Introduction
For nearly 37 years, the Department of Energy (DOE) Fernald site near Cincinnati, Ohio produced over 500 million pounds of high-purity uranium metal products for the U.S. defense program. The site generated over 6 million tons of liquid and solid wastes and emitted over 1 million pounds of uranium into the atmosphere from its production stacks while accomplishing its Cold War mission. On December 7, 1984 the Fernald site issued the first-ever DOE report to the National Response Center declaring the release of over 250 pounds of uranium over a one-month period from a production dust-collection system. This report brought with it unprecedented scrutiny and inquiries from the local and national environmental agencies, and the national and international press. This single event instigated a reassessment within the DOE of its previous policies regarding information disclosure and public involvement at its weapons complex sites. At Fernald, the extent of historical releases and information on the waste inventories and known environmental contamination at the site were subsequently released to the public, creating an atmosphere of mistrust on the part of the community and the environmental regulators for the DOE and operations at the facility.
Because of this pollution, Fernald was added in 1989 to the National Priorities List of Superfund Sites most in need of cleanup. In 1992, Fluor was selected as the management contractor for operations at the Fernald site responsible for the completion of the ongoing environmental studies, restoration of public confidence in the activities of the facility, the development and negotiation of cleanup remedies in cooperation with the regulators and the community, and the safe implementation of the selected cleanup plans. This contract provided that Fluor transition the existing 3,000-person incumbent production workforce through training and mentoring into workers directly supporting the completion of the cleanup mission. In 1996, following the successful issuance of consensus decisions on the selected cleanup remedies for implementation at the Fernald site, Fluor approached the DOE with a bold and innovative proposal: establish a set funding level that permits the efficient execution of the cleanup scope, so Fluor could complete remediation and restoration of the site within a decade at a savings of $7.8 billion. This proposal became the foundation of the DOE’s accelerated cleanup program, and was adopted as a congressional mandate. In recognition of their successul accelerated cleanup of the Fernald site, Fluor was awarded a closure contract for the Fernald site in 2000 to complete the final remediation, restoration, and transition of the site to the DOE Legacy Management Program before the end of calendar year 2006, at a cost not to exceed $1.91 billion.
This first-of-a-kind megaproject required unique and complex project management applications that helped set the standard for similar projects in the future.
The Fernald Site in Ohio – Before and After
Fluor’s Project Management Strategy
In response to these closure challenges, Fluor developed a 13-part strategy to safely accelerate work and more efficiently use the available funding and other resources. Implementation of this strategy required a dramatic culture change at Fernald, from a “government job” mindset to an entrepreneurial/commercial model. Each area provided an opportunity to plan or manage the work more effectively, accelerate the schedule and minimize the total cost. The combination of these improvements placed Fluor on track for an early closure in 2006 that beat initial cost estimates by $7.8 billion. Fluor’s 13-part project management strategy involved the following components:
1. Project Controls/Estimating. To control budgeting and funding allocation, authorize and control work, and assess project performance, Fluor integrated Fernald’s procedures, business systems, project planning and execution, and site-wide safety and quality assurance requirements into a comprehensive management tool called the “Fernald Toolbox.” The toolbox comprised integrated systems that allowed the Fernald team to perform needs assessments, manage resources, and evaluate the impact of proposed changes on a real-time basis. It interfaced directly with the site’s accounting and human resources systems, promoting work efficiency by managing project interrelationships, resource demands, and complex day-to-day logistics. This innovative approach allowed Fluor to manage a $1.911 billion baseline for its closure contract with less than a 2% cost variance over the six-year project duration.
2. Funding. As part of the closure contract, DOE provided a consistent funding level of $324 million per year to allow greater certainty in the planning of future work. Fluor developed and oversaw the funds management process that allocated the available funds to various ongoing site projects, providing funding priority to critical-path projects to meet the target schedule for closure. To review and monitor projected funding forecasts, Fluor conducted monthly project meetings and developed and maintained a prioritized “wish list” of field work that could be quickly executed if new funding sources were allocated.
3. Austerity Program. Fluor implemented an austerity program that established a single point of contact for all site purchases and expenditures. This contact had the authority to scrutinize all requisitions to separate needs versus luxuries and disapprove expenditures that did not directly contribute to the safe, least-cost, accelerated closure of the site. As a result, Fluor accelerated $36.6 million of work in 2004 that it had scheduled for Fiscal Year 2005. The program produced $12 million to $15 million in annual savings during a three-year period (FY 2001, FY 2002, FY 2003 baselines), in addition to the $36 million in FY 2004.
4. Risk Management. The leadership team at Fluor initiated a Risk Management Plan to help manage and reduce project risk at Fernald. The Risk Management Plan provided a disciplined approach to identifying, analyzing, and quantifying the various internal and external risks to achieving the project baseline, and assisted in determining if the risks identified were avoidable and/or manageable. Identified risks were monitored in the Quarterly Critical Analysis reviews and were re-assessed and modified as necessary. This risk management program was an integral part of the day-to-day planning and management of the project. Risk handling and mitigation strategies to address areas of high uncertainty and critical elements of risk were incorporated into the baseline plans to provide needed focus and improve certainty in delivery.
5. Labor Planning/Forecasting Tool. With over 70% of site baseline cost attributed to labor, it was critical that the maximum productive value be gained from its effective use. The challenge to Fluor was maintaining the right number and skills mix to complete the job while reducing the size of the workforce. Additionally, it was imperative that the project control and human resource systems support the proactive reallocation of personnel based upon the changing priorities and needs of the project. To address this challenge, Fluor developed a labor-planning methodology customized for a closure project that allowed project managers, human resources, project controls, and space management to forecast long-term project requirements, identify specific skills mix to accomplish the work through closure, and assign specific end dates to each team member. This labor-planning process provided a systematic and defendable process for reducing the site’s workforce from approximately 2,000 personnel to 0 over a six-year period. Fluor saved $27 million over 19 months of the project by revising Fernald’s labor plan through closure and reallocating resources to field activities.
6. War Room. To oversee implementation of Fernald’s Closure Plan and achieve the end-tate goals for cost and schedule, Fluor formed a Closure Management Team – a small group of senior managers who were tasked with strategic planning, integrating major cross-cutting initiatives, acting as the project managers’ “watch dog” to assure project performance, and performing workarounds as necessary to maintain end-state targets. To maximize accountability for performance, the team met bi-weekly in a War Room, a central location that contained the latest cost and schedule information displayed on walls so that any interested person, including the client, could walk through the room and review the latest project data.
7. Work Authorization. To control spending and accelerate schedule, Fluor needed to tightly control the authorization of work. Fluor initiated this process by developing a fiscal-year work plan that outlined the work planned for the year, the associated costs, the schedule, and the applicable milestone deadlines. Fluor then used this plan to decide what work would be authorized for that fiscal year. Activities that did not receive work authorization were put on a prioritized “wish list” so authorization could be quickly granted if additional funding became available. The status of authorized work versus available funding was reviewed monthly through the Funds Utilization Report.
8. Claims Management. Strict adherence to the closure contract was vital to accelerating closure. As part of the change from a government culture to an entrepreneurial/commercial model, Fluor conducted special training sessions to brief managers at all levels on the details of the closure contract and how the day-to-day work would have to change to complete the contract successfully. Fluor developed a claims management process to help managers analyze the cost and schedule impacts of directed changes, notify DOE in a timely fashion when they were impacting the contractual scope, ensure that Fluor was compensated adequately for scope changes, modify cost and/or schedule targets as appropriate, and generally assist management in avoiding unrecognized scope.
9. Exit/Transition Planning. At closure, Fluor had to be prepared to hand over all remaining functions, systems, procedures, and requirements to DOE. In order to ensure that the transition was smooth, Fluor developed an end-state site closure plan that: (1) defined all activities required to complete site remediation in 10 years; (2) integrated conflicting drivers (such as regulatory, consent degrees, and funding restrictions) into the most cost-effective plan; (3) defined the what, how, when, and who of the work scope; and (4) provided a detailed critical path schedule and definitive budget. Fluor also prepared individualized “going-out-of-business plans” for projects and support functions that defined labor requirements, potential outsourcing opportunities, and disposition of property, equipment, and records to achieve 2006 closure, and a long-term stewardship plan that included legacy management and post-closure institutional controls.
10. Footprint Reduction. Reducing the size of the Fernald footprint decreased infrastructure costs and allowed general cleanup and disposition of miscellaneous debris that accumulated during the life of the site. To reduce the footprint, Fluor accelerated demobilization, decontamination, and demolition of miscellaneous structures, including vacated office trailers.
11. Space Management. To complete soil remediation at Fernald, all office trailers had to be vacated, decontaminated, demolished, and dispositioned. Fluor aggressively moved all non-field related staff to off-site locations, dispersing employees to separate office buildings in different parts of the city at a time when communication and cooperation were essential to perform work safely and efficiently.
12. Property Disposition. Because DOE owned much of the property at Fernald, there were strict procedures that Fluor followed for reuse and disposition of everything from large equipment to desktop computers. Fluor streamlined this process to expedite the identification and disposition of excess property in order to ensure that it met site closure objectives. When new property was purchased, Fluor implemented a site property management system (including property control, accountability, disposition, and compliance with applicable orders, regulation and procedures) at acquisition and continued until the property was dispositioned. This process allowed Fluor to record accurate data on the amount and status of property and plan for disposition to avoid delaying closure.
13. Records Disposition. Like property disposition, records disposition was subject to DOE and environmental regulations and record retention requirements. Fluor ensured compliance with these requirements while meeting the accelerated closure target through maintaining a site-wide Record Inventory database; assigning a liaison to coordinate between Record Management Services and the projects and/or programs; managing an off-site record center; and maintaining an on-site Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) Administrative Record, post-Record of Decision files, and a DOE public reading room.
Cost and Resource Management for Various Scopes of Work
Managing cost and resources were paramount to the successful overall management of the Fernald project. There were several major components to the scope of the project, one of the biggest being facility closure. Fluor developed a three-phase approach (that is, safe shutdown; utility disconnection and closure; and decontamination and demolition) to safely dismantle and disposition 323 process-related and administrative structures.
A phased closure process was developed to safely isolate and close unnecessary utility systems and de-energize each vacated area. Prior to soil excavation or demolition work, workers established a safe closure zone by deep trenching around the perimeter of each building complex to ensure no live utilities existed. By prioritizing maintenance, porter services, demolition and soil excavation work around geographical areas, Fluor reduced the site operating footprint by 20% and eliminated 40,000 annual surveillance and maintenance hours. This phased process saved $3 million, reduced the schedule by 6 months, and resulted in an energy-safe environment for demolition and excavation teams.
By October 2006, Fluor had placed 3 million cubic yards of contaminated soil and debris in the onsite disposal facility (OSDF), shipped over 1 million tons (201 trains) of contaminated soil and debris to permanent storage, and submitted all certification documents for the Fernald footprint.
Another major part of the project was waste stabilization, handling, and treatment. Since 1992, Fluor has managed the remediation and disposition of over 6.2 million tons of low-level radioactive, hazardous, and mixed wastes generated during Fernald’s production and cleanup operations. In all, 1.2 million tons of radioactive waste was handled and shipped, equivalent to the weight of 18 battleships, from 3 concrete silos, 6 waste pits, a 12-acre concrete waste pad, and a thorium warehouse.
Fluor executed the largest low-level waste shipping campaign in DOE’s history by shipping 9,100 railcars containing 979,000 tons of material from Fernald’s six waste pits to Envirocare—more than 41 million miles without a safety incident. The project involved treating 350,000 tons of waste pit material to meet Envirocare of Utah’s waste acceptance criteria. Fluor also shipped waste by truck an additional 31 million miles without any safety incidents or loss-of-containment accidents.
To accomplish this waste removal, Fluor constructed over $216 million in new infrastructure to support site remediation, including three new facilities with 15 waste-processing systems to treat, package, and handle waste pit material and silos waste; relocating transformers to support continued waste operations; installing seven new haul roads to connect soil excavation areas and the OSDF; installing four miles of rails, four off-site trestles, and a switchyard for rail shipments; and constructing a wastewater treatment system.
The most problematic of the waste material at the Fernald site were contained in three concrete silos at the western property boundary of the facility, less than 1,000 feet from the closest resident. These wastes not only exhibited significant levels of direct radiation but also represented the largest generating source of radioactive radon gas in the world. Remediation of the three silos was Fluor’s largest design effort and remediation effort at Fernald. Fluor performed design, construction management, testing, startup, and readiness on all the silos’ facility construction contracts, using a combination of fixed-price and labor-broker contracts. Two separate and distinct waste forms existed in the silos, one representing a well-sorted, fine-grained slurry termed K-65 materials, and a second representing a well-sorted, fine, bone-dry powdery material termed cold metal oxides. Each project presented significant hazards to the workers and the neighboring community if not properly contained during the retrieval and treatment of the materials.
For the K-65 materials, four individual but linked projects were undertaken to isolate the radioactive radon gas, retrieve the slurried waste and ultimately treat it through cement stabilization, and ship the materials offsite for long-term storage and disposal. The projects to address the K-65 materials included a $98.4 million Accelerated Waste Retrieval Project, which involved a five-story Transfer Tank Area facility containing four 750,000-gallon tanks to hold the retrieved K-65 slurried waste materials; a $12.2 million Radon Control System, which contained a filter house and four carbon beds to remove and effectively treat 98 percent of the radon emissions from the tanks; and finally, a $170 million full-scale cement stabilization facility, which contained a fully automated slurry receipt system, a clarification process, a remote-operated cement stabilization process, and a remote-operated system to containerize the stabilized waste materials. The K-65 projects represented the critical path of the overall Fernald site closure.
A second treatment system was designed, constructed and operated to address the 5,000 cubic yards of powdered cold metal oxides in Silo 3. This system entailed construction of a $26.5 million treatment facility that included a remote-handled pneumatic and mechanical retrieval system for the powdery residues, a moisture additive, and a liquid-binding agent system for reduced material dispersability and metals mobility, and an automated packaging system. To address the substantial uncertainty in the moisture content and physical characteristics of the water material, a fallback waste retrieval technology was designed and deployed with the commissioning of the treatment facility. This backup technology, which involved the installation of a remote-controlled hydraulic excavator, was used in the end to complete the waste retrieval, when a pocket of extremely wet, dense material was encountered in an isolated area of the silo.
Another scope of the project, soil remediation, involved a massive effort to meet EPA health-protective cleanup levels. Fluor and DOE worked closely with regulators and the Fernald Citizens Advisory Board to create a health-protective remedy that reduced soil excavation quantities from 11 square miles to 1.8 square miles, saving $165.6 million in costs.
Fluor completed remediation of 288,838 tons of contaminated soil and debris from staging areas known as Soil Piles 7 and 8. The project involved loading 2,731 railcars of material exceeding waste acceptance levels for on-site disposal and shipping 47 unit trains over 44 million miles to the disposal facility.
Groundwater Restoration involved restoring the contaminated portion of an underlying aquifer to reduce uranium concentration levels to meet Environmental Protection Agency (EPA) drinking water standards. To do this, Fluor designed and operated the largest ion-exchange water treatment facility in the world for removing uranium from groundwater to meet EPA drinking water standards, pumping more than 19 billion gallons of water and removing more than 7,300 pounds of uranium. Fluor was recognized by DOE for an innovative, cost-saving approach that involved downsizing Fernald’s existing water treatment plant to meet long-term restoration of a sole-source drinking water aquifer, saving $5.4 million.
Fluor obtained DOE and regulatory approval of Fernald’s Natural Resource Restoration Plan and Final Land Use Plan to restore over 900 acres of the site to an undeveloped park, fully integrated with remediation.
In all, the project created 81 acres of wetlands and more than 300 acres of prairie to re-establish populations of native fish, birds, reptiles, amphibians, and mammals, and planted more than 67,000 trees, shrubs, and seedlings, representing 100 native species.
Key Elements of Successful Project Management
Unprecedented Schedule Acceleration
Original projections estimated the Fernald cleanup would take 30 years and cost $12 billion, creating a long-term burden to taxpayers and increasing the potential for safety and environmental hazards associated with Fernald’s aging waste structures.
In 1996, Fluor developed one of the first original closure baselines (called the “10-Year Plan”) within the DOE complex, which proposed completing the Fernald cleanup by 2010, based on funding availability. Following DOE’s award of the Fernald Closure Contract in 2000, Fluor further refined the baseline by incorporating ongoing process improvements into the closure strategy, and negotiated contract modifications with DOE to accelerate the closure schedule and reduce project costs.
Fluor declared physical completion of Fernald on October 29, 2006, two months ahead of the already accelerated target schedule and $65 million below the target cost. During a special ceremony to commemorate Fernald’s history and final closure, U.S. Secretary of Energy Samuel Bodman certified site remediation was complete on January 19, 2007.
Fluor saved more than 12 years and $7.8 billion compared to the original, DOE-approved 1992 plan through a series of schedule accelerations, improved project integration, technical innovations and safe field performance, and reduced indirect costs as a percentage of total project costs from over 45% to less than 15%, saving more than $600 million since 2000.
Making Safety an Important Project Management Issue
When Fluor assumed management of Fernald in 1992, the workforce sustained on average 17 lost-time injuries per year. Fluor created a 24-Hour Safety First culture at Fernald that established safety performance goals and emphasized employee accountability for safety, resulting in a dramatic decline in injuries, despite a significant increase in field work and an influx of new construction workers. Under Fluor, Fernald’s safety performance exceeded DOE and national construction industry averages.
The tenets of Integrated Safety Management (ISM) were present at Fernald since the inception of the Safety First initiative and the formation of Safety Work Groups in 1994. As part of its Safety First Program, Fluor assigned all employees (salaried, labor, building trades, and subcontractors) to Safety Work Groups. Through these groups workers could discuss potential safety concerns and areas for improvement during the work-planning phase. Each Safety Work Group was assigned a safety advocate to ensure issues raised by the group were resolved and to alert leadership of potential safety trends or concerns that required management attention. DOE and Fernald project representatives also participated in the safety-planning phase with their Fluor counterparts.
Human Resource Management
Fluor worked to change the traditional operations and maintenance workforce mentality from “production and long-term career minded” to “cleanup and closure minded.” Fluor performed two successful workforce transitions during its 13 years at Fernald—transitioning and retraining a production operations workforce to execute the site’s new cleanup mission and later transitioning the workforce to accept and support site closure.
To facilitate this realignment, Fluor drew over 100 key and essential personnel from its worldwide resources as well as from its teaming partner companies, to bring needed leadership and technical skills to the site. Fluor augmented the existing workforce with nearly 300 subcontractor personnel, who possessed a wide variety of skills needed to support the cleanup work.
To encourage union involvement in mitigating the effect of site closure on represented employees, Fluor worked collaboratively with labor unions, aligning national labor organizations with closure goals, educating local union leaders on new priorities focused on the future, and managing change through the collective bargaining process to integrate project closure, retraining, and workforce transition into labor contracts. Fluor management established strong relationships with union leadership and earned the unions’ support of the Accelerated Cleanup Plan—a critical step in the path to closure. Fluor’s commitment to employee involvement, development, and rewards has allowed the workforce to focus on the difficult work of site closure.
Fluor worked within target funding to provide more than $20 million to retrain workers, equip them with new skills to sustain closure work, and to prepare them for future jobs. Fluor encouraged degree and vocational skill training pursuits by reimbursing employees for tuition costs when successfully completing online and local college degree work, vocational skill improvements classes, and completing professional certification requirements.
Management of Communications and Community Involvement
Communicating to the stakeholders, regulators, employees, the client, and the community was an important part of the Fernald project’s successful conclusion.
Fluor established a public participation program at Fernald that emphasized a shared decision-making process and abandoned the government’s traditional, non-participatory “Decide, Announce, Defend” approach. Fernald’s program became a model within the DOE complex for effective public participation.
The DOE’s first site-specific advisory board dedicated to remediation and closure was also formed, with Fluor leading the effort. The board was successful at building consensus on critical issues affecting long-term site remediation, such as cleanup levels, waste disposal, and final land use.
Conclusion
Transforming the 1,050-acre Fernald site from an environmental liability to a clean and safe natural preserve for public use didn’t happen by luck. Fluor’s innovative project management techniques and constant progress assessment made it possible. The lessons learned from this megaproject not only contributed to its successful completion, they also continue to be used in similar projects throughout the DOE complex.