Summary: The Department of Energy (DOE) spent about $3 million to buy 24 defective shipping containers intended to transport transuranic waste to storage sites in New Mexico. The containers were built under a subcontract with Westinghouse, DOE's managing contractor for the Waste Isolation Pilot Plant. While smoothing welded surfaces on the containers, the contractors ground the walls too thin to meet the Nuclear Regulatory Commission's (NRC) approved design. NRC later rejected the thin-walled containers. Concerned that the contractor might declare bankruptcy and jeopardize the opening of the plant, DOE allowed Westinghouse to enter into an agreement with the contractor to build 15 NRC-approved containers and purchase the defective ones. This report details several ineffective contracting practices that led to DOE's purchase of the defective containers. Ineffective oversight by Westinghouse and DOE exacerbated the situation. Historically, DOE has given its contractors wide latitude but has done little oversight. Although DOE is trying to improve its contract-management approach, instituting effective, lasting changes will be difficult.
