Nuclear Waste
Better Performance Reporting Needed to Assess DOE's Ability to Achieve the Goals of the Accelerated Cleanup Program Gao ID: GAO-05-764 July 29, 2005In February 2002, following years of rising costs to its nuclear waste cleanup program, the Department of Energy (DOE) announced a new initiative--the accelerated cleanup plan--and committed to reduce costs of cleanup by $50 billion, shorten the cleanup schedule by 35 years, and reduce risks to human health and the environment. GAO reviewed (1) the progress DOE has made under its accelerated cleanup plan, (2) the likelihood DOE will achieve its estimated $50 billion in cost reductions, and (3) whether DOE's performance reporting allows for a full understanding of progress toward achieving the accelerated plan goals.
Since implementing its accelerated cleanup plan, DOE's progress in reducing environmental risks has been mixed. By March 2005, DOE was on track or ahead of schedule for many of the 16 cleanup activities it measures, including packaging nuclear materials for disposition, disposing of low-level waste, and removing buildings. In contrast, DOE was behind its accelerated schedule for 3 challenging and costly activities--disposing of transuranic and radioactive tank wastes and closing tanks that had contained radioactive wastes. These three cleanup activities had technical problems, such as developing waste separation technology, or regulatory issues, such as determining when a storage tank is clean enough to close. Furthermore, DOE has had problems with other treatment and disposal activities not reflected in its performance measures, such as delays in shipping plutonium from sites, resulting in additional costs to secure and store the material. DOE is not likely to achieve the full $50 billion estimated cost reduction, a key goal of the accelerated cleanup plan. First, DOE's method of calculating its $50 billion cost reduction likely overstated the potential reductions. Second, DOE based estimated cost reductions on assumed improvements that are highly uncertain, such as technology development, revised contracting strategies, and regulatory requirements. Third, while DOE expected cost reductions to come from most of its sites, key sites are already experiencing delays and, by the end of fiscal year 2004, had incurred cost increases. Recognizing these problems, DOE no longer cites its $50 billion estimate but still expects to achieve some cost reductions. DOE performance reporting does not allow for an adequate understanding of its progress toward achieving overall cleanup goals because of limitations in how DOE uses its performance measures. First, in its performance reporting, DOE does not clearly link accomplishments with the incurred costs. Second, DOE does not clearly highlight critical activities, such as preparing radioactive tank waste for disposal, that have the greatest impact on progress toward meeting overarching cleanup goals.
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Director: Team: Phone:GAO-05-764, Nuclear Waste: Better Performance Reporting Needed to Assess DOE's Ability to Achieve the Goals of the Accelerated Cleanup Program
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Report to the Chairman and Ranking Minority Member, Subcommittee on
Energy and Water Development, Committee on Appropriations, House of
Representatives:
United States Government Accountability Office:
GAO:
July 2005:
Nuclear Waste:
Better Performance Reporting Needed to Assess DOE's Ability to Achieve
the Goals of the Accelerated Cleanup Program:
GAO-05-764:
GAO Highlights:
Highlights of GAO-05-764, a report to Chairman Hobson and Ranking
Minority Member Visclosky, Subcommittee on Energy and Water
Development, Committee on Appropriations, House of Representatives:
Why GAO Did This Study:
In February 2002, following years of rising costs to its nuclear waste
cleanup program, the Department of Energy (DOE) announced a new
initiative”the accelerated cleanup plan”and committed to reduce costs
of cleanup by $50 billion, shorten the cleanup schedule by 35 years,
and reduce risks to human health and the environment.
GAO reviewed (1) the progress DOE has made under its accelerated
cleanup plan, (2) the likelihood DOE will achieve its estimated $50
billion in cost reductions, and (3) whether DOE‘s performance reporting
allows for a full understanding of progress toward achieving the
accelerated plan goals.
What GAO Found:
Since implementing its accelerated cleanup plan, DOE‘s progress in
reducing environmental risks has been mixed. By March 2005, DOE was on
track or ahead of schedule for many of the 16 cleanup activities it
measures, including packaging nuclear materials for disposition,
disposing of low-level waste, and removing buildings. In contrast, DOE
was behind its accelerated schedule for 3 challenging and costly
activities--disposing of transuranic and radioactive tank wastes and
closing tanks that had contained radioactive wastes. These three
cleanup activities had technical problems, such as developing waste
separation technology, or regulatory issues, such as determining when a
storage tank is clean enough to close. Furthermore, DOE has had
problems with other treatment and disposal activities not reflected in
its performance measures, such as delays in shipping plutonium from
sites, resulting in additional costs to secure and store the material.
DOE is not likely to achieve the full $50 billion estimated cost
reduction, a key goal of the accelerated cleanup plan. First, DOE‘s
method of calculating its $50 billion cost reduction likely overstated
the potential reductions. Second, DOE based estimated cost reductions
on assumed improvements that are highly uncertain, such as technology
development, revised contracting strategies, and regulatory
requirements. Third, while DOE expected cost reductions to come from
most of its sites, key sites are already experiencing delays and, by
the end of fiscal year 2004, had incurred cost increases. Recognizing
these problems, DOE no longer cites its $50 billion estimate but still
expects to achieve some cost reductions.
DOE performance reporting does not allow for an adequate understanding
of its progress toward achieving overall cleanup goals because of
limitations in how DOE uses its performance measures. First, in its
performance reporting, DOE does not clearly link accomplishments with
the incurred costs. Second, DOE does not clearly highlight critical
activities, such as preparing radioactive tank waste for disposal, that
have the greatest impact on progress toward meeting overarching cleanup
goals.
Key Assumptions Contributing to DOE‘s $50 Billion Estimated Cost
Reduction:
[See PDF for image]
[End of figure]
What GAO Recommends:
GAO recommends that DOE (1) improve the linkage between performance
measures so that there is a clearer, discernable relationship between
how much cleanup has been accomplished and costs incurred in doing the
work and (2) identify and highlight in its progress reports to the
Congress and others those performance measures that are the most
critical to assessing overall progress toward meeting accelerated
cleanup plan goals. In commenting on the report, DOE agreed with our
recommendations.
www.gao.gov/cgi-bin/getrpt?GAO-05-764.
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Gene Aloise at (202) 512-
3841 or aloiseg@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
Progress in Accelerating Cleanup at DOE's Sites Has Been Mixed:
DOE Is Unlikely to Achieve Its Estimated $50 Billion in Cost
Reductions:
DOE's Performance Reporting Does Not Clearly Reflect Progress Made
toward Achieving the Overarching Goals of the Accelerated Cleanup Plan:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Scope and Methodology:
Appendix II: DOE's Estimated Cost Reductions under the Accelerated
Cleanup Plan:
Appendix III: Comments from the Department of Energy:
Appendix IV: GAO Contact and Staff Acknowledgments:
Tables:
Table 1: Types, Estimated Quantities, and Planned Treatment and
Disposal Approach for DOE's Surplus Special Nuclear Materials and Waste
Materials:
Table 2: Cleanup Activities for Which DOE Was Ahead of Schedule as of
March 2005:
Table 3: Cleanup Activities for Which DOE Was Generally on Schedule as
of March 2005:
Table 4: Cleanup Activities for Which DOE Is Behind the Accelerated
Schedule as of March 2005:
Table 5: Selected Cleanup Activities Experiencing Problems That Are Not
Included in DOE's Risk Reduction Measures:
Table 6: Comparative Features of DOE's Risk Reduction Measures and Cost
Performance Measures:
Table 7: Performance Information on Idaho National Laboratory
Transuranic Waste Shipments as of March 2005:
Table 8: Accelerated Cleanup Estimates:
Figures:
Figure 1: Contributions of Key Assumptions to DOE's Estimated $50
Billion in Cost Reductions:
Figure 2: DOE's Expected Cost Reduction by Office:
United States Government Accountability Office:
Washington, DC 20548:
July 29, 2005:
The Honorable David L. Hobson:
Chairman:
The Honorable Peter J. Visclosky:
Ranking Minority Member:
Subcommittee on Energy and Water Development:
Committee on Appropriations:
House of Representatives:
The Department of Energy (DOE) is responsible for one of the world's
largest environmental cleanup programs. Decades of nuclear weapons
production have left a legacy of chemical, hazardous, and radioactive
wastes, including high-level and transuranic wastes[Footnote 1] to be
cleaned up at sites across the United States. In 1989, DOE established
the Office of Environmental Remediation and Waste Management (now the
Office of Environmental Management) to address the cleanup of these
wastes. In carrying out the cleanup program, DOE receives regulatory
oversight from various federal agencies, including the Environmental
Protection Agency, the Nuclear Regulatory Commission, and the
Department of Transportation, and the states where DOE's sites are
located.
During the 1990s, we and others criticized DOE's nuclear waste cleanup
program for being expensive, slow, and lacking in commitment and
accountability. In response, DOE implemented or attempted to implement
a number of management initiatives to improve its performance and
address uncontrolled cost and schedule growth. These initiatives
included launching a major reform to its contracting practices in 1994,
establishing an initiative to privatize certain projects in 1995, and
developing an approach to close sites on a compressed schedule in 1996.
These initiatives affected how DOE approached the cleanup work, the
agency's relationship with its contractors, and in some cases, the
schedule for completing cleanup work.
Despite these initiatives, DOE's cleanup program continued to
experience cost and schedule growth. By 2001, DOE's estimates of the
total cost and timeframes for completing its cleanup program had
climbed to about $192 billion[Footnote 2] and up to 70 years to
complete. DOE reported that after having spent over $60 billion
(current dollars) on nuclear waste cleanup since 1989, little progress
had been made toward reducing risks to the public and the environment.
DOE concluded that without significant reform the cleanup program would
continue to experience uncontrolled cost and schedule growth.[Footnote
3]
To address this cost and schedule growth, the Assistant Secretary for
Environmental Management announced a new initiative in February 2002,
to improve management of the program. This initiative--known as the
accelerated cleanup plan--had three main goals: rapidly reducing
environmental risks, decreasing the projected time to clean up sites,
and reducing the overall cost of the cleanup program. To implement the
new initiative, DOE took a number of steps including realigning the
program to focus on rapid reduction of environmental risks; improving
contract management; and restructuring how DOE managed the cleanup
program to better support an accelerated, risk-based approach. Other
changes included implementing procedures that require more discipline
in controlling costs and cleanup schedules and holding DOE managers
more accountable for achieving results.
DOE began implementing the accelerated cleanup plan late in 2002. In a
March 2003 congressional testimony before a House Appropriations
subcommittee, the department declared that its new strategy would
reduce the total cost of the program by an estimated $50
billion.[Footnote 4] DOE also committed to a strict schedule for timely
completion of its cleanup activities by 2035, 35 years earlier than
called for in previous plans. To expedite the acceleration of
activities under this new plan, DOE said it would need increased
funding for its cleanup program in the first 3 years of the accelerated
approach--from fiscal years 2003 through 2005--after which funding
would begin to decline. DOE estimated that by fiscal year 2008, it will
have reduced its annual funding requirements by one-third, to
approximately $4.5 billion per year (constant 2003 dollars), although
the actual amounts requested in the budget would differ due to
inflation.
To improve performance monitoring and reporting on its cleanup
activities, DOE developed and began reporting on progress toward
reducing environmental risks primarily through 16 risk reduction
measures that DOE refers to as "gold chart metrics." These measures
track progress toward completing cleanup activities, such as the
quantities of waste disposed of and the number of buildings demolished
at each DOE site.[Footnote 5] DOE also uses an earned value management
system to monitor progress of about 60 large cleanup projects. Earned
value provides DOE managers with information about whether budgeted
work was performed within cost and schedule parameters. Following
findings by the Office of Management and Budget (OMB) in a performance
review during fiscal year 2005 stating that DOE had not developed
adequate annual cost and schedule performance measures to monitor
progress towards completing the cleanup program, DOE has been working
to more fully implement its earned value management system. This work
includes ensuring all mission-related projects are covered by earned
value management and monitoring these projects against their long-term
costs, rather than the contract period, as DOE currently does.
Given the significant cost of cleaning up DOE's wastes and the
importance of effectively managing the cleanup effort, you asked us to
review the progress DOE has made under its accelerated cleanup plan.
Specifically, our report examines (1) the progress DOE has made in
accelerating cleanup at its sites, (2) the likelihood that DOE will
achieve its estimated $50 billion in cost reductions, and (3) whether
DOE's performance reporting allows for a full understanding of progress
toward achieving the accelerated cleanup plan goals.
To determine what progress DOE has achieved under its accelerated
cleanup plan, we obtained and analyzed DOE's cost, schedule, and earned
value data for each site and each project. In addition, we determined
how DOE developed its performance measures. We also obtained cost,
schedule, and performance information on selected projects from five
DOE sites chosen on the basis of location, cost, and type of waste--the
Hanford Site in Washington state; the Savannah River Site in South
Carolina; the Idaho National Laboratory in Idaho; the Miamisburg
Closure Project in Ohio, and the West Valley Demonstration Project in
New York state. To determine the basis of DOE's estimated $50 billion
in cost reductions, we obtained and evaluated information regarding the
changes that DOE made to its cleanup program and DOE's plan to
implement those changes. We also obtained and analyzed DOE's cost
estimates to determine how, where, and when DOE expects to reduce the
cost and schedule for the cleanup work. We did not adjust the cost
estimates to correct for the time value of money or the effect of
inflation. To evaluate DOE's performance measures, we reviewed reports
and studies on performance measurement and discussed with DOE officials
how the department develops and uses its performance measures. We also
reviewed and analyzed DOE's most recent performance reports and
compared that information to the actual progress documented at various
DOE sites. To assess the reliability of the data provided by DOE, we
obtained and analyzed information about the methods for compiling cost,
schedule and performance data, and steps taken to ensure its accuracy
and completeness from the sites we included in our analysis. A more
detailed description of our scope and methodology is presented in
appendix I. We performed our work between June 2004 and July 2005 in
accordance with generally accepted government auditing standards,
including an assessment of data reliability.
Results in Brief:
DOE has made progress in the 2 years since it implemented the
accelerated cleanup plan, but the most difficult cleanup challenges
remain. Specifically, by March 2005, 13 of the 16 risk reduction
measures--including packaging nuclear materials for disposition,
removing buildings, and disposing of low-level and low-level mixed
waste--had met, nearly met, or were ahead of the accelerated cleanup
schedule. In contrast, DOE was behind its accelerated schedule for 3
challenging and costly activities--disposing of transuranic waste,
disposing of radioactive tank waste, and closing tanks that had
contained radioactive wastes. These 3 cleanup activities often had
technical problems, such as developing waste separation technology, or
regulatory issues such as determining when a storage tank is clean
enough to close. Furthermore, DOE has had problems with other treatment
and disposal activities not reflected in its performance measures, such
as delays in shipping plutonium from sites, resulting in additional
costs to continue storing and securing the material until long-term
storage issues are resolved.
DOE will likely not fully achieve its projected $50 billion in cost
reductions, a key goal of the accelerated cleanup plan, for three main
reasons. First, DOE's method for calculating cost reductions does not
take into account the time value of money. Considering the time value
of money, the actual cost reduction from the accelerated plan, if
implemented as intended, would likely be much lower. For example, in
2004, we recalculated DOE's estimated cost reduction for the Hanford
waste treatment plant, which DOE estimated to be $20 billion, not
considering the time value of money. However, considering the time
value of money, the estimated cost reduction was reduced by about 40
percent to about $12 billion. Second, DOE based the estimated cost
reductions on the assumption that there would be improvements in
cleanup technology, revisions to contracting strategies, and changes in
regulatory requirements that govern the level of required cleanup.
However, evidence is mounting that some of the improvements and
regulatory changes may not be realized. For example, some of the
technologies, such as new methods for treating a portion of the tank
waste at Hanford, are not fully tested and the costs to operate the
technology are not known. Although ultimately these technologies may be
effective in treating waste, it is uncertain whether anticipated cost
reductions will be realized. Additionally, regulators--such as the
state of New Mexico and the Environmental Protection Agency--have not
yet approved some of DOE's proposed regulatory revisions, such as its
plan to send certain types of tank waste now located at the Idaho
National Laboratory to the Waste Isolation Pilot Plant in New Mexico.
Third, DOE expected nearly all of the total cost reductions to come
from accelerating cleanup at three major sites--Hanford in Washington
state, Savannah River in South Carolina, and the Idaho National
Laboratory. However, DOE is behind schedule in some of its cleanup
activities at these sites and cost estimates for completing the work
are rising. In addition, DOE's planned high-level waste repository at
Yucca Mountain in Nevada is expected to be delayed at least 2 years,
which could also increase cleanup costs. Recognizing the uncertainty of
achieving the full $50 billion cost reduction it committed to achieving
with its accelerated plan, DOE has recently stopped citing a specific
estimate of potential cost reductions it believes it can achieve;
however, the department still believes it will achieve some cost
reductions with its accelerated strategy.
DOE's performance reporting does not clearly reflect progress made
toward the overall cleanup plan goals of a $129 billion total program
cost and a 2035 completion date, because of two main shortcomings.
* First, in reporting on its progress, DOE does not establish how
accomplishments made in addressing wastes, which DOE measures through
its risk reduction measures, are associated with the costs incurred,
which DOE measures through its cost performance measures. This makes it
difficult to clearly understand whether cleanup activities, such as the
amount of waste disposed of, were accomplished within projected costs.
For example, as of March 2005, DOE's Idaho National Laboratory was more
than one year--or more than 1,000 shipments--behind the planned number
of shipments of transuranic waste to a repository. However, DOE had no
corresponding indicator to show how this delay has affected estimated
costs.
* Second, DOE's performance reporting does not clearly highlight that
certain performance measures are more important than others in
indicating whether DOE is on track toward achieving its overall
performance goals. For example, DOE expects a significant portion of
its cost reductions to result from improvements in addressing
radioactive tank wastes and transuranic wastes. Radioactive tank wastes
alone account for almost $30 billion of DOE's estimated $50 billion
cost reductions--or 60 percent--under the accelerated plan. Although
DOE's performance measures show that DOE has fallen behind in both
transuranic and radioactive tank waste cleanup activities, its
performance reporting does not highlight the relative significance that
these critical measures have in providing a full understanding of
overall progress toward the goals of the accelerated cleanup plan.
Falling behind in these activities could significantly add to overall
cleanup costs and, therefore, make it difficult for DOE to achieve its
$129 billion overall cost target.
* We are recommending that the Secretary of Energy ensure that DOE's
performance reporting (1) includes a clearer, discernible relationship
between cleanup accomplishments and cost and (2) highlights the status
of performance measures that are the most critical to achieving cost
and schedule goals. DOE agreed with our recommendations to ensure its
performance reporting provides a clearer linkage between cleanup
accomplishments and costs incurred, and highlights performance measures
most critical to achieving its accelerated goals.
Background:
The Department of Energy's Office of Environmental Management is
responsible for addressing nuclear and hazardous wastes, including some
of the most dangerously radioactive wastes in the world, and special
nuclear materials, such as plutonium, resulting from more than 50 years
of nuclear weapons production. DOE has planned or implemented a variety
of treatment and disposal approaches, depending on the nature and
extent of the waste (see table 1).
Table 1: Types, Estimated Quantities, and Planned Treatment and
Disposal Approach for DOE's Surplus Special Nuclear Materials and Waste
Materials:
Description: Special nuclear materials: Enriched uranium;
Estimate: 8,428 containers;
Planned treatment and disposal approach: Blend high quality material
into reactor fuel.
Description: Special nuclear materials: Plutonium; Plutonium/uranium
residues;
Estimate: 5,850 containers; 107,782 kilograms;
Planned treatment and disposal approach: Stabilize, package, and
dispose in either the transuranic or high-level waste repositories.
Description: Special nuclear materials: Depleted uranium and uranium;
Estimate: 685,161 metric tons;
Planned treatment and disposal approach: Convert to a stable form,
package, and dispose as low-level waste or reuse.
Description: Radioactive tank waste[A]: Liquid, saltcake, and sludges
stored in tanks;
Estimate: 88 million gallons;
Planned treatment and disposal approach: Separate waste into high-level
and low-activity portions. Stabilize the high- level portion in a
glasslike material (vitrification) and package in canisters and then
dispose in planned high-level waste repository. Treat low-activity
portion and bury in near surface burial grounds, generally at sites
where it is currently located.
Description: Radioactive tank waste[A]: Sodium-bearing tank waste;
Estimate: 900,000 gallons;
Planned treatment and disposal approach: Treat, package, and dispose in
a geologic repository.
Description: Radioactive tank waste[A]: Vitrified waste;
Estimate: 18,735 canisters;
Planned treatment and disposal approach: Dispose of vitrified waste at
planned high-level waste repository.
Description: Radioactive tank waste[A]: Solidified low-activity waste;
Estimate: About 1,000,000 cubic meters[B];
Planned treatment and disposal approach: Dispose in near surface burial
grounds at sites where it is currently located.
Description: Radioactive tank waste[A]: Dried high-level waste called
calcine;
Estimate: 4,400 cubic meters;
Planned treatment and disposal approach: Treat, if necessary, repackage
and dispose in planned repository.
Description: Transuranic waste: Various types of materials contaminated
with plutonium and other man-made elements and may also contain
hazardous waste;
Estimate: 141,892 cubic meters;
Planned treatment and disposal approach: Treat and repackage, as
necessary, and dispose in transuranic waste repository.
Description: Low-level and low-level mixed waste: Various waste
material including soil, building debris, operational by-products;
Estimate: 1,190,463 cubic meters;
Planned treatment and disposal approach: Treat, repackage and bury in
DOE or commercial near surface disposal facilities. Actual techniques
to be used depend on the material.
Description: Hazardous waste: Chemicals, heavy metals and other
materials;
Estimate: No comprehensive measure;
Planned treatment and disposal approach: Recycle, incinerate, or use
other treatment approach and dispose at DOE or commercial facilities.
Description: Spent nuclear fuel: Fuel rods stored in pools and dry
storage casks;
Estimate: 2,420 metric tons;
Planned treatment and disposal approach: Prepare fuel, package, and
dispose in planned high-level waste repository.
Description: Facilities: Nuclear facilities such as reactors,
processing facilities and storage buildings; Radioactive facilities
such as labs, shops, and warehouses; Industrial facilities of many
different types;
Estimate: 515 facilities; ; 822 facilities; 3,103 facilities;
Planned treatment and disposal approach: Decontaminate and decommission
followed by demolition or reuse.
Description: Facilities: Underground radioactive waste tanks;
Estimate: 241 tanks;
Planned treatment and disposal approach: Empty tanks and fill with
grout or other material to prevent collapse.
Description: Waste site: Burial grounds, dried ponds, spills and leaks,
and many other types of sites;
Estimate: 10,416 sites;
Planned treatment and disposal approach: Depending on the nature and
extent of contamination, approach varies from removal and disposal of
waste material to release of site for reuse.
Source: Compiled by GAO from DOE data.
[A] DOE has traditionally managed all of the wastes in its tanks as
high-level waste because the waste resulted primarily from the
reprocessing of spent nuclear fuel and contains significant amounts of
radioactivity. However, DOE based its approach to treatment and
disposal of this waste on separating the high-activity portion from the
low-activity portion, allowing DOE to use less costly treatment
approaches for the majority of what is now managed as high-level waste.
In this report, we refer to the tank waste--which DOE manages as high-
level waste--as "radioactive tank waste."
[B] DOE's lifecycle estimate of solidified low-activity waste is based
on anticipated separation efficiencies and treatment processes.
[End of table]
Numerous legal and regulatory requirements govern various aspects of
DOE's cleanup effort. Many of the cleanup activities are governed by
the Comprehensive Environmental Response, Compensation, and Liability
Act of 1980, as amended, and the Resource Conservation and Recovery Act
of 1976, as amended, through various agreements with regulators.
Additional laws affecting high-level waste and transuranic wastes are
the Nuclear Waste Policy Act of 1982, as amended, which establishes the
program to develop a geologic repository for storing high-level waste
and spent nuclear fuel, and the Waste Isolation Pilot Plant Land
Withdrawal Act, which establishes the requirements for operation of a
repository for transuranic wastes. In addition, under the Federal
Facility Compliance Act of 1992, DOE has entered into agreements with
federal and state regulators that establish milestones for
accomplishing specified cleanup activities and a mechanism to obtain
approval to change priorities and approaches. For example, under the
agreement at Hanford, 10 percent of the tank waste is to be processed
by 2018 and a report on the plans for the remaining 90 percent was due
to regulators in January 2005, but now has been extended to June 30,
2006.
DOE, under the direction of the Secretary of Energy, carries out its
environmental cleanup program under the leadership of the Assistant
Secretary for Environmental Management and in consultation with a
variety of stakeholders. In addition to U.S. Environmental Protection
Agency and state environmental and health agencies that have regulatory
authority in states where the sites are located, stakeholders include
county and local governmental agencies, DOE community advisory groups,
and Native American tribes. DOE's Office of Environmental Management is
primarily responsible for cleaning up the wastes, largely through the
use of contractors overseen by DOE staff. In addition, DOE's Office of
Civilian Radioactive Waste Management is responsible for the high-level
waste repository being developed at Yucca Mountain in Nevada, which is
the repository where DOE plans to dispose of spent nuclear fuel and
high-level waste. DOE's Office of Legacy Management, created in 2003,
is responsible for managing DOE's postclosure responsibilities at its
former nuclear weapons production sites to ensure the continued
protection of human health and the environment.
Progress in Accelerating Cleanup at DOE's Sites Has Been Mixed:
Over 2 years after implementing the accelerated cleanup plan, DOE has
made progress in a number of areas, but the most difficult cleanup
challenges remain. By March 2005, DOE was ahead or on its planned
schedule in 13 of 16 risk reduction activities.[Footnote 6] Activities
that had met or were ahead of the accelerated schedule included
packaging nuclear materials for disposition, disposing of low-level and
low-level mixed waste, and removing buildings. In some cases where DOE
was meeting or exceeding current risk reduction targets, only a small
percentage of the overall work had been accomplished. In contrast, DOE
was behind its schedule for key activities that will have a major
impact on DOE's overall cleanup goals. These activities involve some of
the more complex cleanup activities, including disposing of transuranic
waste, treating high-level liquid waste, and closing tanks that had
contained radioactive wastes. These activities account for at least 30
percent of the total expenditures DOE expects on cleanup and more than
half of the cost reductions it hopes to achieve under the accelerated
cleanup plan. Finally, DOE has had problems with other treatment and
disposal activities not reflected in its performance measures, such as
significant delays in shipping plutonium from sites to final storage
locations, and delays in design and construction of key facilities.
Taken together, these results suggest that DOE may already be at risk
of not achieving its accelerated cleanup goals.
Progress Has Been Made on Several Cleanup Activities, Such as Disposing
of Low-Level Waste and Removing Buildings:
DOE's cleanup was ahead of its planned accelerated schedule for several
activities, and other activities appeared to be on track. As of March
2005, DOE was ahead of schedule in 9 risk reduction measures that fell
into the following cleanup categories[Footnote 7]--(1) tearing down and
disposing of facilities, (2) packaging and disposing of special nuclear
materials, (3) cleaning up low-level and low-level mixed waste, and (4)
completing cleanup of specific locations where releases of
contamination occurred. For example, in disposing of low-level and low-
level mixed waste, DOE was more than 181,000 cubic meters--or 35
percent--ahead of its accelerated target goal. Table 2 shows the
progress DOE has made in four categories, as of March 2005.
Table 2: Cleanup Activities for Which DOE Was Ahead of Schedule as of
March 2005:
Risk reduction measure (unit measured): Tearing down and disposing of
facilities: Industrial facilities (number complete);
Lifecycle total[A]: 3,103;
Cumulative units planned as of March 2005: 734;
Cumulative units completed as of March 2005: 985;
Cumulative units ahead as of March 2005: 251.
Risk reduction measure (unit measured): Tearing down and disposing of
facilities: Nuclear facilities (number complete);
Lifecycle total[A]: 515;
Cumulative units planned as of March 2005: 27;
Cumulative units completed as of March 2005: 44;
Cumulative units ahead as of March 2005: 17.
Risk reduction measure (unit measured): Tearing down and disposing of
facilities: Radioactive facilities (number complete);
Lifecycle total[A]: 822;
Cumulative units planned as of March 2005: 180;
Cumulative units completed as of March 2005: 219;
Cumulative units ahead as of March 2005: 39.
Risk reduction measure (unit measured): Special nuclear materials:
Plutonium packaged (number of containers);
Lifecycle total[A]: 5,850;
Cumulative units planned as of March 2005: 5,724;
Cumulative units completed as of March 2005: 6,314;
Cumulative units ahead as of March 2005: 590.
Risk reduction measure (unit measured): Enriched uranium packaged
(number of containers);
Lifecycle total[A]: 8,428;
Cumulative units planned as of March 2005: 3,373;
Cumulative units completed as of March 2005: 4,508;
Cumulative units ahead as of March 2005: 1,135.
Risk reduction measure (unit measured): Plutonium/uranium residues
packaged (kilograms packaged);
Lifecycle total[A]: 107,782;
Cumulative units planned as of March 2005: 107,744;
Cumulative units completed as of March 2005: 107,752;
Cumulative units ahead as of March 2005: 8[B].
Risk reduction measure (unit measured): Depleted uranium and uranium
packaged (metric tons);
Lifecycle total[A]: 685,161;
Cumulative units planned as of March 2005: 4,915;
Cumulative units completed as of March 2005: 9,293;
Cumulative units ahead as of March 2005: 4,378[C].
Risk reduction measure (unit measured): Low-level/low-level mixed
waste: Low-level/low-level mixed waste disposed (cubic meters);
Lifecycle total[A]: 1,190,463;
Cumulative units planned as of March 2005: 524,981;
Cumulative units completed as of March 2005: 706,587;
Cumulative units ahead as of March 2005: 181,606.
Risk reduction measure (unit measured): Areas of Contamination:
Remediation complete (number of contamination areas[D]);
Lifecycle total[A]: 10,416;
Cumulative units planned as of March 2005: 5,425;
Cumulative units completed as of March 2005: 5,605;
Cumulative units ahead as of March 2005: 180.
Source: Compiled by GAO from DOE data.
[A] DOE's lifecycle totals are based on estimates of the total amount
of material required to be cleaned up. In 2003, these estimates were
placed under DOE's configuration control system--that is, the estimates
cannot be changed unless approved by a DOE Environmental Management
review board.
[B] This measure was slightly ahead of schedule and nearly complete.
[C] As of March 2005, DOE had packaged less than 2 percent of the
lifecycle inventory for depleted uranium. A rapid increase in packaging
is planned in 2009.
[D] Contaminated areas include burial grounds, dried ponds, and spills.
[End of table]
These risk reduction measures show that DOE has made progress at an
accelerated pace for a variety of cleanup activities that often require
more readily available technology or standard treatment processes. For
example, facility disposal primarily involves decontaminating and
tearing down a building, and disposing of the rubble at established
disposal sites. In addition, DOE's measures show that it had nearly
completed its activity to package plutonium and uranium residues, a
highly dangerous activity due to the potential for a nuclear accident
or worker exposure.
While DOE has made progress in several areas, a significant part of the
progress was due to accelerated activities at relatively few sites and
reflects completion of only a small percentage of the overall work to
be performed. For example, DOE's Rocky Flats site alone accounted for
more than 180,000 of the total 181,600 cubic meters of low-level and
low-level mixed waste that DOE disposed of ahead of schedule.
Similarly, more than half of the progress made ahead of schedule in
remediating potential contamination areas was due to work performed at
Rocky Flats. And although DOE made progress on many of its risk
reduction measures, some individual sites did not make progress at an
accelerated pace. For example, although DOE was ahead of schedule in
disposing of low-level and low-level mixed waste, both the Oak Ridge
site and the Lawrence Livermore National Laboratory were slightly
behind their site targets on this measure. In addition, DOE's progress
in a few areas reflected achieving only a small portion of the overall
work to be completed. The most extreme example shows that DOE was ahead
in packaging depleted uranium; however, this reflects about 1 percent
of the nearly 700,000 metric tons to be packaged. In tearing down and
disposing of nuclear facilities, DOE had completed about 9 percent of
the 515 facilities it has to clean up.
In addition to areas in which DOE was ahead of schedule, cleanup
progress was on track or nearly on track for four risk reduction
measures in the following cleanup categories: (1) packaging high-level
waste for disposal, (2) cleaning up special nuclear materials, (3)
packaging spent nuclear fuel for disposal, and (4) eliminating
geographic sites (see table 3). These cleanup activities involve
difficult and hazardous work.
Table 3: Cleanup Activities for Which DOE Was Generally on Schedule as
of March 2005:
Risk reduction measure (unit measured): Radioactive tank waste: High-
level waste packaged for disposition (number of containers)[B];
Lifecycle total[A]: 18,735;
Cumulative units planned as of March 2005: 2,118;
Cumulative units completed as of March 2005: 2,116;
Status of cumulative units as of March 2005: -2.
Risk reduction measure (unit measured): Special nuclear materials:
Material access areas[C] eliminated (areas eliminated);
Lifecycle total[A]: 14;
Cumulative units planned as of March 2005: 7;
Cumulative units completed as of March 2005: 8;
Status of cumulative units as of March 2005: 1.
Risk reduction measure (unit measured): Spent nuclear fuel: Spent
nuclear fuel packaged for disposition (metric tons of heavy metal);
Lifecycle total[A]: 2,420;
Cumulative units planned as of March 2005: 2,129;
Cumulative units completed as of March 2005: 2,125;
Status of cumulative units as of March 2005: -4.
Risk reduction measure (unit measured): Site closures: Geographic sites
eliminated (entire site complete);
Lifecycle total[A]: 114;
Cumulative units planned as of March 2005: 76;
Cumulative units completed as of March 2005: 75;
Status of cumulative units as of March 2005: -1[D].
Source: Compiled by GAO from DOE data.
[A] DOE's lifecycle totals are based on estimates of the total amount
of material required to be cleaned up. In 2003, these estimates were
placed under DOE's configuration control system--that is, the estimates
cannot be changed unless approved by a DOE Environmental Management
review board.
[B] Work accomplished under this cleanup activity reflects the
processing, vitrifying, and packaging of high-level waste sludge
primarily at the Savannah River Site.
[C] A material access area is a secure area that offers protection and
control for a variety of special nuclear materials.
[D] DOE was behind in closing the Salmon, Mississippi, site scheduled
for 2003. Completion is expected in fiscal year 2005.
[End of table]
Making progress on cleanup activities is an important step in reducing
environmental risks and annual operating costs, and in demonstrating
results under the accelerated cleanup plan. DOE officials told us that
achieving cleanup results for these waste activities helps reduce
future mortgage costs such as surveillance and maintenance of unneeded
facilities, avoids potentially higher remediation costs in the future,
and demonstrates actual cleanup progress. To achieve such progress in
reaching its risk reduction goals, DOE took a number of steps including
changing the sequence of some cleanup activities to complete tasks
earlier than originally scheduled and reducing work scope where
warranted for other activities. Site officials credited the
achievements to remediating targeted areas such as contaminated burial
grounds, waste sites, facilities, and plutonium production reactors
along the Columbia River at Hanford and a variety of obsolete buildings
at Idaho and Savannah River. According to DOE officials at these sites,
many of these areas were scheduled for decommissioning and disposal in
the future, but because they were no longer needed, they were disposed
of earlier than originally planned. In addition, making progress in
certain areas can free up funding for use on other, more complex
projects. For example, at DOE's Idaho National Laboratory, officials
told us that completing disposal of most of its low-level and low-level
mixed waste 2 years ahead of schedule has allowed them to apply the
funds originally planned for managing this waste to other cleanup
activities at the site.
Problems Have Occurred on Major Activities, Including Disposing of
Transuranic Waste and Radioactive Tank Waste and Shipping Plutonium to
Storage Locations:
In contrast to progress on cleanup activities for which DOE is ahead of
or on schedule, DOE is having difficulty with other cleanup work that
could have a major impact on its accelerated cleanup goals. As of March
2005, DOE was falling behind in three risk reduction measures under two
cleanup categories that account for a significant portion of the
potential cost reductions DOE was expecting--radioactive tank waste and
transuranic waste. See table 4 for a list of cleanup activities for the
two waste types on which DOE has fallen behind since implementing the
accelerated cleanup plan.
Table 4: Cleanup Activities for Which DOE Is Behind the Accelerated
Schedule as of March 2005:
Risk reduction measure (unit measured): Radioactive tank waste: Liquid
waste eliminated (gallons)[B];
Lifecycle total[A]: Radioactive tank waste: 88,000,000;
Cumulative units planned as of March 2005: 2,960,000;
Cumulative units completed as of March 2005: 0;
Cumulative units behind as of March 2005: -2,960,000.
Risk reduction measure (unit measured): Radioactive tank waste: Liquid
waste tanks closed (number of tanks);
Lifecycle total[A]: Radioactive tank waste: 241;
Cumulative units planned as of March 2005: 13;
Cumulative units completed as of March 2005: 2;
Cumulative units behind as of March 2005: -11.
Risk reduction measure (unit measured): Transuranic waste.
Risk reduction measure (unit measured): Transuranic waste disposed
(number of cubic meters);
Lifecycle total[A]: Radioactive tank waste: 141,892;
Cumulative units planned as of March 2005: 30,926;
Cumulative units completed as of March 2005: 24,461;
Cumulative units behind as of March 2005: -6,465.
Source: Compiled by GAO from DOE data.
[A] DOE's lifecycle totals are based on estimates of the total amount
of material required to be cleaned up. In 2003, these estimates were
placed under DOE's configuration control system--that is, the estimates
cannot be changed unless approved by a DOE Environmental Management
review board.
[B] While this cleanup activity is active at DOE's Savannah River Site,
no liquid waste has yet been eliminated, primarily because technology
has not been fully developed and regulatory issues have not been fully
resolved.
[End of table]
DOE efforts to treat and dispose of radioactive waste from its tanks
are primarily at three DOE sites--Hanford, Idaho, and Savannah
River.[Footnote 8] However, because the Hanford and Idaho sites have
not yet begun to treat their liquid radioactive tank waste, the measure
for eliminating liquid waste from underground tanks applies to the
Savannah River Site. Although Savannah River has been processing
radioactive tank waste sludge since 1996, it was behind in processing
and eliminating from its tanks nearly 3 million gallons of liquid
primarily because the site was still developing waste separation
technology and lacked operational treatment facilities for disposing of
liquid tank waste.[Footnote 9] While all three of DOE's sites had
performance goals for closing radioactive waste tanks through March
2005, no tanks have been closed since 1997.[Footnote 10] Plans to close
tanks at the three sites have been delayed because DOE continues to
work with regulators to reach agreement on closure requirements and due
to a legal challenge to DOE's tank closure strategy. DOE's authority to
proceed with its tank closure plans at its Savannah River Site and the
Idaho National Laboratory was resolved by federal legislation enacted
in 2004; however, the law excluded the Hanford Site.[Footnote 11] Even
so, Savannah River and the Idaho National Laboratory are still behind
schedule in preparing waste removal facilities and obtaining regulatory
approval to close the tanks. Although DOE is preparing 12 of its 241
radioactive waste tanks for closure, no tanks have actually been closed
since the accelerated cleanup plan was implemented in 2003.
Transuranic waste is present at several DOE sites, but lagging
performance is due primarily to the Idaho National Laboratory.
Disposing of transuranic waste involves specialized characterization
and treatment, packaging, and shipping in specially designed containers
to a repository in New Mexico. As of March 2005, DOE had fallen behind
its accelerated schedule by about 6,500 cubic meters, achieving about
80 percent of the goal. Delays in Idaho's transuranic waste disposal
were primarily due to contractor performance problems in preparing the
waste for shipment and difficulties in implementing a specially
designed treatment technology.
The activities and projects for which DOE was falling behind the
accelerated schedule involve technically complex and costly cleanup
activities, and usually require specialized treatment technologies.
Radioactive tank waste, for example, involves treating highly
radioactive waste generated from the reprocessing of reactor fuel that
contains a mix of hazardous and radioactive constituents, and requires
relatively complex treatment technologies such as waste separation and
vitrification. Cleaning up radioactive tank waste accounts for about 30
percent--or almost $40 billion--of DOE's estimated total cleanup costs.
To date, key facilities DOE needs to use to treat and dispose of this
waste are still being designed and built, and waste treatment
technologies continue to be developed and tested. Similarly, some of
the greatest risks, cleanup costs, and technical challenges involve the
disposal of transuranic waste. This waste often requires an extensive
retrieval, characterization, and treatment process as well as
repackaging in containers before it can be shipped to and disposed of
in the designated geologic repository for transuranic waste in New
Mexico. Transuranic waste disposal is behind schedule and DOE will have
difficulties catching up if this activity continues to fall behind.
In addition to the cleanup activities that DOE measures, other cleanup
activities not included in DOE's risk reduction measures are
experiencing problems further impacting overall cleanup progress.
Although no comprehensive list of these cleanup activities was
available from DOE, we found several examples, some of which are listed
below, that involve constructing facilities critical to DOE's cleanup
mission and relocating certain wastes or nuclear materials (see table
5).
Table 5: Selected Cleanup Activities Experiencing Problems That Are Not
Included in DOE's Risk Reduction Measures:
Sites: Hanford;
Project or activity: Shipment of plutonium to offsite location;
Problem or uncertainty: Planned shipping of plutonium to designated
site has been deferred while long-term storage issues are resolved;
Potential impact on future progress: Increased costs for extended
onsite storage and security requirements.
Sites: Hanford;
Project or activity: Construction of waste treatment plant;
Problem or uncertainty: Delays primarily due to contractor performance
problems and design changes to comply with seismic requirements;
Potential impact on future progress: Increased construction costs,
extension of facility startup beyond 2011.
Sites: Idaho National Laboratory;
Project or activity: Storage of spent nuclear fuel;
Problem or uncertainty: Construction of storage facility is behind
schedule;
Potential impact on future progress: At least a 3-year schedule delay
in facility construction and operation and potential cost increases.
Delays may be offset by delay in opening the planned disposal
repository.
Sites: Miamisburg;
Project or activity: Cleanup of landfill;
Problem or uncertainty: Disagreement with local community over further
cleanup of landfill;
Potential impact on future progress: Increased cleanup costs.
Sites: West Valley;
Project or activity: Decommissioning of contaminated process facility;
Problem or uncertainty: Dispute over who is responsible;
Potential impact on future progress: Increased costs and extension of
schedule beyond 2012.
Source: Compiled by GAO from DOE data.
[End of table]
These cleanup activities can involve significant technical and
operational problems. Even though DOE does not track the status of
these problems in its risk reduction measures, DOE officials are aware
of these problems and are working to resolve them. However, because
these problems remain unresolved and their potential impact on the
accelerated cleanup plan is uncertain, DOE may already be at risk of
not achieving the kind of progress it predicted under its accelerated
cleanup plan. For example, the Hanford Site must construct key
facilities and test complex technologies before it can treat 55 million
gallons of radioactive tank waste. Recently, work on this project has
been delayed due to engineering and contractor performance problems,
leading DOE to reevaluate its ability to complete the project under
current cost and schedule constraints. DOE expects to revise project
cost and schedule goals in fiscal year 2006. Despite these problems,
DOE does not have a risk reduction measure that shows the progress of
these activities or their potential impact on overall cleanup progress.
Consequently, DOE will not be able to quantify progress in treating
radioactive tank waste at Hanford until facilities are operational--now
planned for 2011, or later. Similarly, DOE's strategy under the
accelerated cleanup plan to consolidate Hanford's plutonium offsite has
been deferred while long-term storage issues are being resolved. DOE
Hanford officials estimate that if the plutonium remains on-site, the
additional costs to continue storing and securing the material may
amount to more than $2 billion. Despite this problem, DOE's plutonium
risk reduction measure, which focuses on completing stabilization and
packaging of the material, shows that this cleanup activity was ahead
of schedule.
When considered together, the results of DOE's risk reduction measures
for two main types of cleanup activities--radioactive tank waste and
transuranic waste, which are behind schedule and require additional
cleanup activities--suggest that DOE may already be at risk of not
achieving its overall risk reduction goals. Each of these problems
represents a significant obstacle to DOE successfully completing
cleanup activities under its accelerated plan. Success hinges on DOE's
ability to continue reducing risks by making cleanup progress and
keeping costs and schedules within the constraints of DOE's plan.
DOE Is Unlikely to Achieve Its Estimated $50 Billion in Cost
Reductions:
DOE's accelerated plan is unlikely to achieve the $50 billion cost
reduction goal for three main reasons. First, DOE's method for
calculating cost reductions has limitations that raise questions about
its reliability. The actual cost reduction from the accelerated cleanup
plan, if implemented as intended, would likely be much lower. Second,
the accelerated plan is based on a number of key assumptions about
improvements to the cleanup approach--such as shortened schedules and
technology improvements--that may not occur as planned. Third, the
three sites that account for most of the cost reduction are already
facing challenges and have either increased their cost estimates or
plan to increase their funding requests, raising doubts about DOE's
ability to achieve its full expected cost reductions. While DOE
believes the accelerated cleanup plan will reduce costs, the actual
amount of those cost reductions is uncertain.
DOE Estimates Overstated Potential Cost Reductions:
DOE calculated its estimated $50 billion in cost reductions by
comparing its fiscal year 2001 cost estimate for the program--the last
cost estimate before DOE implemented its accelerated strategy--with its
fiscal year 2003 cost estimate for the program--the first complete cost
estimate under the new accelerated strategy.[Footnote 12] DOE's 2001
cost estimate for the program was $192 billion, reflecting its prior
approach to cleaning up its radioactive and hazardous wastes by
2070.[Footnote 13] The 2001 estimate represented forecasts generated by
DOE's field staff at each of its sites and for each of its activities.
Aggregating these site-developed estimates, DOE arrived at its 2001
cost estimate for the program. In contrast, to develop its 2003
estimate--reflecting an accelerated approach--DOE provided several of
the sites with target costs that the sites were to work towards
meeting.[Footnote 14] These target costs were based on assumptions from
the headquarters officials about how and when the work should be
completed. Under this new strategy, DOE's 2003 estimate for completing
the cleanup work was $142 billion. DOE subtracted the 2003 estimate for
the new strategy ($142 billion) from the 2001 estimate under the
original strategy ($192 billion) to arrive at its $50 billion cost
reduction estimate.[Footnote 15]
However, DOE's estimated $50 billion in cost reductions from
accelerating cleanup at its sites may not be fully reliable for several
reasons:
* Pre-acceleration baseline cost estimate may be unreliable. In a
February 2002 review of the cleanup program, DOE specifically
acknowledged that its cost estimate of the program did not provide a
reliable estimate of project costs. DOE officials explained that the
site-level estimates of cleanup work were based on calculations that
were highly uncertain beyond the life of the contracts. We and others
have previously raised concerns that DOE's cleanup cost estimates may
not be fully reliable. In our prior work, we noted that in preparing
baseline cost estimates, DOE lacked a standard methodology for sites to
use.[Footnote 16] Further, in the past, DOE's Office of Inspector
General and the National Research Council have raised similar concerns
about DOE's estimates being incomplete and unreliable.[Footnote 17]
* Estimates did not include contingency costs. Because of the high
uncertainty surrounding the cleanup work, DOE computes additional
uncertainty costs--called contingency estimates[Footnote 18]--which are
added to the overall cleanup estimates in its annual financial
statements. These costs are intended to cover any underestimated or
unforeseen cleanup work. In 2001, DOE estimated that because of
uncertainty related to the cleanup, it would add a contingency estimate
equal to an additional 17 percent of its cleanup cost estimate. In
contrast, following implementation of the accelerated plan, DOE
estimated in 2003 that increased uncertainty called for nearly doubling
the contingency estimate to 29 percent of the cleanup cost estimate.
However, when calculating its expected cost reduction under the
accelerated plan, DOE did not include either of these contingency
estimates in its comparison of the two estimates. Doing so would likely
have lowered the estimated cost reductions to below $50 billion.
* No present value analysis was performed. DOE's estimate of potential
cost reductions did not consider the time value of money. As we noted
in our previous report,[Footnote 19] according to standard economic
analysis and guidance developed by OMB,[Footnote 20] cost-comparison
analyses should be based on lifecycle costs of competing alternatives
with future costs discounted to present value; that is, adjusted both
for inflation and the time value of money.[Footnote 21] According to
OMB's cost-estimating guidance, DOE should have first converted the
annual expected costs of cleanup for both its 2001 and its 2003
estimates to their present value in 2003, and then compared the two
present-value costs. While DOE's comparison of its estimates is based
on values that are expressed in constant 2003 dollars (to account for
inflation), DOE did not adjust its figures to account for the time
value of future costs.[Footnote 22] Had DOE compared present value
estimates for 2001 and 2003, the resulting cost reduction would likely
have been much lower. For example, when we adjusted DOE's estimated $20
billion cost reduction for the Hanford waste treatment project to
consider the time value of money, the potential cost reduction
decreased by about 40 percent--to about $12 billion.
Cost Reductions Were Based on Assumed Performance Improvements That May
Not Occur:
As part of its plan to reduce the expected cost of the cleanup and
eliminate risks more quickly, DOE made several assumptions about ways
to improve the cleanup work. These assumptions included (1) developing
new technologies, such as a technology to allow more efficient
vitrification of some wastes; (2) implementing new acquisition
strategies that encourage and reward contractor efficiencies, such as
performance-based contracts; (3) revising site cleanup agreements to
simplify treatment and disposal requirements, such as reclassifying
some wastes allowing for disposal on site rather than remotely; and (4)
completing work sooner than planned thereby eliminating out-year costs.
Assumed improvements in DOE's cleanup approach resulted in DOE's
estimated $50 billion in cost reductions (see figure 1).
Figure 1: Contributions of Key Assumptions to DOE's Estimated $50
Billion in Cost Reductions:
[See PDF for image]
[A] When DOE collected its cost reduction data from each site, some of
the improvements related to finishing cleanup work sooner were also
closely tied to the other assumed improvements resulting in some
overlap among the categories.
[End of figure]
The assumptions enabled DOE to develop revised cleanup cost estimates
at most sites that reflected cost reductions (see figure 2).
Figure 2: DOE's Expected Cost Reduction by Office:
[See PDF for image]
[A] Includes both the Office of River Protection and the Richland
Operations office.
[B] DOE did not estimate large cost reductions from Rocky Flats because
that site had already implemented many of the accelerated strategies
and reduced its cost estimate before 2001.
[C] Includes Headquarters and Program Direction costs.
[D] Because of work transfers within the Office of Environmental
Management, some costs changed in 2003 at sites that closed before
2003.
[End of figure]
Although these assumed improvements may have the potential to reduce
cleanup costs, many of them are still uncertain and may not occur. For
example,
* Technology improvements. DOE assumed that significant cost reductions
would result from improved technologies that would allow treatment and
disposal of waste faster and at lower costs. Nearly all of the
estimated cost reduction pertains to improvements in the technologies
at the Idaho National Laboratory and Hanford sites. For example, DOE
expected a $4.7 billion cost reduction at the Idaho National Laboratory
by using a technology for separating a portion of the tank waste, but
that technology has still not been successfully tested and implemented
on DOE tank waste. Similarly, at the Hanford site, DOE is testing a
technology that officials estimated would speed up the stabilization of
some low-activity wastes reducing costs by an estimated $8.9 billion.
However, the technology has not been fully implemented or tested on
Hanford's unique waste, and costs of operating the new technology are
not yet known, so the extent of cost reductions DOE assumed could be
incorrect. For example, an official for the contractor developing the
pilot plant to test this technology said the project is already
projecting cost increases and is currently estimated to begin operating
about 6 months late.
* Contract reform. DOE estimated that revised contracting strategies
would also result in significant cost reductions. However, at two of
DOE's largest sites--Savannah River and Hanford--DOE will not award
some major new contracts until 2006. Until then, the final price of
DOE's new contracts and any potential cost reductions associated with
them are uncertain. For example, DOE has assumed it will reduce overall
costs by more than 20 percent under its new Savannah River Site
contract. However, the details and final cost of the contract will not
be finalized until the contract is awarded. External auditors
acknowledged this uncertainty at Hanford in their assessment of DOE's
fiscal year 2004 environmental liabilities estimate, noting that it was
"not appropriate" to assume cost reductions from future contracts since
those reductions are "neither probable nor susceptible of reasonable
estimation."
* Revisions to cleanup agreements. DOE estimated additional cost
reductions would result from revising site-specific waste cleanup
agreements with federal and state regulators. However, regulators have
not agreed to or are resisting revisions to agreements that accounted
for most (at least 75 percent) of these expected cost reductions. For
example, DOE expected to be able to determine that some radioactive
tank waste is not high-level waste but transuranic waste, thereby
allowing DOE to ship the treated waste to the Waste Isolation Pilot
Plant for permanent disposal and reducing costs by $1.5 billion.
However, in late 2004, the head of New Mexico's Environment Department-
-the state regulator for the repository--said the state would refuse to
accept DOE's tank waste for disposal at the repository because New
Mexico considers that waste to be high-level, not transuranic, waste.
In addition, because of the uncertainty about the disposal path for
this radioactive tank waste, the state of Idaho--which has a regulatory
agreement with DOE to treat and dispose of the waste out of the state-
-prefers that DOE apply more extensive high-level waste treatment
technologies.
* Work completed sooner. DOE also expected cost reductions resulting
from completing work sooner through improvements that, in many cases,
also depend on the assumptions discussed above. Because of the
uncertainty surrounding assumed improvements in its cleanup operations,
DOE's anticipated cost reductions from completing work sooner are also
in jeopardy. For example, DOE estimated approximately $2.8 billion in
cost reductions at its Savannah River Site from accelerating the
cleanup of radioactive tank waste. However, that reduction depends on
implementing a new waste treatment technology that has not yet been
fully tested outside a laboratory. As a result, the uncertainties
surrounding technological improvements raise doubts about DOE's ability
to accelerate its schedule. In addition, several of the projects that
DOE expects to complete in less time are already experiencing problems.
For example, DOE estimated that an approximately $2.8 billion cost
reduction would result, in part, from revising its schedule for
shipping transuranic waste to the repository in New Mexico. However, as
we noted above, transuranic waste packaging and shipping is already
behind schedule.
Nearly All of the Cost Reductions Were to Occur at Three Sites Where
DOE Is Having Significant Technical, Regulatory, or Management
Challenges:
DOE expected cost reductions to occur at nearly all of its cleanup
sites, but most of the total estimated cost reduction was expected from
3 sites that account for the largest portion of DOE's overall cleanup
costs--Hanford, Savannah River, and Idaho National Laboratory. However,
these sites are already facing challenges to their cleanup efforts
which may jeopardize DOE's ability to achieve its estimated $50 billion
cost reduction. Although it is impossible to precisely predict the
impact that these challenges will have on DOE's overall cleanup costs,
any cost increases at these sites could offset cost reductions at other
sites and lower the potential for overall cost reductions from the
accelerated plan.
The types of challenges that could increase cleanup costs at these
three DOE sites include the following:
* Delays in disposing of highly radioactive wastes. In early 2005, DOE
reported that a slip in the scheduled opening of DOE's planned
repository at Yucca Mountain, Nevada would delay shipment of waste by
at least 2 years--and possibly for as long as 7 years--due to technical
and regulatory issues. As a result, sites now storing high-level waste
and spent nuclear fuel have been reevaluating their waste disposal
plans and associated cost and schedule estimates. The sites potentially
affected include Hanford, Idaho National Laboratory, Savannah River,
and West Valley. Most sites expect costs to increase as disposal
schedules slip. In its fiscal year 2006 budget request, DOE estimated
that a five year delay in opening the Yucca Mountain repository could
increase costs by as much as $720 million at its three largest sites.
This includes building additional storage buildings and added operating
costs.
* Legal obstacles preventing DOE from implementing aspects of its
cleanup approach. DOE faces challenges to its planned treatment
strategy at the Hanford Site that could potentially increase costs. A
2002 lawsuit challenged DOE's plans to separate and determine that a
portion of its waste could be treated and disposed of as other than
high-level waste, and to DOE's plans to close tanks leaving some
radioactive residual in the tanks. In October 2004, a federal appeals
court overturned a district court ruling against DOE and held that it
was premature to rule on the matter until DOE implemented its
strategy.[Footnote 23] Federal legislation passed in October 2004
provided authority for DOE to carry out its acceleration completion
strategy at its Savannah River Site and Idaho National Laboratory.
However, the law excluded the Hanford Site.[Footnote 24] If similar
authority is not provided for the Hanford Site, costs at the site could
increase significantly--up to $67 billion, according to DOE's estimate.
Similarly, uncertainty surrounds Hanford's ability to accept waste from
other DOE sites as the result of two ongoing lawsuits: one involving a
challenge by the state of Washington to DOE's plan to ship low-level,
low-level mixed, and transuranic waste into the state,[Footnote 25] and
one concerning a recent Washington state citizens' initiative that
could prohibit Hanford from accepting additional waste until existing
waste is cleaned up.[Footnote 26] Although DOE believes it will
ultimately prevail in these lawsuits, some cleanup activities at the
other sites may face delays and increased storage costs until the issue
is resolved.
* Other pressures increasing costs at key sites. By the end of fiscal
year 2004, the total cost estimate of the cleanup work at two of DOE's
largest sites had already increased above cost targets established in
2003. At the Savannah River Site and Idaho National Laboratory overall
cleanup estimates in 2004 were over $2.0 billion higher than in 2003.
Similarly, officials at DOE's Hanford Site indicated in recent public
meetings that they are requesting cleanup funding above previously
established funding targets for fiscal year 2007, which, if approved,
will also add to the plan's total cost. According to the site
officials, the additional funds are being requested primarily to
address higher than expected waste management and treatment costs.
Because of the limitations and uncertainties discussed above, DOE's $50
billion cost reduction goal is unlikely to occur. Recognizing that
achieving the full $50 billion in cost reductions may be in jeopardy,
DOE officials recently stopped citing any specific estimate in
connection with the accelerated plan. However, DOE continues to believe
it will achieve some cost reductions with its accelerated strategy.
DOE's Performance Reporting Does Not Clearly Reflect Progress Made
toward Achieving the Overarching Goals of the Accelerated Cleanup Plan:
DOE's performance reporting does not present a clear understanding of
progress toward meeting the $129 billion cost target and 2035
completion date of the accelerated cleanup plan. While DOE performance
measures, as discussed earlier in this report, provide useful
information about the current status of cleanup activities, there are
two main shortcomings in the way DOE uses these measures to report its
progress toward meeting the overarching goals of the accelerated plan.
First, in reporting on its performance, DOE does not clearly relate
cleanup accomplishments with their associated costs. Second, DOE
reports its performance in a way that does not highlight key cleanup
activities or events that have significant implications for achieving
overall cleanup goals. These shortcomings make it difficult for the
Congress and the public to fully understand how likely DOE will be able
to achieve its accelerated cleanup cost target and completion date.
Performance Reporting Practices Make It Difficult to Clearly Understand
the Relationship Between Cleanup Progress and Cost Performance:
We and others have emphasized the importance of ensuring that reporting
on program performance allows a clear understanding of how well a
program is meeting goals; that is, linking performance goals with
program costs. In a February 2005 study, we noted that federal
accountability laws--the Government Performance and Results Act of 1993
(GPRA) and the Chief Financial Officers Act of 1990--emphasize the
importance of linking program performance information with financial
information as a key feature of sound management and an important
element in presenting to the public a useful and informative
perspective on federal spending.[Footnote 27] Additionally, OMB
indicated to federal agencies that annual performance budgets should
clearly link performance goals with costs for achieving those goals,
both long-term and annual performance goals.[Footnote 28]
DOE's performance reporting does not provide for a clear understanding
of how well the cleanup program is performing. In reporting on its
progress, DOE does not establish how accomplishments made in addressing
wastes--which DOE measures through its risk reduction measures--are
associated with the costs incurred--which DOE measures through its cost
performance measures. Rather, DOE reports separately on the waste
treatment and disposal goals it has achieved using one measure and
reports on whether cleanup activities are being performed within cost
parameters using another measure. These separate measures are organized
around different categories and have different units of measure, making
it difficult to link the information the two measures provide (see
table 6).
Table 6: Comparative Features of DOE's Risk Reduction Measures and Cost
Performance Measures:
Comparative features: Organization of measure;
Risk reduction measures: Organized around 16 specific categories or
outcomes;
Cost performance measures: Organized around 7 project categories.
Comparative features: Information included;
Risk reduction measures: May have more than one measure for the same
waste type, for example, radioactive tank waste has 3 risk reduction
outcomes;
Cost performance measures: May include costs associated with more than
one cleanup activity, such as packaging transuranic waste and disposing
of low-level waste.
Comparative features: Time period measured;
Risk reduction measures: Measures progress against the lifecycle plan;
Cost performance measures: Measures against costs in contract period.
Comparative features: Type of measurement;
Risk reduction measures: Scored as a positive or negative variance,
indicating number of units ahead/behind the target;
Cost performance measures: An overall score indexed to 1.0, where
greater than 1 is on or ahead of schedule and below 1 is behind
schedule.
Comparative features: Scope limitations;
Risk reduction measures: Does not cover all activities associated with
a waste group, for example radioactive tank waste measures do not
include shipping activities;
Cost performance measures: Does not cover all costs related to specific
waste activities, for example, does not cover security costs.
Source: GAO analysis.
[End of table]
The difficulty of understanding the relationship between cleanup
accomplishments and cost performance can be illustrated by comparing
the performance information available on transuranic waste. DOE's risk
reduction measure provides useful information about how much
transuranic waste was processed and disposed of, but DOE does not
separately report cost information related to transuranic waste
accomplishments. Instead, DOE includes costs associated with
transuranic waste activities as part of a larger project category
titled "solid waste stabilization and disposition." Therefore, DOE and
others generally do not have a complete picture of performance for this
activity, such as the impact on cost and schedule of falling behind in
processing and disposing of the waste. For example, as of March 2005,
DOE's Idaho National Laboratory was more than one year--or more than
1,000 shipments--behind its planned number of shipments of transuranic
waste to the federal repository. However, DOE reports no corresponding
cost performance measure to indicate the impact of this delay on cost
and schedule (see table 7). During the same time period, Idaho's solid
waste stabilization and disposition cost performance score indicated
the project category was "green," or remaining within cost and schedule
goals. However, because of the delays in transuranic waste shipments,
DOE is significantly behind schedule, has recently ended the contract,
and is now in the process of determining the cost impact of these
delays.
Table 7: Performance Information on Idaho National Laboratory
Transuranic Waste Shipments as of March 2005:
Risk reduction performance: Total units to ship overall; 66,139 cubic
meters;
Cost performance: Total lifecycle cost; Not separately reported.
Risk reduction performance: Planned units shipped to date; 14,581 cubic
meters;
Cost performance: Planned cost to date; Not separately reported.
Risk reduction performance: Actual units shipped to date; 4,160 cubic
meters;
Cost performance: Actual cost to date; Not separately reported.
Risk reduction performance: Variance; -10,421 cubic meters;
Cost performance: Variance; Not separately reported.
Source: DOE.
[End of table]
The importance of directly linking progress on cleanup with cost
performance has been recognized by OMB. In a fiscal year 2005 program
review of DOE, OMB found that DOE's cleanup program had not developed
annual cost and schedule performance measures to monitor progress
towards completing the cleanup mission. OMB officials said that better
linking cleanup progress and cost performance in DOE's performance
reporting would allow for tracking DOE's performance against its long
term goals.
DOE acknowledged that its performance reporting practices currently do
not directly link progress on cleanup with performance against cost and
schedule targets. According to a senior DOE adviser to the Principal
Deputy Assistant Secretary for Environmental Management, the
Department's earned value management system could eventually provide
this linkage, but DOE is still working to fully implement the system
and to ensure that it provides reliable data. He said that DOE's earned
value management system will eventually produce information on the
cost, schedule, and work completed over the lifecycle of all projects
related to its cleanup mission, and may eventually provide an aggregate
earned value score for the entire cleanup program.
While these steps may be useful, for DOE's performance reporting using
earned value to provide for a full understanding of cleanup
performance, DOE will need to also report on the linkage between cost,
schedule, and performance data by (1) generating comparable cost,
schedule, and performance data at an activity level, such as processing
and disposing of transuranic waste and (2) ensuring that the cost data
is reported in relation to lifecycle cost targets, not just for a
specific year or contract period. While DOE is working toward including
lifecycle cost targets and performance in its earned value data, it is
not taking steps to directly link risk reduction measures with cost
performance at the activity level. According to a senior adviser to the
Principal Deputy Assistant Secretary for Environmental Management, the
department has been focused on ensuring that site cost estimates are
reliable and that all mission-related projects are covered under the
earned value system. However, unless this linkage is established, DOE
performance reporting will not provide for a full understanding of
progress being made by individual cleanup activities or whether it is
on track with its overall $129 billion cost target for completing the
cleanup program.
Performance Reporting Does Not Highlight Critical Activities that Are
Best Indicative of Overall Performance:
Performance reporting should provide for a clear understanding by the
Congress and the public of how an agency is progressing in achieving
its program goals. In assessing how various government agencies
reported on their progress, we noted in a 2004 report that agencies
need to consider the needs of the information's user and best tailor
performance information so that a clear picture of the agency's
progress is presented. We found that an agency's performance data can
have real value only if the data are used to highlight actual
performance against an agency's planned goals.[Footnote 29]
DOE publicly reports on its progress toward achieving accelerated
cleanup plan goals through various means, including providing
information to the Congress in annual budget submissions, reporting
progress against selected annual goals in the agency's annual
performance and accountability report, and making information
accessible on the department's Web site. In all three cases, DOE
primarily relies on the risk reduction measures as the indicator of
cleanup progress. For example, in its fiscal year 2006 budget request
to the Congress, DOE provided information on all 16 risk reduction
measures, including the amount of work estimated to be completed
through fiscal year 2006, such as number of buildings torn down, and
the estimated total amount of work to accomplish. In the budget
request, DOE also included a variety of other program information, such
as general cleanup achievements to date, and identified 7 risk
reduction measures it would use to assess progress at the end of the
fiscal year. Similarly, in accordance with federal reporting
requirements, DOE provides performance information each year in its
annual performance and accountability report that accompanies the
department's annual financial statement. In the performance and
accountability report, DOE describes the general goals of the cleanup
program, external factors that could affect DOE's ability to achieve
those goals, and its progress against selected performance goals for
the year. Finally, on its Web site, DOE provides descriptive
information for its 16 risk reduction measures, including how much work
has been accomplished to date for each measure and the estimated total
amount of work to accomplish for each measure.
Although this information is useful, DOE's performance reporting does
not present a complete picture of progress toward accelerated cleanup
plan goals. For example, DOE has, up to now, reported on its progress
as measured against annual goals, rather than its progress in meeting
its overall $129 billion cost target and 2035 completion date. By doing
so, DOE provided a different picture of the department's progress than
if progress was compared with longer term goals. Two examples from the
agency's performance reporting in its 2004 Performance and
Accountability Report illustrate this point. In its 2004 report, DOE
reported it met less than 80 percent of its annual goal of closing 9
liquid waste tanks in fiscal year 2004. In fact, DOE met 0 percent of
its goal, has closed no tanks since 1997, and is currently
significantly behind its estimated lifecycle target for this activity.
To regain its performance schedule, DOE would need to complete the
regulatory process and close 19 waste tanks by the end of fiscal year
2005. However, this is an unlikely achievement given the length of time
of remediation and regulatory work that is required before the tanks
can be closed. In a second example, DOE reported it had met less than
80 percent of its annual planned target for packaging plutonium and
uranium residues because it was 175 kilograms behind its accelerated
schedule. However, calculating DOE's performance for this activity
against the estimated lifecycle target indicates that DOE was actually
33 kilograms ahead of its cumulative goal by the end of 2004. According
to a senior DOE adviser to the Principal Deputy Assistant Secretary in
the Office of Environmental Management, DOE plans to begin reporting
its progress against lifecycle goals in the department's fiscal year
2005 performance and accountability report.
Another area of concern is that DOE's performance reporting does not
highlight performance on critical cleanup activities that could best
provide information about whether the department is on track to meet
its $129 billion cost target. Among DOE's various performance measures,
certain ones are more important for indicating whether DOE is on track
with its overall accelerated cost and schedule goals, and may provide a
different picture of progress than DOE is currently reporting. In the
longer term, to provide an indication of progress toward overall
accelerated goals, projects that account for a large portion of DOE's
spending--and correspondingly contribute the most towards cost
reductions--can serve as key indicators of progress. For example, DOE
expects a significant portion of accelerated plan cost and schedule
reductions to be achieved from two waste types that are the most
difficult to address--radioactive tank waste and transuranic waste.
DOE's radioactive tank waste program alone accounts for nearly 60
percent--almost $30 billion--of DOE's estimated cost reductions under
the accelerated plan. Highlighting performance in these areas would
provide a better indication of how well DOE is progressing toward its
longer term accelerated cleanup goals. As previously discussed, both
radioactive tank waste and transuranic waste are the two areas where
DOE's progress has fallen behind. In three of four risk reduction
measures the department uses to track progress of its radioactive tank
waste and transuranic waste activities, DOE has experienced delays that
could impact cost. Furthermore, work on DOE's $5.7 billion waste
treatment construction project at Hanford--an activity not tracked by a
risk reduction measure--has been delayed, creating potentially
significant cost and schedule increases. While DOE includes radioactive
tank waste and transuranic waste in its performance reporting, the
department does not identify the significance of these cleanup
activities for meeting overall cleanup cost and schedule goals.
In the short term, closure sites and key activities that are
contributing to planned budget declines over the next few years may
provide a good indication of whether DOE is currently on track to meet
its planned accelerated cost target. DOE's accelerated plan calls for a
decrease in annual funding requirements between 2005 and 2008. That is,
DOE's annual funding requirement is planned to drop from about $7.3
billion in fiscal year 2005, to about $4.5 billion by 2008--or a
decline of about $2.8 billion. Almost 90 percent of this decline is
attributable to 10 sites scheduled to be closed in 2006, and progress
on eight key projects. Currently, the indicators for these sites and
projects show that at least half are behind in some or all cleanup
activities. For example, DOE's Miamisburg, Fernald, and Lawrence
Livermore Laboratory sites--all scheduled to complete cleanup by 2006-
-are behind in at least one risk reduction activity. Similarly, DOE's
spent nuclear fuel project at Hanford was in danger of exceeding its
cost target as of April 2005. Providing aggregate information on the
potential cost increases or schedule delays in this group of sites
could help gauge DOE's ability to achieve a funding decline over the
next few years.
It is not clear what impact the challenges DOE faces will have on its
overall ability to achieve near-term or longer-term cost reduction
goals. However, DOE's performance reporting does not highlight this
information nor does DOE report which activities are the most
significant to achieving its overall cost and schedule goals. DOE
officials said that, in their view, the department's current reporting
of its performance in the annual performance and accountability report
and in its budget submission is sufficient to provide an understanding
of progress towards the program's long-term goals. DOE officials also
noted that, internally, senior DOE managers use a variety of
performance measures to monitor more critical elements of the program
that are not included in any public reporting of accelerated cleanup
progress. Nevertheless, because DOE reporting methods do not identify
critical indicators such as progress on key cleanup activities, the
department is not providing the Congress and the public the basis for a
full understanding of its progress toward achieving the goals of the
accelerated cleanup plan.
Conclusions:
DOE expected that its accelerated cleanup plan would allow it to clean
up contaminated sites faster and at significantly lower cost than
previously planned. While DOE has made progress toward its cleanup
goals, important challenges remain and DOE is not likely to achieve its
original goal of $50 billion in estimated cost reductions. While DOE's
performance reporting provides information on some aspects of cleanup
progress, it does not provide for a full understanding of how the many
uncertainties DOE faces could affect achieving cleanup goals and does
not include a meaningful analysis of the significance of the data.
Furthermore, because DOE's reporting methods do not directly correlate
cleanup results with the associated costs and fail to identify critical
indicators, such as progress on key cleanup activities, DOE is not
providing an adequate picture of its overall progress toward staying
within the $129 billion total program cost and 2035 completion date
goals. We believe that improving DOE's performance reporting to address
these limitations would provide more complete information and allow for
a more accurate assessment of DOE's progress toward achieving
accelerated cleanup plan goals.
Recommendations for Executive Action:
To help DOE and the Congress monitor progress toward meeting DOE's
accelerated cleanup plan cost and schedule goals, we recommend that the
Secretary of Energy take the following two actions:
* Improve DOE's performance reporting so that there is a clearer,
discernable relationship at the activity level between cleanup
accomplishments and the costs incurred in doing the work and
* Identify in DOE's performance reporting to the Congress and others
those performance measures that are the most critical to achieving cost
and schedule goals, and summarize the progress on these measures and
the potential impact of any problems that could affect achieving
accelerated cleanup plan goals.
Agency Comments and Our Evaluation:
We provided a draft of this report to DOE for review and comment. In
written comments, DOE's Principal Deputy Assistant Secretary for
Environmental Management agreed with the report's recommendations. The
Principal Deputy Assistant Secretary also provided technical comments
as an enclosure to the letter. We have incorporated these comments as
appropriate. DOE's written comments on our draft report are included in
appendix III.
Regarding the report's two recommendations, DOE agreed to improve its
performance reporting so that there is a clearer, discernable
relationship between cleanup accomplishments and the costs incurred in
doing the work. DOE also agreed to identify and highlight in its
progress reports to the Congress and others those performance measures
that are the most critical to achieving cost and schedule goals, and
summarize the progress on those measures and the potential impact of
any problems that could affect achieving the goals. To aid in
implementing these recommendations, DOE said it will continue to
improve its earned value management system to serve as a link between
performance measures and cost.
In technical comments to us accompanying the letter, DOE disagreed with
our discussion in the report that it should use present value analysis
in calculating the estimated cost reduction it expects to achieve under
its accelerated cleanup plan. DOE stated that we have misinterpreted
OMB Circular A-94, Guidelines and Discount Rates for Benefit-Cost
Analysis of Federal Programs, regarding the use of present value
analysis. DOE said that present value calculations are more applicable
to cost-benefit analyses, particularly when attempting to analyze the
costs and benefits to various options or alternatives. DOE emphasized
that its cost estimating methodology was developed solely for the
purpose of estimating the program's environmental liability, and its
cost reduction estimate is simply the difference between fiscal year
2001 and fiscal year 2003 environmental liability estimates. DOE
believes that since it was not attempting to calculate benefits, a
present value analysis is not appropriate.
In our view, our interpretation of the OMB circular is correct and, in
fact, is supported by DOE's own guidance, which recommends using
present value analysis as a standard methodology for cost comparisons
of different alternatives. OMB Circular A-94 (revised October 29,
1992), standard economic analysis, and DOE's guidance (Report to
Congress, July 2002, Appendix A-Lifecycle Cost Analysis) recommend
present value analysis as the appropriate technique for analysis of
alternative options even if the benefits from different approaches are
the same or a comparison of the benefits is not possible. As we
previously reported, although using current dollar estimates may be
appropriate for budget purposes, present value analysis is the standard
methodology to be used for comparing costs of different alternatives
that occur at different times, such as comparing DOE's accelerated and
baseline cleanup alternatives.
We are sending copies to other interested congressional committees and
to the Secretary of Energy. We will also make copies available to
others upon request. In addition the report will be available at no
charge on the GAO Web site at http://www.gao.gov.
If you or your staff have any questions on this report, please call me
on (202) 512-3841. Contacts points for our Office of Congressional
Relations and Public Affairs may be found on the last page of this
report. Other staff contributing to this report are listed in Appendix
IV.
Signed by:
Gene Aloise:
Director, Natural Resources and Environment:
[End of section]
Appendix I: Scope and Methodology:
To determine what progress DOE has achieved under its accelerated
cleanup plan, we identified the measures DOE uses to monitor and report
its performance. We found that DOE uses two primary measures to monitor
progress: its "Gold Chart" metrics (risk reduction measures) and earned
value metrics. For DOE's risk reduction measures, we discussed with DOE
officials--both at headquarters and at specific sites--how these
measures were developed. We also discussed how these measures are used
by DOE--both internally and for external reporting. We obtained and
analyzed DOE's current risk reduction measures to determine both
current status and implications of out year requirements for the
overall cleanup. In reviewing DOE's efforts to develop earned value
data, we reviewed various reports on DOE's earned value system,
including a recent GAO report discussing the data and a 2004 National
Academy of Sciences report.[Footnote 30] We reported in March 2005,
that for several major projects, earned value management principles had
not been properly implemented at the department to measure cost and
schedule performance. In addition, the National Research Council
reported in 2004 that the quality of earned value management in the
department was inconsistent and may not be completely accurate. We also
discussed DOE's earned value measures with DOE officials in its
Environmental Management, Office of Performance Assessment and with DOE
officials in the Office of Engineering and Construction Management. In
part due to the concerns raised by GAO and others about the reliability
of information from DOE's earned value system and in part because DOE
had not completed addressing these concerns by more fully implementing
its earned value management system, we did not report on earned value
data as a measure of DOE's progress in achieving its accelerated goals.
To determine how DOE implemented its accelerated strategy, we reviewed
several documents at DOE headquarters providing the status of 10
restructuring initiatives implemented when the accelerated initiative
was started. We reviewed DOE policy and procedure documents, and
discussed DOE's strategy to implement its accelerated plan with DOE
headquarters officials in its Office of Environmental Management. We
further reviewed site performance management plans--a document laying
out each site's strategy for implementing the accelerated initiative.
To understand how the accelerated cleanup plan was being implemented at
the site level and progress made, we selected a nonprobability sample
of 5 sites to review, based on several criteria.[Footnote 31] We
started with a list given to us by DOE that contained all DOE cleanup
sites, each site's expected completion date, each site's 2003 estimated
lifecycle target, and each site's contribution to cost reductions under
the accelerated initiative. We eliminated from consideration any site
that (1) had completed cleanup by 2004; (2) had a 2003 estimated
lifecycle target less than $1 billion, and (3) contributed less than
$100,000 in cost reductions to DOE's overall $50 billion estimated cost
reductions from implementing its accelerated initiative. This gave us a
list of sites, which we placed into three categories, based on DOE's
budget accounts: (1) sites expected to close by 2006, (2) sites
expected to close by 2012, and (3) sites expected to close by 2035. We
selected a minimum of one site from each category. In making our
selection, we considered the following factors: geographic dispersion
of the sites, the site's estimated contribution to DOE's annual budget,
the diversity of waste types represented at the site, and contribution
to DOE's estimated $50 billion cost reduction from acceleration.
Applying these criteria, we selected the following five sites: Hanford
Site--both DOE's Office of River Protection and Richland Operations
Office; Savannah River Site; Idaho National Laboratory; the West Valley
Demonstration Project, and DOE's Miamisburg Closure Project. For each
site we selected, we reviewed and obtained information regarding cost,
schedule, and performance under DOE's risk reduction measures. We
independently verified, to the extent possible, the dollar figures and
waste cleanup performance data provided to us by DOE, by taking various
steps. For example, we analyzed budget formulation documents,
documented waste cleanup assumptions, and obtained information on cost
validation procedures. We determined that these data were sufficiently
reliable for purposes of this report. In addition, at each site, we
discussed with site officials implementation of the accelerated cleanup
plan, progress toward meeting cost and performance goals, and any
obstacles to meeting those goals.
To develop information on the key assumptions underlying the Department
of Energy's accelerated cleanup plan, we analyzed information and
documents provided by DOE officials and contractors at DOE headquarters
and various sites. For many of the sites, we reviewed the performance
management plans to assess how their approach to site cleanup would
change under the accelerated plan. To determine how those assumptions
affected achieving the accelerated cleanup goals, we evaluated site
estimates of how the proposed changes under acceleration would impact
site cleanup activities. Analyzing the reports provided by DOE, we
determined the key contributors to the planned cost reductions. We then
assessed through review of various reports and interviews with
responsible officials the status of the key initiatives. We also
discussed the progress of the plan with state regulators and
Environmental Protection Agency officials, DOE headquarters officials,
including the acting Assistant Secretary for Environmental Management,
and officials from other headquarters offices.
In order to assess the reliability of the gold chart metrics and the
cost and schedule data provided to us by DOE, we took several steps.
First, we obtained and reviewed selected site baselines. These included
reviews by DOE's Office of Engineering and Construction Management, as
well as DOE's Office of Environmental Management. We also obtained and
examined the review of DOE's fiscal year 2004 environmental liability
estimate by DOE's independent auditor, KPMG. KPMG audits DOE's
environmental liability estimate as part of its annual audit of DOE's
financial statements. In addition to these steps, for the sites we
visited, we obtained information on data reliability procedures from
site and contractor officials to determine internal controls used to
ensure accurate, complete, and timely data. Finally, we developed and
administered a data reliability form to each site we reviewed,
obtaining information including what types of tests are administered in
database systems to ensure the accuracy and completeness of data
entered into the system, if and how frequently data are reviewed by
independent parties, and how DOE ensures risk reduction measures are
independently verified. The forms were completed by DOE and contractor
officials. We asked follow-up questions whenever necessary. Based on
the information we obtained and our analysis of the information
provided, we determined that the reliability of the data provided was
adequate for the purposes of this report. As we noted throughout the
report, we found methodological problems with DOE's reporting of cost
data and estimation of cost reductions. In reporting its cost data, DOE
incorrectly added cost numbers in actual (current) dollars for years
prior to 2001 to cost numbers in constant 2003 dollars for years post-
2001. DOE also incorrectly estimated cost reductions of $50 billion
without adjusting for the time value of money. Since in our previous
work we demonstrated the effect of these problems by correcting and re-
estimating DOE's cost reductions, we did not do so again in this
report.[Footnote 32] Therefore, we used DOE's estimates throughout as
reported by DOE with no further correction. We conducted our review
from June 2004 through July 2005 in accordance with generally accepted
government auditing standards.
[End of section]
Appendix II: DOE's Estimated Cost Reductions under the Accelerated
Cleanup Plan:
Table 8: Accelerated Cleanup Estimates:
Dollars in thousands (2003 constant).
Office: Albuquerque:
Site/Program: Kansas City Plant;
Closure date change from FY01: -1 year;
Cost change from FY01(includes long-term stewardship)[A]: $1,440;
FY03 Lifecycle Cost (does not include long- term stewardship)[B]:
$28,199.
Site/Program: Los Alamos Laboratory;
Closure date change from FY01: 0;
Cost change from FY01(includes long-term stewardship)[A]: - $726,528;
FY03 Lifecycle Cost (does not include long-term stewardship)[B]:
$1,436,564.
Site/Program: Operations;
Closure date change from FY01: -;
Cost change from FY01(includes long-term stewardship)[A]: $256,797;
FY03 Lifecycle Cost (does not include long-term stewardship)[B]:
$437,280.
Site/Program: Pantex;
Closure date change from FY01: -9;
Cost change from FY01(includes long-term stewardship)[A]: $23,220;
FY03 Lifecycle Cost (does not include long-term stewardship)[B]:
$186,539.
Site/Program: Sandia National Laboratory;
Closure date change from FY01: -3;
Cost change from FY01(includes long-term stewardship)[A]: - $39,887;
FY03 Lifecycle Cost (does not include long-term stewardship)[B]:
$228,846.
Office: Carlsbad:
Site/Program: Waste Isolation Pilot Plant;
Closure date change from FY01: -4;
Cost change from FY01(includes long-term stewardship)[A]: -$3,697,077;
FY03 Lifecycle Cost (does not include long-term stewardship)[B]:
$4,967,519.
Office: Chicago:
Site/Program: Argonne National Laboratory;
Closure date change from FY01: 6;
Cost change from FY01(includes long-term stewardship)[A]:
-$28,120;
FY03 Lifecycle Cost (does not include long-term stewardship)[B]:
$62,239.
Site/Program: Brookhaven National Laboratory;
Closure date change from FY01: 3;
Cost change from FY01(includes long-term stewardship)[A]: $83,469;
FY03 Lifecycle Cost (does not include long- term stewardship)[B]:
$362,166.
Site/Program: Operations;
Closure date change from FY01: -;
Cost change from FY01(includes long-term stewardship)[A]: $36,833;
FY03 Lifecycle Cost (does not include long-term stewardship)[B]:
$97,649.
Office: Idaho[C]:
Site/Program: Idaho National Laboratory;
Closure date change from FY01: -35;
Cost change from FY01(includes long-term stewardship)[A]: -$10,936,713;
FY03 Lifecycle Cost (does not include long-term stewardship)[B]:
$11,599,306.
Office: Nevada[C]:
Site/Program: Nevada Test Site;
Closure date change from FY01: -2;
Cost change from FY01(includes long-term stewardship)[A]: - $54,657;
FY03 Lifecycle Cost (does not include long-term stewardship)[B]:
$1,940,373.
Office: Oak Ridge:
Site/Program: Oak Ridge Reservation;
Closure date change from FY01: 2;
Cost change from FY01(includes long-term stewardship)[A]:
-$1,503,154;
FY03 Lifecycle Cost (does not include long-term stewardship)[B]:
$6,883,568.
Office: Oakland:
Site/Program: Energy Technology Engineering Center;
Closure date change from FY01: 0;
Cost change from FY01(includes long-term stewardship)[A]: -$2,044;
FY03 Lifecycle Cost (does not include long- term stewardship)[B]:
$198,982.
Site/Program: Lawrence Berkeley National Laboratory;
Closure date change from FY01: 2;
Cost change from FY01(includes long-term stewardship)[A]: -$24,611;
FY03 Lifecycle Cost (does not include long-term stewardship)[B]:
$33,165.
Site/Program: Laboratory Energy-related Health Research;
Closure date change from FY01: -1;
Cost change from FY01(includes long-term stewardship)[A]: -$846;
FY03 Lifecycle Cost (does not include long- term stewardship)[B]:
$40,464.
Site/Program: Lawrence Livermore National Laboratory;
Closure date change from FY01: -1;
Cost change from FY01(includes long-term stewardship)[A]: $30,473;
FY03 Lifecycle Cost (does not include long- term stewardship)[B]:
$504,405.
Site/Program: Operations;
Closure date change from FY01: -;
Cost change from FY01(includes long-term stewardship)[A]: -$2,066;
FY03 Lifecycle Cost (does not include long-term stewardship)[B]:
$49,461.
Site/Program: Stanford Linear Accelerator Center;
Closure date change from FY01: 2;
Cost change from FY01(includes long-term stewardship)[A]: $7,477;
FY03 Lifecycle Cost (does not include long- term stewardship)[B]:
$20,139.
Site/Program: Separations Process Research Unit;
Closure date change from FY01: 0;
Cost change from FY01(includes long-term stewardship)[A]:
-$5,085;
FY03 Lifecycle Cost (does not include long-term stewardship)[B]:
$207,881.
Office: Ohio:
Site/Program: Ashtabula Environmental Management Project;
Closure date change from FY01: 0;
Cost change from FY01(includes long- term stewardship)[A]: -$44,921;
FY03 Lifecycle Cost (does not include long-term stewardship)[B]:
$154,977.
Site/Program: Columbus Environmental Management Project;
Closure date change from FY01: 0;
Cost change from FY01(includes long-term stewardship)[A]: -$2,504;
FY03 Lifecycle Cost (does not include long- term stewardship)[B]:
$161,095.
Site/Program: Fernald Environmental Management Project;
Closure date change from FY01: -4;
Cost change from FY01(includes long-term stewardship)[A]: -$55,294;
FY03 Lifecycle Cost (does not include long-term stewardship)[B]:
$3,329,720.
Site/Program: Miamisburg Environmental Management Project;
Closure date change from FY01: 0;
Cost change from FY01(includes long-term stewardship)[A]: -$128,648;
FY03 Lifecycle Cost (does not include long-term stewardship)[B]:
$1,304,317.
Site/Program: Operations;
Closure date change from FY01: -;
Cost change from FY01(includes long-term stewardship)[A]: $453,820;
FY03 Lifecycle Cost (does not include long-term stewardship)[B]:
$453,820.
Site/Program: West Valley Demonstration Project;
Closure date change from FY01: -29;
Cost change from FY01(includes long-term stewardship)[A]: -$326,532;
FY03 Lifecycle Cost (does not include long- term stewardship)[B]:
$1,109,463.
Office: Paducah:
Site/Program: Paducah Gaseous Diffusion Plant;
Closure date change from FY01: 20;
Cost change from FY01(includes long-term stewardship)[A]: $3,827,024;
FY03 Lifecycle Cost (does not include long-term stewardship)[B]:
$3,476,147.
Office: Portsmouth:
Site/Program: Portsmouth Gaseous Diffusion Plant;
Closure date change from FY01: 6;
Cost change from FY01(includes long-term stewardship)[A]: $7,539,895;
FY03 Lifecycle Cost (does not include long-term stewardship)[B]:
$4,469,936.
Office: Richland:
Site/Program: Hanford Site;
Closure date change from FY01: - 15;
Cost change from FY01(includes long-term stewardship)[A]: - $5,695,324;
FY03 Lifecycle Cost (does not include long-term stewardship)[B]:
$20,380,244.
Office: River Protection:
Site/Program: Office of River Protection;
Closure date change from FY01: -18;
Cost change from FY01(includes long-term stewardship)[A]: -$16,710,839;
FY03 Lifecycle Cost (does not include long-term stewardship)[B]:
$24,309,630.
Office: Rocky Flats:
Site/Program: Rocky Flats Environmental Technology Site;
Closure date change from FY01: 0;
Cost change from FY01(includes long- term stewardship)[A]: -$223,022;
FY03 Lifecycle Cost (does not include long-term stewardship)[B]:
$6,949,013.
Office: Savannah River:
Site/Program: Savannah River Site;
Closure date change from FY01: -13;
Cost change from FY01(includes long-term stewardship)[A]: -$14,089,347;
FY03 Lifecycle Cost (does not include long-term stewardship)[B]:
$23,725,375.
Other:
Cost change from FY01(includes long-term stewardship)[A]: [Empty];
FY03 Lifecycle Cost (does not include long-term stewardship)[B]:
[Empty].
Sites closed before 2003[D]:
Cost change from FY01(includes long-term stewardship)[A]: -$701,188;
FY03 Lifecycle Cost (does not include long- term stewardship)[B]:
$203,757.
Environmental Management-wide costs[E]:
Cost change from FY01(includes long- term stewardship)[A]: -$6,545,128;
FY03 Lifecycle Cost (does not include long-term stewardship)[B]:
$9,655,527.
Costs transferred out in 2003:
Cost change from FY01(includes long-term stewardship)[A]: -$723,818;
FY03 Lifecycle Cost (does not include long- term stewardship)[B]: $0.
Total:
Cost change from FY01(includes long-term stewardship)[A]: -
$50,006,905;
FY03 Lifecycle Cost (does not include long-term stewardship)[B]:
$128,967,766.
Source: DOE.
[A] Because of the difficulty in separating long-term stewardship and
cleanup activities from the pre-accelerated cost estimates, DOE
included both when calculating the cost change under the new plan.
[B] The FY03 lifecycle cost estimate includes cleanup costs only since
most long-term stewardship costs were transferred to other offices
under the accelerated plan.
[C] Includes operations office costs.
[D] Because of work transfers within Environmental Management, some
costs changed in 2003 at sites that closed before 2003.
[E] Includes Headquarters and Program Direction costs.
[End of table]
[End of section]
Appendix III: Comments from the Department of Energy:
Department of Energy:
Washington, DC 20585:
July 18, 2005:
Mr. Gene Aloise:
Director:
Natural Resources and Environment:
U.S. Government Accountability Office:
Washington, D.C. 20548:
Dear Mr. Aloise:
Thank you for your June 30, 2005, letter to the Secretary of Energy
providing the draft report, Better Performance Reporting Needed to
Assess DOE's Ability to Achieve the Goals of the Accelerated Cleanup
Program, and requesting written comments from the Department of Energy
(DOE). Your draft report contains two recommendations that DOE: (1)
improve the linkage between performance measures so that there is a
clearer, discernable relationship between how much cleanup has been
accomplished and costs incurred in doing the work, and (2) identify and
highlight in its progress reports to Congress and others those
performance measures that are the most critical to assessing overall
progress toward meeting accelerated cleanup plan goals.
The Department agrees with the overall conclusion and accepts the
recommendations. We provided comments to your staff on the draft
Statement of Findings and appreciate the fact that many of our comments
were incorporated into the draft report. However, we believe the draft
still contains some inaccuracies and statements that could be
misinterpreted. Enclosed are detailed comments that we respectfully
request be considered as you finalize your report.
As discussed in the report, the Office of Environmental Management's
(EM) earned value management system (EVMS) is an important tool in
measuring and monitoring scope, schedule, and cost. To aid in
implementing the Government Accountability Office's (GAO)
recommendations and to address the observations in the report, EM will
continue to improve its implementation of EVMS to serve as a link
between performance measures (risk reduction scope and schedule) and
cost. In addition, EM will be emphasizing project risk management as a
method to better manage the uncertainties associated with achieving
mission goals.
If you have any further questions, please contact me at (202) 586-7709
or Mr. Mark W. Frei, Deputy Assistant Secretary for Business Operations
at (202) 586-8754.
Signed by:
Charles E. Anderson:
Principal Deputy Assistant Secretary for Environmental Management:
Enclosure:
[End of section]
Appendix IV: GAO Contact and Staff Acknowledgments:
GAO Contact:
Gene Aloise (202) 512-3841:
Staff Acknowledgments:
In addition to the individual named above, Chris Abraham, John
Delicath, Doreen Eng, Doreen Feldman, Nancy Kintner-Meyer, Jeffrey
Larson, Gregory Marchand, Mehrzad Nadji, Judy Pagano, Thomas Perry, and
Bill Swick made key contributions to this report.
FOOTNOTES
[1] Radioactive waste includes liquid, sludge, and solid waste.
Radioactive tank waste--which DOE manages as high-level waste--is
largely liquid waste and sludge resulting from the reprocessing of
spent nuclear fuel and containing highly radioactive fission products,
long-lived isotopes, hazardous chemicals, and heavy metals. DOE intends
to dispose of the high-level constituents of this waste in a geologic
repository now under development at Yucca Mountain in Nevada. DOE
intends to dispose of the remaining waste constituents at its sites.
Transuranic waste includes equipment, tools, and clothing contaminated
with plutonium or other elements with atomic numbers higher than
uranium. DOE disposes of its transuranic waste in a geologic repository
in New Mexico.
[2] DOE reports cost estimates that add actual (current) dollars for
pre-2001 values, and constant 2003 dollars for values reported past
2001, which DOE calls "2003 constant dollars." Unless otherwise noted,
the numbers are reported in DOE's 2003 constant dollars and without any
adjustments.
[3] U.S. Department of Energy, A Review of the Environmental Management
Program (Washington, D.C.: Feb. 4, 2002).
[4] According to DOE, the department's adjusted cost estimates of both
cleanup and long-term stewardship work in 2001 and 2003, were $192
billion (before accelerated strategy) and $142 billion (under its
accelerated strategy), in DOE's "2003 constant dollars," respectively,
and resulted in the $50 billion cost reduction. Although DOE's $50
billion estimate was not adjusted for the time value of money, it is
the cost reduction estimate that DOE has cited publicly, such as in a
November 2002 public meeting of the Environmental Management Advisory
Board in Washington, D.C., and a March 2003 congressional testimony
before the House Appropriations Committee, Subcommittee on Energy and
Water Development, so it is used throughout this report. When it
implemented its accelerated strategy, DOE was managing to a $129
billion lifecycle cost, which is the 2003 estimate of $142 billion
without long-term stewardship costs.
[5] DOE's risk reduction measures address the following 16 cleanup
activities: packaging plutonium, packaging enriched uranium, packaging
plutonium and uranium residues, packaging depleted uranium, packaging
high-level solid wastes, packaging spent nuclear fuels, eliminating
liquid tank wastes, closing waste tanks, disposing of transuranic
wastes, disposing of low-level and low-level mixed wastes, remediating
release sites, eliminating material access areas, removing nuclear
facilities, removing radioactive facilities, removing industrial
facilities, and closing geographic sites.
[6] As previously noted, DOE also uses an earned value management
system to monitor large projects' progress toward cost and schedule
goals. An earned value system, when fully implemented, is intended to
provide managers the ability to examine cost, schedule and performance
accomplishments on a project. We do not discuss DOE's earned value as a
measure of progress in this report for two reasons. First, DOE has not
fully implemented its earned value management system to measure all of
its mission-related projects against a lifecycle cost estimate. In
response to OMB recommendations noted above, DOE is currently working
toward this goal. Second, we and others have raised concerns about the
reliability of DOE's earned value data. For example, the National
Research Council reported in 2004 that the Department's earned value
management information may not be completely accurate. See National
Academy of Sciences, Progress in Improving Project Management at the
Department of Energy: 2003 Assessment (2004) (Washington, D.C.: 2004).
In addition, we reported in March 2005 that for several major projects,
earned value management principles had not been properly implemented to
measure cost and schedule performance. See U.S. Government
Accountability Office, Department of Energy: Further Actions Are Needed
to Strengthen Contract Management for Major Projects, GA0-05-123
(Washington, D.C.: Mar. 18, 2005).
[7] For purposes of this report, we grouped DOE's 16 risk reduction
measures into eight broad categories.
[8] DOE's West Valley site completed treatment of its high-level tank
waste in 2002.
[9] As part of its radioactive tank waste treatment and disposal
strategy, DOE plans to eliminate a large volume of low-activity waste
in the tanks in its Salt Stone Facility where the waste is permanently
immobilized on site using a concrete material called grout. However,
efforts to operate this facility have been delayed.
[10] The Savannah River Site closed two tanks in 1997. DOE planned to
close 11 additional tanks through March 2005. However, this has been
delayed due to legal and regulatory issues, discussed in this
paragraph.
[11] Pub. L. No. 108-375, § 3116 authorizes DOE to pursue activities
that would allow tank closure at its Savannah River Site and the Idaho
National Laboratory, subject to certain criteria, existing cleanup
orders and agreements, and monitoring by the Nuclear Regulatory
Commission. Section 3116 states that the authority does not apply to
sites in the state of Washington, where the Hanford Site is located.
[12] DOE began implementing the accelerated plan in 2002, but the
accelerated cost estimates were not in place until fiscal year 2003.
[13] In 2001, when the estimate was developed, the scope of work
included both waste cleanup activities and postcleanup stewardship
activities at the sites once the cleanup work is complete.
[14] According to DOE officials, sites were allowed to request a higher
target cost estimate, but had to have this approved by the Assistant
Secretary. Four sites did make this request for their 2003 cost
estimate.
[15] To make these figures comparable, DOE made some adjustments. For
example, DOE subtracted approximately $10 billion from its 2001 cleanup
estimate of $202 billion to account for work that was included in its
pre-accelerated scope but had not yet been included in 2003, and added
approximately $13 billion of long-term stewardship work to its 2003
cleanup estimate of $129 billion. DOE currently manages to the $129
billion cost estimate. For comparison purposes, the adjusted estimates
of both cleanup and long-term stewardship work in 2001 and 2003 were
$192 billion and $142 billion, in DOE's stated "2003 constant dollars,"
respectively. See also footnote 2.
[16] U.S. General Accounting Office, Nuclear Waste: Challenges to
Achieving Potential Savings in DOE's High-Level Waste Cleanup Program,
GAO-03-593 (Washington, D.C.: June 17, 2003).
[17] U.S. Department of Energy Office of Inspector General, Audit of
the U.S. Department of Energy's Consolidated Financial Statements for
Fiscal Year 1998, IG-FS-99-01 (Germantown, Md: Feb. 25, 1999). See also
National Research Council, Improving Project Management in the
Department of Energy (Washington, D.C.: June 1999).
[18] As defined in DOE's fiscal year 2004 financial statements,
contingency estimates are intended to account for the uncertainties
associated with the technical cleanup scope of the program.
[19] U.S. General Accounting Office, Nuclear Waste: Absence of Key
Management Reforms on Hanford's Cleanup Project Adds to Challenges of
Achieving Cost and Schedule Goals, GAO-04-611 (Washington, D.C.: June
9, 2004).
[20] OMB Circular No. A-94, Guidelines and Discount Rates for Benefit-
Cost Analysis of Federal Programs (Washington, D.C.: Oct. 29, 1992).
[21] DOE's own guidance requires a present value analysis to discount
future dollars to reflect the time value of money. Present value
analysis is a method used to evaluate alternative expenditures that
occur at different times and put them on a common basis for comparison.
It goes beyond adjusting the values for inflation, which is a
correction for changes in the purchasing power of the dollar.
Therefore, conducting a present value analysis goes beyond computing
cost estimates in constant year dollars.
[22] In addition, DOE's cost estimate includes actual (current) dollars
for pre-2001 values, rather than calculating these in constant 2003. As
a result, DOE's 2001 and 2003 baselines do not fully reflect constant
2003 dollars.
[23] Natural Resources Defense Council v. Abraham, 388 F.3d 701 (9th
Cir. 2004).
[24] Pub. L. No. 108-375, § 3116 (2004).
[25] State of Washington v. Bodman, No. CV-03-5018-AAM (E.D. Wash.)
[26] Washington state voters passed Initiative 297, the Cleanup
Priority Act, now codified in chapter 70.105E of the Revised Code of
Washington (RCW), in November 2004. Its scope and constitutionality are
currently being litigated in the federal district court and in the
Supreme Court of Washington. United States v. Hoffman, No. CV-04-5128-
AAM (E.D. Wash., filed Dec. 1, 2004), certified to Washington state to
address interpretation of state law, United States v. Hoffman, No.
76629-1 (Wash. Feb 8, 2005).
[27] U.S. Government Accountability Office, Performance Budgeting:
Efforts to Restructure Budgets to Better Align Resources with
Performance, GAO-05-117SP (Washington, D.C.: Feb. 2005).
[28] Executive Office of the President, Office of Management and
Budget, OMB Circular No. A-11 (2004), Part 6, Section 220-1--Preparing
and Submitting Performance Budgets (Washington, D.C.: July 2004).
[29] U.S. Government Accountability Office, Results-Oriented
Government: GPRA Has Established a Solid Foundation for Achieving
Greater Results, GAO-04-38 (Washington, D.C.: Mar. 10, 2004).
[30] U.S. Government Accountability Office, Department of Energy:
Further Actions Are Needed to Strengthen Contract Management for Major
Projects, GAO-05-123 (Washington, D.C.: Mar. 18, 2005), and National
Academy of Sciences, Progress in Improving Project Management at the
Department of Energy: 2003 Assessment (2004) (Washington, D.C.: 2004).
[31] Results from nonprobability samples cannot be used to make
inferences about a population, because in a nonprobability sample some
elements of the population being studied have no chance or an unknown
chance of being selected as part of the sample.
[32] U.S. General Accounting Office, Nuclear Waste: Absence of Key
Management Reforms on Hanford's Cleanup Project Adds to Challenges of
Achieving Cost and Schedule Goals, GAO-04-611 (Washington, D.C.: June
9, 2004).
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