Audit Report 

The Department's Progress in Meeting 

Los Alamos National Laboratory 

Consent Order Milestones 

DOE/IG-0793 April 2008 

U.S. Department of Energy 

Office of Inspector General 

Office of Audit Services 
Department of Energy 

Washington, DC 20585 

April 11, 2008 

MEMORANDUM FOR THE SECRETARY 

FROM: +F Greg y . Friedman 

Inspector General 

SUBS ECT: INFORMATION: Audit Report on "The Department's Progress in 

Meeting Los Alamos National Laboratory Consent Order 

Milestones." 

lNTRODUCTIOlU AND OBJECTIVE 

As early as 1943, Los Alamos National Laboratory began disposing of its hazardous 

waste in pits, trenches, shafts, and landfills. In March 2005, the Laboratory, the New 

Mexico Environment Department, and the Department of Energy signed a Consent Order 

to address the potential release of contamination from this waste. The Consent Order 

provides requirements and a timetable for environmental cleanup. The Department's 

Office of Environmental Management funds the work necessary to meet Consent Order 

requirements. The National Nuclear Security Administration is responsible, through its 

laboratory contractor, Los Alamos National Security, LLC, for managing and performing 

the work. 

The Consent Order contains specific milestones designed to ensure that the 

characterization and remediation process is completed by 201 5. Included in the Order are 

milestones for Areas L and G, which are located in Technical Area 54. The Department 

is required to complete and demonstrate the effectiveness of remediation actions for these 

sites by July 201 1 and December 201 5, respectively. Area G is the largest of Los 

Alamos' waste disposal areas and contains a significant amount of hazardous waste. 

Although the Department met 54 of 56 milestone requirements that were to have been 

completed by September 30, 2007, it has acknowledged that it is behind schedule in 

completing work to meet several Fiscal Year 2008 milestones. Given this 

acknowledgement, we focused our review on evaluating the Department's progress 

toward completing long-term remediation actions. 

RESULTS OF AUDIT 

The audit disclosed that, absent a dramatic change in approach, it is unlikely that the 

Department will complete certain long-term remediation activities at Los Alamos in 

accord with existing requirements. Specifically, the Department has experienced delays 

in removing waste and facilities in Areas L and G, making it unlikely that remediation 

milestones established in the Consent Order for these areas will be met. Our finding at 

Los Alamos is consistent with a broader observation made recently by Department 
management that the agency would not meet some milestones and obligations contained 

in environmental agreements that have been negotiated over many years. 

For Areas L and G at Los Alamos, we noted that the Department: 

Did not begin decontamination and decommissioning of 58 structures in Area G 

and six structures in Area L in 2007, as planned, and does not anticipate f~inding 

such work until FY 201 1 ; and, 

Has experienced delays in removing high-activity transuranic waste from Area G, 

and, it may be forced to extend the removal schedule for all transuranic waste 

from 20 12 to 201 4 due to funding constraints. 

Los Alamos officials indicated that it would take three years after removal of the 

transuranic waste to complete remediation work at Area G, making it i~nlikely that the 

Department will be able to meet the 201 5 Consent Order milestone. Additionally, 

extending the schedule for the removal of all transuranic waste to 2014, gives the 

Department only one year to meet the Consent Order's 201 5 milestone for Area G. The 

completion of the necessary work in one year is highly problematic. 

The Department's ability to meet Consent Order milestones was adversely impacted 

because it had not: 

Ensured that the funding priority for decontamination and decommissioning work 

was consistent with priorities established for meeting Consent Order milestones; 

and, 

Fully identified the funding needed to carry out all the work necessary to meet the 

milestones until November 2007. 

We rioted that facility decontamination and decommissioning was ranked significantly 

lower in funding priorities than remediation at Los Alamos, despite the fact that 

remediation work cannot be completed until the decontamination and decommissioning 

of facilities is finished. Additionally, funding has not been sufficient, according to 

Department officials, to carry out all the work necessary to meet the requirements of the 

Order. Funding has been a major concern since 2005 when the Department signed the 

agreement. In fact, in 2005 the Los Alamos Site Office Manager wrote, that he had 

strong reservations that the appropriate resources had not been identified to fully execute 

the environmental restoration program needed to meet the requirements of the Consent 

Order. 

We further noted that although Los Alamos had prepared cost estimates as early as 2005 

for meeting the Consent Order milestones, the Department did not have a certified 

performance cost baseline to support its funding requests until November 2007. A 

certified baseline establishes the cost, schedule and contingency needed to meet the 

milestones requirements. Based on the November 2007 baseline, a projected funding 

shortfall exists each year through 201 2. Additionally, the projected funding for Consent 

Order activities does not cover $947 million in "iinfunded" contingencies. 
Delays in completing the substantial remediation work associated with the Consent Order 

milestones niay increase the risk of employee and public exposure to contaminants. 

Furthermore, such delays are likely to increase the cost of the overall environmental 

cleanup. To address this situation, we made recommendations to improve management 

of available funds and the schedule for meeting Consent Order milestones. 

MANAGEMENT REACTION 

Management officials from the National Nuclear Security Administration and the Office 

of Environmental Management concurred with the audit recommendations. 

Environmental Management acknowledged that its FY 2009 budget would not allow it to 

meet certain milestones contained in environmental agreements that have been negotiated 

with regulators, and some milestones will be missed regardless of funding. Management 

noted that some of the agreements were negotiated with incomplete knowledge of the 

technical complexity and magnitude of costs that would be involved. 

Management further indicated that it has reason for optimism regarding the 

environmental clean-up effort at Los Alamos. It asserted that contractor and project 

performance have improved. As a result, two 'formerly at risk' milestones under the 

Consent Order have been met, and the rate of offsite shipment of the highest-activity 

mixed transuranic waste has increased. Management expressed the view that it now 

possesses the tools to work with the regulator to re-order work packages and set priorities 

to accomplish the clean-up objectives for the site. Management's comments are included 

in their entirety in Appendix 3. 

cc: Acting Deputy Secretary 

Under Secretary for Energy 

Administrator for National Nuclear Security Administration 

Assistant Secretary for Environmental Management 

Chief of Staff 

Manager, Los Alamos Site Office 

Director, Policy and Internal Controls Management, NA-66 
REPORT ON THE DEPARTMENT'S PROGRESS IN MEETING LOS 

ALAMOS NATIONAL LABORATORY CONSENT ORDER 

MILESTONES 

TABLE OF 

CONTENTS 

 Consent Order Cleanup at Los Alamos National Laboratory

 Details of Finding ..............................................................................1 

 Recommendations and Comments.....................................................4 

Appendices

1. Objective, Scope, and Methodology............................................5 

2. Related Audit Reports..................................................................7 

3. Management Comments ..............................................................8 

 

 

 
Consent Order Cleanup at Los Alamos National Laboratory 

Page 1 Details of Finding 

Consent Order The Department of Energy (Department) is in jeopardy of not 

Milestones completing remediation activities in Areas L and G of Los Alamos 

National Laboratory's (Los Alamos) Technical Area 54, by 2011 

and 2015, respectively, as required by the Consent Order. 

Specifically, the National Nuclear Security Administration 

(NNSA) has experienced delays in performing work that must be 

conducted in these areas before remediation activities can be 

completed. 

NNSA did not begin the decontamination and decommissioning of 

58 structures in Area G and 6 structures in Area L in Fiscal Year 

(FY) 2007 as scheduled. Until these structures are removed, the 

Department cannot fully perform remediation activities of the soil 

beneath them. The Office of Environmental Management (EM), 

which provides funding to meet Consent Order requirements, does 

not plan to fund the decontamination and decommissioning work 

until FY 2011. Since decontamination and decommissioning work 

is being delayed, the schedule for completing both prerequisite and 

Consent Order work for Area L may be compressed from five 

years to one year; and, the Area G schedule may be compressed 

from nine years to five years. NNSA has not revised the schedule 

baseline for meeting the Consent Order milestones to recognize the 

impact of the four-year delay in beginning the prerequisite 

decontamination and decommissioning work to meet the 2011 and 

2015 milestones for Areas L and G remediation. 

Additionally, NNSA experienced delays in removing high-activity 

transuranic waste located in Technical Area 54, Area G. In order 

to meet the 2015 Consent Order milestone, NNSA had planned to 

remove all transuranic waste from Area G by 2012. However, 

NNSA has prepared a draft schedule baseline change that would 

extend completing transuranic waste removal by two years until 

2014 due to funding constraints. A two-year delay in removing all 

transuranic waste will further compress the schedule for 

completing remediation activities in Area G, since all transuranic 

waste would not be removed until only one year before the 2015 

milestone. Further, Los Alamos officials indicated that it would 

take three years after removal of the transuranic waste to complete 

decontamination and decommissioning and construction of the 

engineered cap at Area G, making it unlikely that the Department 

will be able to meet the 2015 milestone for completing remediation 

of the site.
Page 2 Details of Finding 

Management Issues The Department is in jeopardy of not meeting Consent Order 

milestones because it had not ensured that the funding priorities for 

prerequisite work were consistent with priorities established for 

Consent Order milestones. Additionally, the Department had not 

fully identified the funding needed to carry out all the work 

necessary to meet the milestones until November 2007. 

Funding Priorities

Funding priorities for prerequisite work such as decontamination 

and decommissioning were not consistent with the funding priority 

given to Consent Order remediation activities. EM uses a budget 

ranking process that is based largely on environmental risk to 

prioritize cleanup work within constrained funding limits. 

However, EM ranked Los Alamos' decontamination and 

decommissioning work at 96, while assigning a higher ranking of 

56 to remediation activities. The facility decontamination and 

decommissioning was ranked significantly lower than remediation 

activities despite the fact that remediation activities cannot be 

completed until the decontamination and decommissioning work is 

performed. As a result of its relatively lower ranking, EM does not 

plan to fund decontamination and decommissioning work at Los 

Alamos until FY 2011. According to EM officials, facility 

decontamination and decommissioning represents a lower risk than 

other cleanup activities and, therefore, was ranked low in its 

funding priorities. As previously noted, the higher priority 

remediation activities work necessary to meet the 2011 and 2015 

Consent Order milestones for Areas L and G cannot be completed 

until the existing structures are removed. 

Funding

Funding to meet requirements has been a major concern since the 

Department signed the Consent Order in 2005. In February 2005, 

for example, NNSA's Los Alamos Site Office Manager stated that 

he had strong reservations that the appropriate resources had not 

been identified to fully execute the environmental management 

program needed to meet the requirements of the Consent Order. 

According to EM officials, budget requests are based on balancing 

risk reduction and regulatory requirements within the fiscally 

constrained funding realities across the Federal government. This 

level of spending allows compliance with many high-priority 

obligations, as well as other high priority environmental 

management activities needed to avoid risk to human health or 
Page 3 Details of Finding 

national security. However, EM indicated that they do not have 

enough money to address all the milestones and obligations 

contained in environmental agreements that have been negotiated 

with regulators over many decades. 

Despite these concerns, EM did not have a certified performance 

cost baseline necessary to support Los Alamos' funding requests 

until November 2007. The certified baseline establishes the cost, 

schedule, and contingency needed to meet the Consent Order 

milestones. Although Los Alamos had been working on a cost 

baseline as early as 2005, the Department's Office of Engineering 

and Construction Management (OECM) did not certify a cost 

baseline until November 2007 because of concerns about 

deficiencies in cost and schedule estimates, and contingency. 

Further, the recently certified performance baseline identifies a 

projected funding shortfall each year through 2012 that peaks at a 

cumulative $236 million in 2010. We noted that this shortfall does 

not include an additional $947 million in unfunded contingency. 

According to the Department, the certified baseline means that the 

identified scope of work can be accomplished within the stated 

cost and completion date. However, OECM stated that this would 

occur only if the work projects are funded consistent with their 

respective cost profiles and contingency funds are provided as and 

when required. Furthermore, OECM pointed out that 

discrepancies between the current funding profiles and the stated 

project cost profiles must be resolved. 

Risk and Cost Delays in completing the prerequisite work and the subsequent 

impact on meeting Consent Order milestones may not only 

increase the cost of the overall environmental cleanup but may also 

increase the risk to employees and the public to exposure to 

contaminants. We noted that efforts in the past to recover the 

schedule have resulted in increased costs. For example, in 2007, 

EM experienced delays in performing the environmental 

characterization necessary to meet a 2008 Consent Order 

milestone. EM assigned additional resources to recover the 

schedule for completing the environmental characterization that 

could eventually increase costs by as much as $3 million. More 

importantly, delays in completing the environmental cleanup may 

increase the risk to public health and safety. Delays in meeting 

milestones may also adversely impact the Department's ability to 

work cooperatively with the New Mexico Environment 

Department toward achieving its environmental cleanup 

objectives.
Page 4 Recommendations and Comments 

RECOMMENDATIONS We recommend that the Assistant Secretary for Environmental 

Management ensure that: 

1. Funding priorities for prerequisite work and Consent Order 

milestones are consistent; and, 

2. Discrepancies between the current funding profiles, the 

stated project cost profiles, and related contingency are 

resolved. 

We also recommend that the Associate Administrator for 

Infrastructure and Environment, NNSA, ensure that schedules are 

updated for meeting Consent Order milestones that have been 

impacted by delays in removing all transuranic waste and 

performing the decontamination and decommissioning of facilities. 

MANAGEMENT and Management officials from NNSA and EM concurred with the 

AUDITOR COMMENTS audit recommendations. NNSA agreed to ensure that schedules are 

updated for meeting the Consent Order milestones. Similarly, EM 

agreed to ensure that funding priorities for prerequisite work and 

Consent Order milestones are consistent and that discrepancies 

between the current funding profiles, the stated project cost 

profiles and related contingency are resolved. However, EM 

recognized that their FY 2009 budget would not meet some of the 

milestones contained in all the environmental agreements 

negotiated over the many years. According to EM, incomplete 

knowledge of the technical complexity and costs involved, coupled 

with contractor performance issues impeded meeting the 

milestones and obligations contained in the environmental 

compliance agreements. Nonetheless, EM did indicate that it is 

now in a better position to have reason for optimism in the legacy 

cleanup at Los Alamos. Contractor and project performance has 

improved, which resulted in meeting two at risk Consent Order 

milestones. Further, there has been progress with the offsite 

shipment rate of the high activity transuranic waste and the 

baseline was recently certified for the integrated cleanup projects. 

Finally, EM believes it now possesses the tools to work with the 

regulator to re-order work packages and set priorities to 

accomplish the cleanup objectives for the site. 

Management's comments are included in their entirety in Appendix 3. 
Appendix 1 

Page 5 Objective, Scope, and Methodology 

OBJECTIVE The objective of this audit was to evaluate the Department of 

 Energy's progress in meeting Los Alamos National Laboratory 

 Consent Order milestones. 

SCOPE The audit was performed between January 2007 and January 2008. 

We conducted work at Los Alamos National Laboratory, the Los 

Alamos Site Office, and the National Nuclear Security 

Administration (NNSA)/Office of Environmental Management 

(EM)/Department Headquarters in Washington, DC. 

METHODOLOGY To accomplish the audit objective, we: 

• Reviewed the Consent Order, Project Execution Plan, 

 Risk Management Plan, Fiscal Year 2007 Work Plan, 

 Congressional Budget Requests, laws, regulations, 

 contractual requirements, and policies and procedures 

 relevant to the management of the environmental 

 cleanup; 

• Analyzed and compared Los Alamos baseline cost 

 estimates to the Department funding targets; 

• Reviewed the Office of Engineering and Construction 

 Management baseline certification memorandum; 

• Determined if baseline schedules, cost estimates, and 

 contingency had been validated; 

• Reviewed the draft transuranic waste baseline schedule; 

• Reviewed transuranic waste removal status reports; 

• Interviewed key personnel at Los Alamos National 

 Laboratory, the Los Alamos Site Office, and 

 NNSA/EM/Department Headquarters in Washington, 

 DC; and, 

• Reviewed results of prior audits and reviews. 

We conducted this performance audit in accordance with generally 

accepted Government auditing standards. Those standards require 

that we plan and perform the audit to obtain sufficient, appropriate 

evidence to provide a reasonable basis for our findings and 

conclusions based on our audit objectives. We believe that the 

evidence obtained provides a reasonable basis for our findings and
Appendix 1 (Continued) 

Page 6 Objective, Scope, and Methodology 

conclusions based on our audit objectives. The audit included tests 

of internal controls and compliance with laws and regulations to 

the extent necessary to satisfy the audit objective. Because our 

review was limited, it would not necessarily have disclosed all 

internal control deficiencies that may have existed at the time of 

our audit. Also, we evaluated the Department's implementation of 

the Government Performance and Results Act of 1993 as they 

related to the audit objective. Our review did identify performance 

measures directly relating to Los Alamos' Environmental 

Management Program. Since we did not rely upon automated data 

processing information to accomplish our audit objective, we did 

not conduct an assessment of the reliability of computer processed 

data. 

An exit conference was held with NNSA and EM officials on 

April 10, 2008.
Appendix 2 

Page 7 Related Audit Reports 

RELATED AUDIT REPORTS

• Transuranic Waste Management at Los Alamos National Laboratory (DOE/IG-0673, 

February 2005). The Department of Energy (Department) was not meeting its 

commitments for removing transuranic waste from Los Alamos. Based on projections, 

the Department would complete removal of all high-risk waste in October 2005. 

However, the Department estimated that it was unlikely to complete removal of the 

legacy transuranic waste before 2014. The Department was not meeting the accelerated 

waste disposal goals because Los Alamos had not consistently followed approved waste 

processing procedures. Further, to meet the accelerated schedule, Los Alamos planned to 

use mobile waste processing equipment provided by the Department; however, the 

Department did not supply the equipment because of its' concern about Los Alamos' 

ability to use the equipment in a timely manner. We concluded that unless the 

Department accelerated the processing rates, the total cost of completing the waste 

disposition project would be increased by over $70 million. 
Appendix 3 

Page 8 Management Comments 
Appendix 3 (Continued) 

Page 9 Management Comments 
Appendix 3 (Continued) 

Page 10 Management Comments 
 

IG Report No. DOE/IG-0793

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