Testimony

Before the Subcommittee on Oversight and

Investigations, Committee on Energy and Commerce,

House of Representatives

United States General Accounting Office

GAO

For Release on Delivery

Expected at 9:30 a.m., EDT

Friday, July 19, 2002 WASTE CLEANUP

Implications of

Compliance Agreements

on DOE's Cleanup

Program

Statement of (Ms.) Gary L. Jones,

Director, Natural Resources and Environment

GAO-02-852T
Page 1 GAO-02-852T Waste Cleanup

Mr. Chairman:

We are here today to discuss compliance agreements that affect the

Department of Energy’s (DOE) cleanup program. Compliance agreements

are legally enforceable documents between DOE and its regulators,

specifying cleanup activities and milestones that DOE has agreed to

achieve.1

 DOE’s Office of Environmental Management (EM) is responsible

for much of the actual cleanup activity, which is carried out primarily

under two federal laws—the Comprehensive Environmental Response,

Compensation, and Liability Act of 1980, as amended (CERCLA), and the

Resource Conservation and Recovery Act of 1976, as amended (RCRA).

Besides DOE, other parties to the agreements include the Environmental

Protection Agency (EPA) and state agencies that have jurisdiction over

environmental and health issues. Over the years, these compliance

agreements have been used to implement much of the cleanup activity at

DOE sites. In February 2002, the Secretary of Energy proposed a new

initiative to refocus DOE’s cleanup program by accelerating risk reduction

at the sites. Questions have been raised about the relationship of this

initiative to the schedules outlined in compliance agreements.

My testimony is based on our report to you on the status and implications

of DOE’s compliance agreements, which you are releasing today.2

 My

testimony addresses five topics: (1) the types of compliance agreements,

(2) DOE’s progress in achieving the milestones contained in the

agreements, (3) whether the cost to comply with the agreements is

reflected in DOE’s annual budget request, (4) whether the agreements

allow DOE to prioritize work across sites according to relative risk, and

(5) possible implications the agreements have on DOE’s efforts to improve

the cleanup program.

 1

 The term “compliance agreement” includes, but is not limited to, Federal Facility

Agreements, Interagency Agreements, settlement agreements, consent orders, and

compliance orders. It does not include federal and state environmental requirements that

are not implemented by compliance agreements. Also, some cleanup work is required in

certain of DOE’s RCRA permits that authorize waste treatment operations. We did not

include RCRA permits in our study because (1) the great majority of DOE’s cleanup work is

covered by compliance agreements and (2) cleanup work required by RCRA permits is

generally also included under the compliance agreements at those sites. Also in this

testimony, we use the term “regulators” to mean those federal and state agencies that are

parties to DOE’s compliance agreements.

2

 U.S. General Accounting Office, Waste Cleanup: Status and Implications of DOE’s

Compliance Agreements, GAO-02-567 (Washington, D.C.: May 30, 2002).
Page 2 GAO-02-852T Waste Cleanup

The 70 compliance agreements at DOE sites vary greatly but can be

divided into three main types. These are: (1) agreements specifically

required by CERCLA to address cleanup of federal sites on EPA’s national

priorities list of the nation’s worst hazardous waste sites or by RCRA to

address the management of mixed radioactive and hazardous waste at

DOE facilities, (2) court-ordered agreements resulting from lawsuits

initiated primarily by states, and (3) other agreements, including state

administrative orders enforcing state hazardous waste management laws.

Collectively, as of December 2001, the 70 agreements had 7,186 schedule

milestones.3

DOE reported completing about 80 percent of these milestones by the time

originally scheduled in the agreements. Many of the milestones completed

either have been administrative, such as issuing a report, or have involved

completing some step in the cleanup process, such as conducting certain

tests. Although such process steps may be important in arriving at

eventual cleanup, for several reasons the number of milestones completed

is not a good measure of cleanup progress. For example, many of the

milestones require completing an administrative requirement that may not

indicate what, if any, actual cleanup work was performed. When DOE

misses a milestone, regulators have several options, including negotiating

a new date or assessing a penalty. Thus far, regulators have generally been

willing to negotiate extensions when DOE found itself unable to complete

a milestone on time, approving about 93 percent of DOE’s requests for

milestone changes. However, DOE has paid about $1.8 million in monetary

penalties and about $4 million in other penalties (such as added work

requirements) because regulators took enforcement actions for missed

milestones.

The cost of complying with these agreements is not specifically identified

in the DOE budget submitted to the Congress. Individual DOE sites

develop annual compliance cost estimates as part of their budget requests.

However, DOE headquarters officials adjust those individual site estimates

to reflect national priorities and to reconcile various competing demands.

Consequently, the final budget request does not identify what portion of

the request is intended to address compliance requirements. DOE is not

 3

 Five of the agreements containing 130 milestones were completed and are no longer

active. For the remaining agreements, the number of milestones will increase over time

because some of the agreements provide for setting milestone dates periodically over the

life of the agreements rather than trying to establish all of the milestone dates at the

beginning of the agreements.

Summary
Page 3 GAO-02-852T Waste Cleanup

required to provide this information to the Congress. Even if it were

possible to trace this relationship in the final budget, the figure would have

limited significance because sites’ compliance estimates are based

primarily on the expected size of the site budget. If the funding sites

receive is insufficient to accomplish all of the compliance activities

planned for that year, sites must decide which activities to defer to future

years. In contrast, if sites receive more funding than anticipated in a

particular year, they have an opportunity to increase the amount of money

spent on compliance requirements.

Compliance agreements are site-specific and are not intended to provide a

mechanism for DOE to use in prioritizing risks among the various sites.

The agreements reflect local DOE and community priorities for addressing

environmental contamination at individual sites and were not designed or

developed to consider environmental risk from a DOE-wide perspective.

DOE has made several attempts to develop a risk-based methodology

across its sites, but has not succeeded because of problems, such as its

failure to integrate any of the approaches into the decision-making

process. Rather than prioritize risk across sites, DOE has attempted to

provide a relatively stable amount of funding at each site from year to year

and generally allow local DOE managers and the community to determine

the priorities for sequencing work at each site. However, DOE’s February

2002 initiative to improve the Environmental Management program has as

a central component developing risk-reduction priorities and

concentrating its efforts on activities that contribute to risk reduction.

DOE is considering how to best develop a risk-based cleanup strategy, but

it is unclear when the strategy will be in place. Meanwhile, DOE is

proceeding to select and approve sites where cleanup activities would be

accelerated. To date, at least five major DOE sites with compliance

agreements have signed letters of intent with their regulators outlining an

agreement in principle to accelerate cleanup with increased funding.

Compliance agreements have not been a barrier to previous DOE

management initiatives, but it is not clear if the compliance agreements

will be used to oppose DOE’s latest initiative to focus on accelerating risk

reduction at the sites. This initiative could have a potentially greater

impact on cleanup approaches and funding levels than prior initiatives.

DOE’s past management initiatives, such as the contract reform initiative,

generally have not involved significant changes in cleanup approach or

significant reductions in funding at individual sites. Regulators generally

supported these initiatives, saying that they favor efforts to implement

faster, less costly ways to reduce the environmental risks at the sites, as

long as DOE’s approach did not reduce funding for individual sites. DOE’s
Page 4 GAO-02-852T Waste Cleanup

recent initiative, however, has the potential to alter the funding balance

among DOE sites. In some cases, it involves potential changes in

technology or approach that would result in leaving more of the waste on

site than currently planned and thus could significantly reduce cleanup

costs. In other cases, it could allocate funding using a greater emphasis on

risk reduction, which could shift funding among sites. Regulators told us

that they would be opposed to receiving reduced funding at their

individual sites and might not be willing to modify the compliance

agreements to further extend schedule milestones. DOE generally did not

involve the regulators in developing its reform initiative, but it is now

coordinating with regulators as it develops implementation strategies for

each site. Beyond the five or more letters of intent signed to date, it is too

early to tell if regulators will support these changes to site cleanup

programs. Furthermore, even at locations where letters of intent have

been signed, many technical, regulatory, and operational decisions need to

be made to implement the proposals.

DOE is responsible for a nationwide complex of facilities created during

World War II and the Cold War to research, produce, and test nuclear

weapons. Much of the complex is no longer in productive use, but it

contains vast quantities of radioactive waste related to the production of

nuclear material, such as plutonium-contaminated sludge, and hazardous

waste, such as solvents and hazardous chemicals. Since the 1980s, DOE

has been planning and carrying out activities around the complex to clean

up, contain, safely store, and dispose of these materials. It is a daunting

challenge, involving the development of complicated technologies and

costing about $220 billion over 70 years or more. DOE has reported

completing its cleanup work at 74 of the 114 sites in the complex, but

those were small and the least difficult to deal with. The sites remaining to

be cleaned up present enormous challenges to DOE.

DOE’s cleanup program is carried out primarily under two environmental

laws. Under section 120 of CERCLA, EPA must, where appropriate,

evaluate hazardous waste sites at DOE’s facilities to determine whether

the waste sites qualify for inclusion on the National Priorities List, EPA’s

list of the nation’s most serious hazardous waste sites. For each facility

listed on the National Priorities List, section 120(e) (2) of CERCLA

requires DOE to enter into an interagency agreement with EPA for the

completion of all necessary remedial actions at the facility. These

agreements often include the affected states as parties to the agreements.

These agreements may be known as Federal Facility Agreements or TriParty Agreements. Under amendments to RCRA contained in section 105

Background
Page 5 GAO-02-852T Waste Cleanup

of the Federal Facility Compliance Act of 1992, DOE generally must

develop site treatment plans for its mixed-waste sites.4

 These plans are

submitted for approval to states authorized by EPA to perform regulatory

responsibilities for RCRA within their borders or to EPA if the state does

not have the required authority. Upon approval of the treatment plans, the

state or EPA must issue an order requiring compliance with the approved

plan. The agreements are generally known as Federal Facility Compliance

orders.

DOE carries out its cleanup program through the Assistant Secretary for

Environmental Management and in consultation with a variety of

stakeholders. These include the federal EPA and state environmental

agencies, county and local governmental agencies, citizen groups, advisory

groups, Native American tribes, and other organizations. In most cases,

DOE’s regulators are parties to the compliance agreements.5

 Other

stakeholders advocate their views through various public involvement

processes including site-specific advisory boards.

Compliance agreements in effect at DOE sites can be grouped into three

main types (see table 1). Agreements of the first type—those specifically

required by CERCLA or by RCRA—are in effect at all of DOE’s major sites.

They tend to cover a relatively large number of cleanup activities and have

the majority of schedule milestones that DOE must meet. By contrast,

agreements that implement court-ordered settlements exist at only a few

DOE sites, tend to be focused on a specific issue or concern, and have

fewer associated schedule milestones. These agreements are typically

between DOE and states. The remaining agreements are based on either

federal or state environmental laws and address a variety of purposes,

such as cleaning up spills of hazardous waste or remediating groundwater

contamination, and have a wide-ranging number of milestones.

 4

 Mixed wastes are wastes that contain both radioactive materials subject to the Atomic

Energy Act and hazardous wastes, such as degreasing solvents.

5

 In a few instances, other stakeholders have become signatories to compliance agreements

in the settlement of ongoing litigation brought against DOE.

Compliance

Agreements Are of

Three Main Types
Page 6 GAO-02-852T Waste Cleanup

Table 1: Types of DOE Compliance Agreements and Related Schedule Milestones

Type of agreement

Number of

agreements Number of sites

Number of

enforceable

milestones

Agreements specifically

required to implement

CERCLA and RCRA

requirements

29 20 5,251

Court-ordered agreements

resulting from lawsuits

6 6 146

All other agreements 35 12 1,789

Total 70 23a7,186

a

The numbers in this column do not add because many DOE sites have more than one agreement.

Source: GAO analysis of DOE data.

Most of the milestones DOE must meet are contained in the compliance

agreements at its six largest sites—Hanford, Savannah River, Idaho Falls,

Rocky Flats, Oak Ridge, and Fernald. These six DOE sites are important

because they receive about two-thirds of DOE’s cleanup funding. In all,

these sites account for 40 of the agreements and more than 4,200

milestones.

DOE reported completing about two-thirds of the 7,186 milestones

contained in its compliance agreements as of December 2001. Of the 4,558

milestones completed, about 80 percent were finished by the original due

date for the milestone. The remainder of the completed milestones were

finished either after the original due date had passed or on a renegotiated

due date, but DOE reported that the regulators considered the milestones

to be met. DOE’s six largest sites reported completing a total of 2,901 of

their 4,262 milestones and met the original completion date for the

milestones an average of 79 percent of the time. As table 2 shows, this

percentage varied from a high of 95 percent at Rocky Flats to a low of 47

percent at Savannah River. Besides the 1,334 milestones currently yet to

be completed, additional milestones will be added in the future.

Most Milestone Dates

Have Been Met, but

Meeting Milestones Is

Not a Good Measure

of Cleanup Progress
Page 7 GAO-02-852T Waste Cleanup

Table 2: Information on Compliance Agreement Milestones at DOE’s Six Largest Cleanup Sites

Dollars in millions

Site and state

Current EM

lifecycle

cleanup

estimate

Number of

enforceable

milestonesa

Number of

milestones

completed

Number of

milestones

completed on

original dateb

Percent of

completed

milestones

meeting original

due date

Hanford (including Office of

River Protection),

Washington

$62,097 1,080 825 743 90

Savannah River, South

Carolina

37,809 714 556 264 47

Idaho Falls, Idaho 27,881 428 334 312 93

Oak Ridge, Tennessee 8,456 846 513 360 70

Rocky Flats, Colorado 7,705 119 62 59 95

Fernald, Ohio 3,341 1,075 611 558 91

a

The total number of milestones is not yet known because at some sites, many milestones will be

added in the future as cleanup strategies change, new schedules are set, and new work is defined.

b

The number of milestones completed on the original due date is the total of all milestones

satisfactorily completed by the original date DOE agreed to with regulators. Those milestones

completed on other than the original due date were generally not considered missed milestones

because the milestone dates were either extended or renegotiated with regulators.

Source: GAO analysis of DOE data.

Although DOE has completed many of the milestones on time, for several

reasons DOE’s success in completing milestones on time is not a good

measure of progress in cleaning up the weapons complex. Specifically:

Many of the milestones do not indicate what cleanup work has been

accomplished. For example, many milestones require completing an

administrative requirement that may not indicate what, if any, actual

cleanup work was performed. At DOE’s six largest sites, DOE officials

reported that about 73 percent of the 2,901 schedule milestones completed

were tied to administrative requirements, such as obtaining a permit or

submitting a report.

Some agreements do not have a fixed number of milestones, and

additional milestones are added over time as the scope of work is more

fully defined. For example, one of Idaho Falls’ compliance agreements

establishes milestones for remedial activities after a record of decision6

 6

 A record of decision is a document used to select the method of remedial action to be

implemented at a site following the completion of a feasibility study or an environmental

impact statement.
Page 8 GAO-02-852T Waste Cleanup

has been signed for a given work area. Four records of decision associated

with the agreement have not yet been approved. Their approval will

increase the number of enforceable milestones required under that

agreement.

Many of the remaining milestones are tied to DOE’s most expensive and

challenging cleanup work, much of which still lies ahead. Approximately

two-thirds of the estimated $220 billion cost of cleaning up DOE sites will

be incurred after 2006. DOE has reported that the remaining cleanup

activities present enormous technical and management challenges, and

considerable uncertainties exist over the final cost and time frame for

completing the cleanup.

Even though schedule milestones are of questionable value as a measure

of cleanup progress, the milestones do help regulators track DOE’s

activities. Regulators at the four sites we visited said that the compliance

agreements they oversee and the milestones associated with those

agreements provide a way to bring DOE into compliance with existing

environmental laws and regulations. They said the agreements also help to

integrate the requirements under various federal laws and allow regulators

to track annual progress against DOE’s milestone commitments.

Regulators have generally been flexible in agreeing with DOE to change

milestone dates when the original milestone could not be met. DOE

received approval to change milestone deadlines in over 93 percent of the

1,413 requests made to regulators. Only 3 percent of DOE’s requests were

denied. Regulators at the four sites we visited told us they prefer to be

flexible with DOE on accomplishing an agreement’s cleanup goals. For

example, they generally expressed willingness to work with DOE to

extend milestone deadlines when a problem arises due to technology

limitations or engineering problems. Because regulators have been so

willing to adjust milestones, DOE officials reported missing a total of only

48 milestones, or about 1 percent of milestones that have been completed.

Even in those few instances where DOE missed milestone deadlines and

regulators were unwilling to negotiate revised dates, regulators have

infrequently applied penalties available under the compliance agreements.

DOE reported that regulators have taken enforcement actions only 13

times since 1988 when DOE failed to meet milestone deadlines. These

enforcement actions resulted in DOE paying about $1.8 million in

monetary penalties, as shown in table 3.

Regulators’ Flexible

Approach Results in

Renegotiated Milestones

and Few Penalties
Page 9 GAO-02-852T Waste Cleanup

Table 3. Number of Compliance Agreement Missed Milestones and Monetary

Penalties Paid at DOE Sites

Site and state

Milestones

missed

Enforcement

actions taken

Monetary penalty

paid

Hanford, Washington 13 2 $100,000a

Idaho Falls, Idaho 4 2 970,000b

Portsmouth, Ohio 2 2 292,000

Fernald, Ohio 7 3 250,000

Oak Ridge, Tennessee 2 2 100,000

Rocky Flats, Colorado 2 2 100,000

Total 30 13 $1,812,000

a

Hanford regulators recently levied a monetary penalty of $5,000 for the first week and $10,000 for

each additional week that DOE missed a July 31, 2001, milestone to start construction of a waste

treatment facility. However, regulators said they will cancel the penalty if DOE meets a new milestone

date set for the end of this year. Therefore, this monetary penalty is not included in table 3.

b

In April 2002, DOE agreed to pay $800,000 for missing a milestone requiring submission of scope of

work documents for one of the site’s waste burial sites. As of the time of this report, DOE had not yet

paid the penalty. Therefore, this monetary penalty is not included in table 3.

Source: GAO analysis of DOE data.

In addition to or instead of regulators assessing monetary penalties,

several DOE sites agreed to other arrangements valued at about $4 million.

For example, for missing a milestone to open a transuranic7

 waste storage

facility at the Rocky Flats site, the site agreed to provide a $40,000 grant to

a local emergency planning committee to support a chemical-safety-inschools program. At the Oak Ridge site, because of delays in operating a

mixed waste incinerator, site officials agreed to move up the completion

date for $1.4 million worth of cleanup work already scheduled. Also, at

three sites—Paducah, Kentucky; Lawrence Livermore Main Site,

California; and Nevada Test Site, Nevada—the regulators either did not

impose penalties for missed milestones or the issue was still under

discussion with DOE at the time of our review.

 7

 Transuranic waste contains man-made radioactive elements with atomic numbers higher

than that of uranium, such as plutonium.
Page 10 GAO-02-852T Waste Cleanup

The President’s budget submitted to the Congress does not provide

information on the amount of funding requested for DOE’s compliance

requirements. DOE sites prepare budget estimates that include compliance

cost estimates and submit them for consideration by DOE headquarters.

However, DOE headquarters officials evaluate individual site estimates

and combine them into an overall DOE-wide budget, taking into account

broader considerations and other priorities that it must address as part of

the give-and-take of the budget process. As a result, the final budget sent

to the Congress has summary information on DOE’s programs and

activities, but it provides no information on the portion of the budget

needed to fund compliance requirements. DOE is not required to develop

or present this information to the Congress. The President’s budget

typically states that the DOE funding requested is sufficient to

substantially comply with compliance agreements, but it does not develop

or disclose the total amount of funding needed for compliance. Officials at

DOE headquarters told us that budget guidance from the Office of

Management and Budget does not require DOE to develop or present

information on the cost of meeting compliance requirements, and they

said doing so for the thousands of milestones DOE must meet would be

unnecessarily burdensome. They said their approach has been to allocate

funds appropriated by the Congress and make it the sites’ responsibility to

use the funds in a way that meets the compliance agreement milestones

established at the site level.

Individual DOE sites develop information on the estimated cost of meeting

compliance agreements, but the annual estimates are a flexible number.

Sites develop these estimates because many of the compliance agreements

require DOE to request sufficient funding each year to meet all of the

requirements in the agreements. Also, DOE must respond to Executive

Order 12088, which directs executive agencies to ensure that they request

sufficient funds to comply with pollution control standards. Accordingly,

each year DOE’s sites develop budget estimates that also identify the

amount needed to meet compliance requirements. The sites’ process in

developing these compliance estimates shows that a compliance estimate

is a flexible number. For example, two budget estimates typically

completed by the sites each year are the “full requirements” estimate and

the “target” estimate. The full requirements estimate identifies how much

money a site would need to accomplish its work in what site officials

consider to be the most desirable fashion. The target estimate reflects a

budget strategy based primarily on the amount of funding the site received

the previous year and is considered a more realistic estimate of the

funding a site can expect to receive. For each of these budget estimates,

DOE sites also include an estimate of their compliance costs. As a result of

DOE’s Budget

Request Does Not

Identify the Funding

Needed to Meet

Compliance

Requirements
Page 11 GAO-02-852T Waste Cleanup

this process, DOE sites usually have at least two different estimates of

their compliance costs for the same budget year. Table 4 shows how the

compliance cost estimates related to compliance agreements changed

under different budget scenarios at four DOE sites.

Table 4: Cost of Meeting Compliance Requirements under Two Different Budget

Scenarios at Four DOE Sites, Fiscal Year 2002

Dollars in millions

Full requirements estimate Target estimate

DOE Site ComplianceaTotal ComplianceaTotal

Hanford

Richland $429.6 $958.4 $265.5 $721.8

River Protection 987.1 1,149.7 685.2 838.0

Idaho Falls 366.6 643.1 313.6 540.6

Savannah River 294.5 1,411.1 288.4 1,268.5

Oak Ridge 424.6 741.7 405.5 668.3

a

The compliance amounts in this column show only the funding associated with meeting requirements

contained in compliance agreements. It does not include (1) estimates of the funding needed to

comply with requirements in federal, state, or local environmental laws and regulations that are not

part of a compliance agreement or (2) the funding DOE estimates is necessary to maintain minimal

site infrastructure, security, and safety requirements.

Source: GAO analysis of DOE data.

The multiple estimates of compliance costs developed by individual DOE

sites indicate that DOE sites have alternative ways of achieving

compliance in any given year. DOE site officials said that how much DOE

plans to spend on compliance activities each year varies depending on the

total amount of money available. Because many of the compliance

milestones are due in the future, sites estimate how much compliance

activity is needed each year to meet the future milestones. If sites

anticipate that less money will be available, they must decide what

compliance activities are critical for that year and defer work on some

longer-term milestones to future years. On the other hand, if more money

is available, sites have an opportunity to increase spending on compliance

activities earlier than absolutely necessary.
Page 12 GAO-02-852T Waste Cleanup

DOE’s compliance agreements focus on environmental issues at specific

sites and do not include information on the risks being addressed. As a

result, they do not provide a means of setting priorities for risks among

sites or a basis for decision-making across all DOE sites. Risk is only one

of several factors considered in setting the milestones in compliance

agreements. Other factors include the preferences and concerns of local

stakeholders, business and technical risk, the cost associated with

maintaining old facilities, and the desire to achieve demonstrable progress

on cleanup. The schedules for when and in what sequence to perform the

cleanup work reflect local DOE and stakeholder views on these and other

factors and may not reflect the level of risk. For example, regulators at

DOE’s Savannah River site told us that they were primarily concerned that

DOE maintain a certain level of effort and they expected DOE to schedule

cleanup activities to most efficiently clean up the site. DOE developed a

decision model to determine how to allocate its cleanup dollars at

Savannah River to achieve this efficiency. A group of outside reviewers

assessing the system at the request of site management concluded that the

model was so strongly weighted to efficiency that it was unlikely that

serious risks to human health or the environment could alter the

sequencing of work. DOE officials said they revised the model so that

serious risks receive greater emphasis.

In response to concerns expressed by the Congress and others about the

effectiveness of the cleanup program, DOE has made several attempts to

develop a national, risk-based approach to cleanup, but has not succeeded.

For example, in 1999, DOE pilot-tested the use of site risk profiles at 10

DOE offices. The profiles were intended to provide risk information about

the sites, make effective use of existing data at the sites, and incorporate

stakeholder input. However, reviewers found that the site profiles failed to

adequately address environmental or worker risks because the risks were

not consistently or adequately documented. In 2001, DOE eliminated a

support group responsible for assisting the sites with this effort, and the

risk profiles are generally no longer being developed or used.

A 1999 DOE-funded study to evaluate its efforts to establish greater use of

risk-based decision-making concluded that none of the attempts had been

successful.8

 Common problems identified by the study included poor

 8

 Consortium for Risk Evaluation with Stakeholder Participation, Peer Review of the U.S.

Department of Energy’s Use of Risk in Its Prioritization Process, (New Brunswick, NJ:

Dec. 15, 1999).

Compliance

Agreements Are Site

Specific and Do Not

Allow for Managing

Risks Across DOE

Sites

DOE’s Attempts to

Develop a Risk-Based

Approach Have Not Been

Successful
Page 13 GAO-02-852T Waste Cleanup

documentation of risks and inconsistent scoring of risks between sites.

The study reported that factors contributing to the failure of these efforts

included a lack of consistent vision about how to use risk to establish

work priorities, the lack of confidence in the results by DOE personnel,

the unacceptability of the approaches to stakeholders at the sites, and

DOE’s overall failure to integrate any of the approaches into the decisionmaking process. However, the study concluded that the use of risk as a

criterion for cleanup decision-making across DOE’s sites not only was

essential, it was also feasible and practical, given an appropriate level of

commitment and effort by DOE.

DOE plans to shift its cleanup program to place greater focus on rapid

reduction of environmental risk, signaling yet again the need for a national

risk-based approach to cleanup. Without a national, risk-based approach

to cleanup in place, DOE’s budget strategy had been to provide stable

funding for individual sites and to allow the sites to determine what they

needed most to accomplish. However, in a February 2002 report, DOE

described numerous problems with the environmental management

program and recommended a number of corrective actions.9

 The report

concluded that, among other things, the cleanup program was not based

on a comprehensive, coherent, technically supported risk prioritization; it

was not focused on accelerating risk reduction; and it was not addressing

the challenges of uncontrolled cost and schedule growth. The report

recommended that DOE, in consultation with its regulators, move to a

national strategy for cleanup. In addition, the report noted that the

compliance agreements have failed to achieve the expected risk reduction

and have sometimes not focused on the highest risk. The report

recommended that DOE develop specific proposals and present them to

the states and EPA with accelerated risk reduction as the goal.

DOE’s new initiative provides additional funds for cleanup reform and is

designed to serve as an incentive to sites and regulators to identify

accelerated risk reduction and cleanup approaches. DOE’s fiscal year 2003

budget request includes a request for $800 million for this purpose.

Moreover, the Administration has agreed to support up to an additional

$300 million if needed for cleanup reforms. The set-aside would come

from a reduction in individual site funding levels and an increase in the

 9

 U.S. Department of Energy, A Review of the Environmental Management Program,

(Washington, D.C.: Feb. 4, 2002).

Accelerated Schedules in

DOE Initiative Signal the

Need to Develop a RiskBased Approach
Page 14 GAO-02-852T Waste Cleanup

overall funding level for the cleanup program. The money would be made

available to sites that reach agreements with federal and state regulators

on accelerated cleanup approaches. Sites that do not develop accelerated

programs would not be eligible for the additional funds. As a result, sites

that do not participate could receive less funding than in past years.

To date, at least five major DOE sites with compliance agreements have

signed letters of intent with their regulators outlining an agreement in

principle to accelerate cleanup—Hanford, Idaho, Los Alamos, Oak Ridge,

and Nevada Test Site. However, the letters of intent generally also include

a provision that the letters do not modify the obligations DOE agreed to in

the underlying compliance agreements. At Hanford, DOE and the

regulators signed a letter of intent in March 2002 to accelerate cleanup at

the site by 35 years or more. DOE and the regulators agreed to consider

the greatest risks first as a principle in setting cleanup priorities. They also

agreed to consider, as targets of opportunity for accelerated risk

reduction, 42 potential areas identified in a recent study at the site. While

accelerating the cleanup may hold promise, Hanford officials

acknowledged that many technical, regulatory, and operational decisions

need to be made to actually implement the proposals in the new approach.

DOE is proceeding with the selection and approval of accelerated

programs at the sites, as well as identifying the funding for those

accelerated programs. At the same time, DOE is considering how best to

develop a risk-based cleanup strategy. DOE’s Assistant Secretary for

Environmental Management said that in developing the risk-based

approach, DOE should use available technical information, existing

reports, DOE’s own knowledge, and common sense to make risk-based

decisions. Because DOE’s approach to risk assessment is under

development, it is unclear whether DOE will be able to overcome the

barriers encountered during past efforts to formalize a risk-assessment

process. In the interim, DOE headquarters review teams were evaluating

the activities at each site and were qualitatively incorporating risk into

those evaluations.
Page 15 GAO-02-852T Waste Cleanup

Compliance agreements have not been a barrier to previous DOE

management improvements, but it is not clear if the agreements will be

used to oppose proposed changes stemming from the February 2002

initiative. DOE has implemented or tried to implement a number of

management initiatives in recent years to improve its performance and

address uncontrolled cost and schedule growth. For example, in 1994, it

launched its contract reform initiative; in 1995, it established its

privatization initiative;10 and in 1998, it implemented its accelerated pathto-closure initiative. These initiatives affected how DOE approached the

cleanup work, the relationship DOE had with its contractors, and, in some

cases, the schedule for completing the work. Based on our review of past

evaluations of these initiatives and discussions with DOE officials and

regulators at DOE sites, it appears that DOE proceeded with these

initiatives without significant resistance or constraints as a result of the

compliance agreements.

Because DOE’s cleanup reform initiative is in its early stages, and sitespecific strategies are only beginning to emerge, it is unclear how the site

compliance agreements will affect implementation of DOE’s latest cleanup

reforms. For example, it is not yet known how many sites will participate

in DOE’s initiative and how many other sites will encounter cleanup delays

because of reduced funding. However, early indications suggest caution.

Parties to the agreements at the sites we visited were supportive of DOE’s

overall efforts to improve management of the cleanup program, but

expressed some concerns about proposals stemming from the February

2002 review of the program. They said that they welcome DOE’s efforts to

accelerate cleanup and focus attention on the more serious environmental

risks because such initiatives are consistent with the regulators’ overall

goals of reducing risks to human health and the environment. Most

regulators added, however, that DOE generally had not consulted with

them in developing its reform initiative and they were concerned about

being excluded from the process. Furthermore, they said DOE’s initiative

lacked specific details and they had numerous questions about the criteria

DOE will use to select sites and the process it will follow at those sites to

develop an implementation plan to accelerate cleanup and modify cleanup

approaches.

 10 DOE’s privatization was intended to reduce the cost of cleanup by attracting “best in

class” contractors with fixed price contracts that required contractors to design, finance,

build, own, and operate treatment facilities and to receive payments only for successfully

treating DOE’s wastes.

Compliance

Agreements Were Not

a Barrier to Past

Management

Improvements, but

Impact on February

2002 Initiative Is

Unclear
Page 16 GAO-02-852T Waste Cleanup

Most regulators said they would not view as favorable any attempt by DOE

to avoid appropriate waste treatment activities or significantly delay

treatment by reducing funding available to sites. In such a case, these

regulators are likely to oppose DOE’s initiative. They told us that they

most likely would not be willing to renegotiate milestones in the

compliance agreements if doing so would lead to delays in the cleanup

program at their sites. In addition, these regulators said that if DOE misses

the milestones after reducing the funding at individual sites, they would

enforce the penalty provisions in the compliance agreements.

The effect of compliance agreements on other aspects of DOE’s initiative,

especially its proposal to reclassify waste into different risk categories to

increase disposal options, is also unclear. Some of the proposed changes

in waste treatment would signal major changes in DOE assumptions about

acceptable waste treatment and disposal options. For example, one

change would eliminate the need to vitrify at least 75 percent of the highlevel waste, which could result in disposing of more of the waste at DOE

sites. In addition, DOE is considering the possibility of reclassifying much

of its high-level waste as low-level mixed waste or transuranic waste based

on the risk attributable to its actual composition.11 However, at all four

sites we visited, regulators said that it is unclear how DOE’s proposed

initiatives will be implemented, what technologies will be considered, and

whether the changes will result in reduced cost and accelerated cleanup

while adequately protecting human health and the environment.

DOE generally did not seek input from site regulators or other

stakeholders when developing its latest initiative. DOE’s review team

leader said that when the review team visited individual sites, the team

had not formulated its conclusions or recommendations and so did not

seek regulators’ views. Furthermore, the team leader said that, during the

review, DOE was holding internal discussions about improving ineffective

cleanup processes, such as contracting procedures. To include regulators

on the review team during these discussions, according to the team leader,

could have created the impression that the criticism of DOE processes

came from the regulators rather than from DOE and contractor staff.

According to the Associate Deputy Assistant Secretary for Planning and

Budget, since the review team’s proposals were made public in February,

 11 Currently, DOE classifies this high-level waste based on the treatment process that

created the waste.
Page 17 GAO-02-852T Waste Cleanup

DOE has held discussions with regulators at all sites and headquarters

about implementing the proposals.

In summary, Mr. Chairman, DOE faces two main challenges in going

forward with its initiative. The first is following through on its plan to

develop and implement a risk-based method to prioritize its various

cleanup activities. Given past failed attempts to implement a risk-based

approach to cleanup, management leadership and resolve will be needed

to overcome the barriers encountered in past attempts. The second

challenge for DOE is following through on its plan to involve regulators in

site implementation plans. DOE generally did not involve states and

regulatory agencies in the development of its management initiative.

Regulators have expressed concerns about the lack of specifics in the

initiative, how implementation plans will be developed at individual sites,

and about proposals that may delay or significantly alter cleanup

strategies. Addressing both of these challenges will be important to better

ensure that DOE’s latest management initiative will achieve the desired

results of accelerating risk reduction and reducing cleanup costs.

Thank you, Mr. Chairman and Members of the Subcommittee. This

concludes my testimony. I will be happy to respond to any questions that

you may have.
Page 18 GAO-02-852T Waste Cleanup

For future contacts regarding this testimony, please contact (Ms.) Gary

Jones at (202) 512-3841. Chris Abraham, Doreen Feldman, Rich Johnson,

Nancy Kintner-Meyer, Tom Perry, Ilene Pollack, Stan Stenersen, and Bill

Swick made key contributions to this report.

GAO Contact and Staff Acknowledgment

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