Teamcategory,should read, “The Home Team categoryconsistsof activities performedby U.S. personnelfrom DOE’s laboratories, educationalinstitutions,and private companiesworking at their home institutions.” c. Footnote 1, referenceto the Joint CentralTeam category, should read, “The Joint Central Team categoryconsistsof activitiesinvolving U.S. personnelworking at the ITER Joint Work Sitesunder the direction of the ITER Director with other ITER stafl?from participatingcountries.” . . d. Footnote 2, changethe word “personnel”to “Joint Central Team personnel.” e. Footnote 3, reviseto, “Secondeesare the U.S. personnel-assignedto the Joint Work Sites.” 3. Page 4. secondDaragraDhsecondline: For clarity change“overseasposts”to “the Joint Work Sites.” 4. Page 4. next to last sentence:For emphasisin discussingthe $1 million in uncosted obligations,change“uncostedobligations”to “uncostedFiscal Year 1998 obligations”and for clarity change“new vendor claims”to “unanticipatedvendor claims.” 5. Page: For emphasis,change“uncostedfunds”to “uncostedFiscal‘Year 1998 funds.” Also, sincethe previousdiscussionsbetweenDOE and GAO, we have used someof these Fiscalyear 1998funds for transition activitiescited in the previous sentenceof the report. To reflect this more current status,we suggestchangingthe word “most” to “much.” (141267) 8 GAO/RCED-99-140R ITER Closeout Costs Ordering Information The first copy of each GAO report and testimony is free. Additional copies are $2 each. Orders should be sent to the following address, accompanied by a check or money order made out to the Superintendent of Documents, when necessary. VISA and Mastercard credit cards are accepted, also. Orders for 100 or more copies to be mailed to a single address are discounted 25 percent. Orders by mail: U.S. General Accounting Office P.O. Box 37050 Washington, DC 20013 or visit: Room 1100 700 4th St. NW (corner of 4th and G Sts. 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Fusion Research: Costs of Ending DOE's Participation in the International Thermonuclear Experimental Reactor Project Appear Reasonable
Published by the Government Accountability Office on 1999-04-30.
Below is a raw (and likely hideous) rendition of the original report. (PDF)