Department of Energy

Since 1993, The Department of Energy (DOE) has paid more than $600 million in benefits to contractor employees separated in workforce restructurings and downsizings at its facilities. Brought on by the end of the Cold War, this downsizing has been carried out using benefits provided by legislation requiring DOE to develop plans for minimizing the impact of downsizing on workers at affected facilities. Members of Congress have raised concerns about the costs associated with DOE's implementation of these plans, particularly as the costs relate to workers hired after the end of the Cold War. This report answers the following questions: What types and amounts of benefits were provided to separated employees? What distinctions did DOE make in determining who should receive these benefits? To what extent did the contractors at DOE facilities have to rehire workers or replace them with others having similar skills because the downsizings were not targeted enough to retain critically needed skills? What steps has DOE taken to oversee implementation of the plans?

GAO found that: (1) the 23,800 contractor employees separated since 1993 under DOE's workforce restructuring plans have received an average of $25,600 in benefits; (2) about 88 percent of the costs were for enhanced retirement incentives or severance pay; (3) although similar benefits were offered at most facilities, the value of these benefits varied considerably among locations, reflecting the considerable discretion given to each facility in determining how best to reduce its workforce; (4) more than half of the workforce restructuring plans provided more generous severance pay than would have normally been provided by the contractors under existing contracts, and almost all plans provided other benefits not normally provided by the contractors, such as extended medical insurance; (5) the benefits provided under the plans exceeded those that would have been provided to federal employees in a reduction in force; (6) DOE's guidelines provide that the consideration of specific benefits for contractor employees should take into account both available funding and whether the employee was hired prior to the end of the Cold War, but most plans made no distinction in the benefits provided to employees hired during the Cold War and those hired after the Cold War ended; (7) the preliminary data for fiscal years (FY) 1995 and 1996 suggest that DOE's facilities have improved their ability to retain critically needed skills during downsizing; (8) early restructuring at some facilities resulted in subsequent hiring to fill vacated critical skill positions; (9) while data are not available on the number of critical skill positions that were refilled during FY 1993 and 1994, DOE's preliminary data for FY 1995 and 1996 indicate that about 2 percent of the positions vacated had to be refilled; (10) DOE provides limited oversight over how contractors implement workforce restructuring plans; (11) according to DOE officials, once the workforce restructuring plans are approved, the responsibility for implementation is left with the contractors and little monitoring is done by DOE program personnel; and (12) reviews by DOE's Office of Inspector General and others of DOE's early restructuring efforts have identified problems with the awarding of benefits.