Environmental Management

In order to better manage the billions of dollars it is spending to clean up the nation's nuclear weapons complex, the Energy Department (DOE) has begun several productivity improvements. One such improvement involved the hiring of up to 1,600 new employees, who are expected to save millions of dollars by replacing contractor staff and improving the productivity of the environmental cleanup. This report reviews DOE's process for hiring the new employees. GAO (1) identifies the process DOE used to justify the new hires, (2) determines whether DOE's justifications support the claimed cost savings and productivity improvements, and (3) discuses how DOE plans to ensure that the expected cost savings and productivity improvements will be achieved.

GAO found that: (1) DOE used a competitive bidding process to justify the allocation of 1,200 new positions in its field and headquarters offices; (2) the offices requested 1,575 new staff and estimated that the new staff could save over $1.2 billion dollars in fiscal years (FY) 1995 and 1996, resulting from increased federal oversight of contractors and greater federal involvement in contract management; (3) DOE lowered the 2-year savings estimate to about $890 million, not including the $84 million annually in compensation for the 1,200 new staff; (4) DOE did not adequately justify about $900 million in savings from productivity improvements; (5) although DOE is unsure of the justifications, it is reducing its Environmental Management Office's budget by about $300 million in FY 1995, before seeing if productivity improvements occur; and (6) DOE is developing procedures to measure productivity improvements and resulting cost savings the new staff are expected to achieve.