Select Committee on Defence Seventh Special Report

ANNEX B:Building A91 and Radioactive Liquid Effluent Treatment Plant—Key Lessons Learnt
Issue Lesson/Resolution
a. The A91 requirement was based on a flawed analysis. It was too complex and ambitious; lack of adequate external knowledge and controls resulted in inadequate scrutiny and accountability; and there was only limited consideration of an alternative, related project that would have reduced the A91 requirement by two thirds. All projects are now subject to rigorous scrutiny through IAB approvals procedures. The requirement and the options for meeting them are scrutinised by a wide range of stakeholders.
b. No investment appraisal was undertaken. In 1991 a decision point was reached, but an alternative option was dismissed by senior management without adequate examination of its merits. Investment appraisals are prepared for every new facility to support the business case for each under IAB procedures. Costs of options are now supported by 3 point estimates and rigorously scrutinised for risk and assumptions.
c. Perceived production pressures led to construction work commencing before the plant design was complete. This led to cost and time delays later in the programme. The IPT maintains a project plan and risk register. These are reviewed regularly and ensure that adequate planning is undertaken before irreversible commitments are made.
d. Processing technology of A91 was not tested until commissioning when deficiencies were identified. A pilot plant may have highlighted the problems. Where new technologies are employed these are rigorously tested and proven before and during the demonstration phase within the CADMID cycle before they are incorporated irrevocably into designs.
e. Management and Contractual relations were complicated and inefficient, leading to disrupted timescales and cost overruns. Current AWE contract makes clear the respective responsibilities of the MOD and the contractor. MOD does not seek to interfere with the contractor's supplier selection.
f. Poor commissioning practices led to liquid stagnation, microbes and corrosion. Previous mistakes were repeated in this process. Satisfactory commissioning standards agreed at the outset. Encourage contractors to adopt LFE practices.
g. Cost escalation and delays occurred in the early 1980s due to shortages of the special steel required and skilled manpower. Conduct adequate risk analysis and early survey of industrial capacity.
h. Modifications identified as necessary in the mid 1980s may have been successful if the work had been carried out in accordance with the project definition report. The MOD devolved all responsibility to the subcontractor, maintaining only limited oversight of the work. Current AWE contract provides clear definition of responsibilities. Performance and payment arrangements demand regular review and high visibility of progress. Implementation of Earned Value Management will greatly assist this process.
i. A91 was to be a flagship project to show that AWE was serious about health and safety. As time elapsed, the perceived imperative to demonstrate this to an external audience was pursued at the expense of value-for-money discipline. Smart Acquisition incorporates a demanding IAB approvals process coupled with a requirement to monitor and re-examine investments against pre-agreed parameters. Specific approvals arrangements have been agreed by the IAB for all AWE facilities projects.

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Prepared 22 June 2006