The new contractors at Plant Vogtle, the nuclear powerplant project where completion cost estimates have ballooned to $16 billion, know that the eyes of the world’s construction and engineering industry, not to mention Georgia Power ratepayers, are upon them. So far, things have not gone well for the country’s first nuclear expansion in approximately 30 years—a sister project to South Carolina utility SCANA/Santee Cooper’s expansion of its V.C. Summer nuclear plant in Jenkinsville, S.C. More than three years behind its original schedule and significantly over budget, the Vogtle project near Waynesboro, Ga., has endured notable construction quality deficits pinned to several vendors, a legal battle between the owner and the former contractor over disputed costs as well as highly public criticism from both the state’s construction monitor and watchdog groups.
Even the project’s current extended in-service dates of June 2019 and June 2020, for Vogtle Units 3 and 4, respectively, were recently stirring doubts from Georgia construction monitors.
For instance, in joint testimony submitted last November, Public Service Commission (PSC) analyst Steven Roetger and independent construction monitor William Jacobs continued to express skepticism that the contractor could make up lost time by noting “significant negative variance” to Unit 3’s critical path milestones and similar delays related to Unit 4.
However, the contractor leading the Vogtle project during that period, CB&I, is now mostly gone. (The firm’s Lake Charles, La., plant remains a supplier.) That move, effective in January (ENR 1/29/16), was preceded by a settlement between the project owner and CB&I that resolved their legal battle over disputed costs. Georgia Power spokesman Jacob Hawkins estimated claims at $1.5 billion, noting that the total “could’ve gone higher.”
Under the settlement agreement—which still requires approval by the Georgia PSC—the engineering, procurement and construction-management costs for the Vogtle units will increase by $915 million. That figure includes $100 million for change orders related to added cybersecurity work. Georgia Power, owner of 45.7% of the project, will pay $350 million of that amount.
CB&I subsequently sold its U.S. nuclear business—including the South Carolina project—for $161 million to Westinghouse, which takes over as prime contractor for both projects, in partnership with its new contractor, Fluor Corp. At Vogtle, the switch is shaking up the nuclear expansion’s productivity from top to bottom as contractors strive to turn the project around and meet the hard-and-fast deadline dates, builders say.
“We know how important these projects are to our customers, to the ratepayers of South Carolina and Georgia, and we will do what we need to do to be successful,” says Jeff Benjamin, senior vice president with Westinghouse. Remarking on the new working relationship with Fluor, he adds, “We are all now rowing in the same direction. It’s much more of a constructive, collaborative approach to getting work done.”
Fluor officials know the project team needs to produce positive change as soon as possible.
“It’s the owners’ and Westinghouse’s desire to see a step-change in performance here very quickly,” says Fluor senior vice president and Vogtle site director Darrell Waters, who previously oversaw the ongoing, $3.1-billion Tappan Zee Bridge project in New York. “We are confident that we can change this project.”
Big Change
Successfully changing the project, as Waters says, is critical, due to the implementation of a new resolution covering costs and schedule. On the one hand, while this new agreement enacts stricter invoice requirements, it also requires the project owners to pay 100% of invoices. If Georgia Power, for instance, questions an expense under $25 million, a newly created dispute resolution board would rule on the matter within 14 days. Expenses over $25 million that remain in dispute are subject to litigation after nuclear fuel load, according to Georgia Power.
The new agreement also increases liquidated damage amounts, which will now be calculated relative to the scheduled dates for nuclear fuel load, rather than substantial completion dates, according to Georgia Power’s application to the state for amendment approval. The dates established for fuel load for Units 3 and 4 are Dec. 31, 2018, and Dec. 31, 2019, respectively.
In short, failure to make up ground on the project’s daunting schedule will cause financial pain for Vogtle’s builders.
Key to the new contracting arrangement, say project officials, is the agreement’s lifting of some restrictions related to the sharing of Vogtle-related information with SCANA. That’s because Westinghouse and Fluor are now effectively managing the Vogtle and V.C. Summer nuclear expansions in a more cooperative fashion.
That process began shortly after last October’s announcement of the legal settlement, with numerous personnel from Georgia Power, SCANA, Westinghouse and Fluor gathering in Columbia, S.C., to pore over construction and engineering details and make plans to effectively restart the pair of projects.
“We took every function on the job, looked at the current state of those functions, and then defined their future state in order to increase our performance on the job and meet the milestone dates,” Waters explains.
Fluor and Westinghouse put together assessment teams focused on more than 20 different project functions, such as welding, rigging, nondestructive examination, project controls and supply-chain management.
“A lot of those work streams had issues,” Waters says. The functional area assessment teams are still investigating the gaps between current and future practices. Then they will present recommendations aimed at eliminating those gaps to a board comprised of leaders of both projects.
To date, more than 100 specific actions and recommendations are being implemented or considered, says Westinghouse’s Benjamin. One example of a small but potentially significant change relates to the development of work packages, which previously required as many as three 4-in. binders, he says. Worse, the work packages often weren’t well organized.
“One of the very first actions we took was to greatly streamline and improve that work planning process, and to better organize and better display the work package information so it’s easier to execute,” he explains. After eliciting input from trades working on these sites, Westinghouse and Fluor revamped the packages, refocusing them around specific plant areas.
Says Waters: “We’re seeking their input to our means and methods. They are the people building the job, and we’re engaging them to the fullest extent here. That’s part of our strategy.”
The biggest future change will involve the thousands of craft workers at both sites, the number of which contractors plan to increase “significantly” during 2016, says Waters. (According to Georgia Power, in 2015 more than 5,000 Vogtle workers logged approximately 11 million man-hours without a lost-time incident.)
At present, Fluor and Westinghouse are calculating the number of additional workers they’ll need to accelerate the projects and are communicating with local and national building trades groups.
The contractors plan to go to two full shifts on critical path, or near-critical path areas, utilizing either 5-day, 12-hour work weeks or even “6-12s,” where applicable. Previously, the CB&I-led management made only limited use of second shifts, claims Waters. The Westinghouse-Fluor team is also opening “additional work-fronts,” which Waters defines as “areas that haven’t been addressed due to the previous regime’s manpower planning.”
In its 14th Vogtle Construction Monitoring Report, released in February, Georgia Power identified other strategies that the contracting team plans to implement to make up lost time, such as combining concrete placements to minimize curing times and installing structures over construction areas, such as the nuclear island, in order to remain productive during inclement weather.
The utility also reports that contractors will resequence some vendor deliveries so as to better optimize the fabrication and onsite assembly schedule.
Positives
Over the project’s course, Vogtle vendors have struggled, either in terms of delivering materials that meet the extreme tolerances inherent to nuclear construction or else in the rigid documentation that’s also required. (Essentially, all sitework must be performed exactly in line with plans filed with the Nuclear Regulatory Commission, according to Georgia Power officials. For example, even if the onsite work is built to the highest quality, it must be redone if it doesn’t match plans exactly.)
Entering into 2016, Benjamin says numerous vendors are providing both better quality and improved delivery. They include Newport News Industrial, which is supplying wall panels for the nuclear shield building, and Vigor, a fabricator of structural modules.
One of the project’s more problem-plagued vendors has been CB&I’s Lake Charles, La., plant, which produces prefabricated wall and floor sections, called structural submodules, for the CA20 module, a component of the AP1000 reactor design. That facility has experienced numerous quality-control issues in feeding both the Vogtle and V.C. Summer projects, including an instance of workers conspiring to cheat welder certification tests. Additionally, in 2013 Georgia Power implemented a stop-work order for the Lake Charles plant due to quality assurance deficiencies. That same year, the NRC took action requiring CB&I to reform the plant’s workplace culture.
Today, the vendor continues to earn close monitoring. “We have a team of our experts deployed working with and through Lake Charles,” Benjamin says. “We’re doing everything we can to make sure that the quality of the material that comes out of Lake Charles meets the needs of the project.”
So far, other project vendors appear to be stepping up their performance, says Waters, who reports increased output from the Vogtle site’s module assembly building. “That’s a function of the quality (of materials) coming in and the level of effort applied,” he says. “Between the two, things are pointing in the right direction.”
Contractors appear to be off to an auspicious start. In the first week of March, says Waters, contractors overachieved according to plan and recorded the highest earned value—a measure that compares work achieved versus work planned—that the Vogtle project has achieved since it started construction.
