Audit cites costly missteps in security project at Nevada nuclear complex

WASHINGTON — Upgraded security for one of the most sensitive laboratories in the government’s nuclear weapons complex quadrupled in cost and fell years behind schedule before it was put on hold to await a restart, according to an audit made public Wednesday.

The Department of Energy inspector general said missteps by National Security Technologies LLC, the management contractor at the Nevada National Security Site, led to “significant schedule delays and cost increases” in replacing an aging security system with a state-of-the art one called Argus.

The audit did not specify a location for the project within the sprawling installation about 65 miles northwest of Las Vegas. But congressional budget documents indicate the National Nuclear Security Administration was looking to install Argus at the Device Assembly Facility, a warren of underground and heavily secured buildings that is a focal point of nuclear explosives experiments.

The Argus project was initiated in November 2010 with an estimated cost of $8.4 million and expected completion date of October 2011, according to the audit.

By 2012, costs had grown to an estimated $17.8 million, including a doubling of projected labor costs to $10 million from $5 million. Contingency costs increased to $3.5 million from about $800,000.

In 2013, new requirements for security systems added another $4.9 million.

The Argus project was put in hold in May 2014 for lack of funding. At that point the security installation was set to cost $35.3 million — four times the initial cost.

The Nuclear Security Administration and the Nevada contractor told the inspector general they have reorganized the project and asked Congress to restart funding. If the money is secured, the project is expected to resume in March 2016 and be completed by September 2019.

In the meantime, the test site “has continued to rely on an outdated security system with backup countermeasures to ensure security is maintained,” the inspector general said.

“In our opinion, this approach may not be the most efficient or cost effective method to meet NNSS security requirements,” the report said.

A nine-page audit report identified NSTec shortcomings. It said the contractor did not fulfill its role to integrate its work and work performed by security contractor Centerra Nevada, formerly known as Wackenhut Services Inc.

The project went through five managers. Also auditors said they were told by the Nuclear Security Administration that NSTec inexperience with complex projects led the contractor to underestimate the challenge. Auditors also cited poor communications between NSTec managers and federal officials who head the Nuclear Security Administration’s Nevada Field Office.

Contact Review-Journal Washington Bureau Chief Steve Tetreault at stetreault@reviewjournal.com or 202-783-1760. Find him on Twitter: @STetreaultDC.