DEPARTMENT OF 

ENERGY

Continued Actions Needed 

to Address Management 

Challenges

Statement of David C. Trimble, Director 

Natural Resources and Environment

Accessible Version

Testimony 

Before the Subcommittee on Strategic 

Forces, Committee on Armed Services, 

U.S. Senate

For Release on Delivery 

Expected at 2:30 pm ET

Wednesday, May 24, 2017

GAO-17-651T

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-17-651T, a testimony 

before the Subcommittee on Strategic Forces, 

Committee on Armed Services, U.S. Senate

May 24, 2017

DEPARTMENT OF ENERGY

Continued Actions Needed to Address Management 

Challenges

What GAO Found

The Department of Energy’s (DOE) National Nuclear Security Administration 

(NNSA) faces challenges related to the affordability of its nuclear modernization 

programs. GAO found in April 2017 that these challenges were caused by a 

misalignment between NNSA’s modernization plans and the estimated 

budgetary resources needed to carry out those plans. First, GAO found that 

NNSA’s estimates of funding needed for its modernization plans sometimes 

exceeded the budgetary projections included in the President’s planned nearterm and long-term modernization budgets. Second, GAO found that the costs of 

some major modernization programs—such as for nuclear weapon 

refurbishments—may also increase and further strain future modernization 

budgets that currently do not anticipate these potential increases. GAO 

recommended in April 2017 that NNSA include an assessment of the affordability 

of its modernization programs in future versions of its annual plan on stockpile 

stewardship; NNSA neither agreed nor disagreed with that recommendation.

DOE has taken several important steps that demonstrate its commitment to 

improving contract and project management, but challenges persist. In recent 

reports, GAO has noted progress as DOE has developed and implemented 

corrective actions to identify and address root causes of persistent project 

management challenges and progress in its monitoring of the effectiveness and 

sustainability of corrective actions. However, DOE’s recent efforts do not address 

several areas of contract and project management where the department 

continues to struggle. GAO has made several recommendations related to these 

issues, many of which DOE has not yet implemented.

DOE also faces challenges with addressing its environmental liabilities—the total 

cost of its cleanup responsibilities. In February 2017, GAO found that DOE was 

responsible for over 80 percent ($372 billion) of the U.S. government’s estimated 

$450 billion environmental liability. However, this estimate does not reflect all of 

DOE’s cleanup responsibilities. For example, in January 2017, GAO found that 

the cost estimate for DOE’s proposal for separate defense and commercial 

nuclear waste repositories excluded the costs and time frames for key activities, 

and therefore full costs are likely to be billions of dollars more than DOE’s

reported environmental liabilities. To effectively address cleanup, GAO and other 

organizations have reported that DOE needs to take a nation-wide, risk-informed

approach, which could reduce long-term costs as well as environmental risks 

more quickly. Since 1994, GAO has made at least 28 recommendations to

address the federal government’s environmental liabilities and 4 suggestions to 

Congress to consider changes to the laws governing cleanup activities. Of these, 

13 recommendations remain unimplemented. 

Finally, NNSA faces challenges in implementing its nonproliferation programs. 

For example, in June 2016, GAO found that NNSA’s Nuclear Smuggling

Detection and Deterrence program had developed a program plan, but NNSA

could not measure progress because not all of the program’s goals were 

measurable, and performance measures were not aligned with the goals. As a 

result, NNSA may not be able to determine when the program has fully achieved

its mission. GAO has made several recommendations related to NNSA’s 

nonproliferation programs, some of which NNSA has yet to implement.

View GAO-17-651T. For more information, 

contact David Trimble at (202) 512-3841 or 

trimbled@gao.gov.

Why GAO Did This Study

DOE’s NNSA is responsible for 

managing the nuclear weapons 

stockpile and supporting nuclear 

nonproliferation efforts. DOE’s Office of 

Environmental Management’s mission 

includes decontaminating and 

decommissioning facilities that are 

contaminated from decades of nuclear 

weapons production. 

Over the last few years, GAO has

reported on a wide range of challenges 

facing DOE and NNSA. These 

challenges contribute to GAO’s 

continuing inclusion of DOE’s and 

NNSA’s management of major 

contracts and projects on the list of

agencies and program areas that are 

at high risk of fraud, waste, abuse, and 

mismanagement, or are in need of 

transformation. GAO also recently 

added the U.S. government’s 

environmental liabilities to this list.

This statement is based on 13 GAO 

reports issued from May 2015 through 

May 2017 and discusses (1)

challenges related to the affordability of 

NNSA's nuclear modernization plans,

(2) the status of DOE’s efforts to 

improve its management of contracts 

and projects, (3) challenges in 

addressing DOE’s environmental 

liabilities, and (4) challenges facing 

NNSA’s nonproliferation programs.

What GAO Recommends

GAO is not making any new 

recommendations in this statement.

GAO has suggested that Congress 

consider taking certain actions and that 

DOE continue to act on the numerous 

recommendations made to address 

these challenges. GAO will continue to 

monitor DOE’s implementation of these 

recommendations.
Letter

Page 1 GAO-17-651T Department Of Energy

Letter

Chair Fischer, Ranking Member Donnelly, and Members of the 

Subcommittee:

Thank you for the opportunity to discuss our recent work on some of the 

pressing management challenges facing the Department of Energy 

(DOE) and its National Nuclear Security Administration (NNSA).1 NNSA is 

responsible for managing the nation’s nuclear security missions: ensuring 

a safe, secure, and reliable nuclear deterrent; achieving designated 

reductions in the nuclear weapons stockpile; and supporting the nation’s 

nuclear nonproliferation efforts. To implement NNSA’s weapons 

modernization plans, the agency’s February 2016 budget justification for 

the Weapons Activities appropriations account included about $49.4 

billion for fiscal years 2017 through 2021, of which about $9.2 billion was 

for fiscal year 2017. In addition, DOE, through its Office of Environmental 

Management (EM), is responsible for decontaminating and 

decommissioning nuclear facilities and sites that are contaminated from 

decades of nuclear weapons production and nuclear energy research. 

Since its inception in 1989, EM has spent over $164 billion on cleanup

efforts, including to retrieve, treat, and dispose of nuclear waste.

Since the end of the Cold War, key portions of the nuclear security 

enterprise’s weapons production infrastructure have aged and become 

outdated, prompting congressional and executive branch decision makers 

to call on DOE to develop plans to modernize this infrastructure.2 The 

Department of Defense’s (DOD) 2010 Nuclear Posture Review identified 

long-term modernization goals and requirements, including sustaining a 

safe, secure, and effective nuclear arsenal through increasing 

investments to rebuild and modernize the nation’s nuclear infrastructure, 

some of which dates back to the 1940s.3In fiscal year 2011, the 

 

1NNSA is a separately organized agency within the Department of Energy. It was created 

under Title 32 of the National Defense Authorization Act for Fiscal Year 2000, Pub. L. No. 

106-65, § 3201 et seq.

2The end of the Cold War caused a dramatic shift in how the nation maintains nuclear 

weapons. Instead of designing, testing, and producing new nuclear weapons, the strategy 

shifted to maintaining the existing nuclear weapons stockpile indefinitely. Life extension 

programs increase, through refurbishment, the operational lives of weapons in the nuclear 

stockpile by 20 to 30 years and certify these weapons’ military performance requirements 

without conducting underground nuclear testing.

3Department of Defense, Nuclear Posture Review Report (Washington, D.C.: Apr. 6, 

2010). The 2010 Nuclear Posture Review establishes the nation’s nuclear weapons 

requirements and policy.
Letter

administration pledged over $88 billion to NNSA over 10 years for 

operations and modernization, including the refurbishment of weapons in 

the current stockpile and the construction of facilities to support these 

refurbishments. In January 2017, the President directed the Secretary of 

Defense to initiate a new Nuclear Posture Review to ensure that the 

United States nuclear deterrent is modern, robust, flexible, resilient, 

ready, and appropriately tailored to deter 21st-century threats and 

reassure our allies.

To support its modernization and cleanup missions, DOE relies primarily 

on contractors to carry out its programs. DOE is the largest civilian 

contracting agency in the federal government and spends approximately 

90 percent of its $32 billion in funding (in fiscal year 2017) on contracts 

and large capital asset projects. We designated DOE’s contract 

management—which has included both contract administration and 

project management—as a high-risk area in 1990 because DOE’s record 

of inadequate management and oversight of contractors had left it 

vulnerable to fraud, waste, abuse, and mismanagement.

Reports we have issued over the past several years have highlighted 

various challenges that NNSA and EM continue to face in carrying out 

their mission-related responsibilities, including challenges in contract and 

project management that relate to NNSA’s modernization activities and 

EM’s cleanup efforts. In our 2017 high-risk update, we reported that 

NNSA and EM continued to demonstrate a strong commitment and top 

leadership support to improve contract and project management—a key 

criterion for removing agencies and program areas from our High-Risk 

List.

Page 2 GAO-17-651T Department Of Energy

4 However, we also found that DOE still needs to make more 

progress on the other four criteria for removal: organizational capacity, 

corrective action planning, monitoring effectiveness, and demonstrating 

progress. Our high-risk update also noted that NNSA and EM continued 

to struggle to stay within cost and schedule estimates for some of their 

major projects.

As NNSA works to modernize the nuclear security enterprise, EM must 

address the legacy of 70 years of nuclear weapons production and 

 

4GAO, High-Risk Series: Progress on Many High-Risk Areas, While Substantial Efforts 

Needed on Others, GAO-17-317 (Washington, D.C.: Feb. 15, 2017). GAO’s high-risk 

program identifies government operations with greater vulnerabilities to fraud, waste, 

abuse, and mismanagement or the need for transformation to address economy, 

efficiency, or effectiveness challenges.
Letter

energy research by DOE and its predecessor agencies. These activities 

generated large amounts of radioactive waste, spent nuclear fuel, excess 

plutonium and uranium, and contaminated soil and groundwater. They 

also resulted in thousands of contaminated facilities, including land, 

buildings, and other structures and their systems and equipment. Various 

federal laws, agreements with states, and court decisions require the 

federal government to clean up environmental hazards at federal sites 

and facilities—such as nuclear weapons production facilities. DOE’s 

approaches to addressing its environmental liabilities and cleaning up the 

contamination from past activities are often influenced by numerous sitespecific factors, stakeholder agreements, and legal provisions. For years, 

we and others have reported on shortcomings in DOE’s approach to 

addressing its environmental responsibilities, including incomplete data 

on the extent of cleanup needed, and in 2017 we added federal 

environmental liabilities to our High-Risk List—over 80 percent of these 

liabilities are DOE’s responsibility.

Page 3 GAO-17-651T Department Of Energy

5

In our 2017 high-risk update, we 

reported that because of incomplete information and often inconsistent 

approaches to making cleanup decisions, DOE does not always approach 

environmental cleanup using a risk-informed approach to reduce health 

and safety risks in a cost effective manner.

My testimony today discusses (1) challenges related to the affordability of 

NNSA’s nuclear modernization programs, (2) the status of DOE’s efforts 

to improve its management of contracts and projects, (3) challenges in 

addressing DOE’s environmental liabilities, and (4) challenges facing 

NNSA’s nonproliferation programs. My statement is based primarily on 

information from 13 GAO reports issued from May 2015 to May 2017 (see 

the end of the testimony for a list of related reports). For that work, we 

reviewed agency documents and interviewed agency officials, among 

other things. Detailed information about the scope and methodology we 

used to conduct our prior work can be found in each of our issued reports. 

The work upon which this testimony is based was conducted 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 

conclusions based on our audit objectives.

 

5GAO-17-317. 
Letter

Misalignment between NNSA’s Modernization 

Page 4 GAO-17-651T Department Of Energy

Budget Estimates and Plans Raises 

Affordability Concerns

In April 2017, we issued our latest report on NNSA’s 25-year plans to 

modernize the nation’s nuclear weapons stockpile and its supporting 

infrastructure.6In this report, we identified two areas of misalignment 

between NNSA’s modernization plans and the estimated budgetary 

resources needed to carry out those plans, which could result in 

challenges to NNSA in affording its planned portfolio of modernization 

programs. First, we found that NNSA’s estimates of funding needed for its 

modernization plans sometimes exceeded the budgetary projections 

included in the President’s planned near- and long-term modernization 

budgets. In the near-term (fiscal years 2018 through 2021), we found that 

NNSA may have to defer certain modernization work beyond that time 

period in order to execute its program within the planned budget, which 

could increase modernization costs and schedule risks. This is a pattern 

we have previously identified as a “bow wave”—an increase in future 

years’ estimated budget needs that occurs when agencies are 

undertaking more programs than their resources can support. In the longterm (fiscal years 2022 through 2026), we found that NNSA’s 

modernization program budget estimates sometimes exceeded the 

projected budgetary resources planned for inclusion in the President’s 

budget, raising additional questions about whether NNSA will be able to 

afford the scope of its modernization program. Second, the costs of some 

major modernization programs—such as for nuclear weapon 

refurbishments—may also increase and further strain future 

modernization budgets.

Misalignment between Estimates and Plans May Result in 

Increased Cost and Schedule Risks and Raises 

Affordability Concerns

As we reported in April 2017, NNSA estimates of funding needed for its 

modernization plans sometimes exceeded the budgetary projections 

 

6GAO, National Nuclear Security Administration: Action Needed to Address Affordability of 

Nuclear Modernization Programs, GAO-17-341 (Washington, D.C.: Apr. 26, 2017).
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included in the President’s planned near- and long-term modernization 

budgets.

Near-term Misalignment between Modernization Plans and 

Page 5 GAO-17-651T Department Of Energy

Estimated Budgetary Resources

We found that NNSA may have to defer certain modernization work 

planned for fiscal years 2018 through 2021 beyond its current 5-year 

planning period, called the Future-Years Nuclear Security Program 

(FYNSP). As we reported in April 2017, this is caused by a misalignment 

between NNSA’s budget estimates for certain nuclear modernization 

programs and the President’s budgets for that period.7 We concluded that 

this deferral could exacerbate a significant bow wave of modernization 

funding needs that NNSA projects for the out-years beyond the FYNSP 

and could potentially increase modernization costs and schedule risks. As 

we have previously reported, such bow waves occur when agencies defer 

costs of their programs to the future, beyond their programming periods, 

and they often occur when agencies are undertaking more programs than 

their resources can support.8 As NNSA’s fiscal year 2017 budget 

materials show, its modernization budget estimates for fiscal years 2022 

through 2026—the first 5 years beyond the FYNSP—may require 

significant funding increases. For example, in fiscal year 2022, NNSA’s 

estimates of its modernization budget needs are projected to rise about 7 

percent compared with the budget estimates for fiscal year 2021, the last 

year of the FYNSP, as shown in figure 1.

 

7Two key documents, updated annually, describe NNSA’s operations, modernization 

plans, and budget estimates for implementing these plans; these documents comprise 

NNSA’s nuclear security budget materials. First, the Stockpile Stewardship and 

Management Plan (the plan) is NNSA’s formal means of communicating to Congress 

information on modernization and operations plans and budget estimates over the next 25 

years. Second, NNSA’s annual justification of the President’s budget provides program 

information and budget estimates for the next 5 years. This 5-year plan is called the 

Future-Years Nuclear Security Program (FYNSP), and the budget estimates in this plan 

reflect funding levels approved by the Office of Management and Budget (OMB). The 

budget estimates for years included in the FYNSP must align with the 5-year overall 

federal budget estimates in the President’s budget. The budget estimates for years 

beyond the FYNSP are not subject to this requirement.

8GAO, Orion Multi-Purpose Crew Vehicle: Action Needed to Improve Visibility into Cost, 

Schedule, and Capacity to Resolve Technical Challenges, GAO-16-620 (Washington, 

D.C.: Jul. 27, 2016) and Weapon System Acquisitions: Opportunities Exist to Improve the 

Department of Defense’s Portfolio Management, GAO-15-466 (Washington, D.C.: Aug. 

27, 2015). 
Letter

Figure 1: Comparison of the National Nuclear Security Administration’s Fiscal Year 

Page 6 GAO-17-651T Department Of Energy

2017 Budget Estimates for the Future-Years Nuclear Security Program and 5 Years 

Beyond

Note: Amounts are presented in nominal dollars, which are not adjusted for the effects of inflation.

Data Table for Figure 1: Comparison of the National Nuclear Security 

Administration’s Fiscal Year 2017 Budget Estimates for the Future-Years Nuclear 

Security Program and 5 Years Beyond (Dollars in billions)

Fiscal year Budget estimates

2017 9.2

2018 9.7

2019 9.9

2020 10.1

2021 10.5

2022 11.3

2023 11.5

2024 11.7

2025 11.9

2026 12.1
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The analysis in our April 2017 report showed that NNSA has shifted this 

modernization bow wave to the period beyond the FYNSP time frame in 

each of the past four versions of the annual Stockpile Stewardship and 

Management Plan. For example, in the Fiscal Year 2014 Stockpile 

Stewardship and Management Plan, NNSA’s budget estimates for its 

modernization programs increased from a total of about $9.3 billion in 

fiscal year 2018, the last year of the FYNSP, to about $10.5 billion in 

fiscal year 2019, the first year after the FYNSP—an increase of about 13 

percent. Similar patterns showing a jump in funding needs immediately 

after the last year of the FYNSP are repeated in the funding profiles 

contained in the fiscal year 2015, 2016, and 2017 plans. As we have 

previously reported, deferring more work to future years can increase cost 

and schedule risks and can put programs in the position of potentially 

facing a backlog of deferred work that grows beyond what can be 

accommodated in future years.

Long-term Misalignment between Modernization Plans and 

Page 7 GAO-17-651T Department Of Energy

Estimated Budgetary Resources

The Fiscal Year 2017 Stockpile Stewardship and Management Plan

shows that NNSA’s overall modernization budget estimates for fiscal 

years 2022 through 2026—the out-years beyond the FYNSP—may 

exceed the projected funding levels in the President’s budgets for that 

time period, raising further questions about the affordability of NNSA’s 

nuclear modernization plans. According to NNSA’s data, the agency’s 

estimated budget needed to support modernization totals about $58.4 

billion for fiscal years 2022 through 2026, and the out-year funding 

projections contained in the President’s fiscal year 2017 budget for the 

same period total about $55.5 billion. The President’s out-year funding 

projections, therefore, are approximately $2.9 billion, or about 5.2 

percent, less than NNSA estimates it will need over the same time period.

Despite this potential shortfall, NNSA’s Fiscal Year 2017 Stockpile 

Stewardship and Management Plan concludes that the modernization 

program is generally affordable in the years beyond the FYNSP for two 

reasons. First, the President’s out-year funding projections are sufficient 

to support NNSA’s low-range cost estimates for its modernization 

programs for fiscal years 2022 through 2026. Based on NNSA data, the 

low-range cost estimates for fiscal years 2022 through 2026 total 

approximately $54.4 billion and the President’s out-year funding 

projections total about $55.5 billion. Figure 2 illustrates data from the 

2017 plan showing NNSA’s nominal budget estimates, including highand low-range cost estimates for its modernization program, along with 
Letter

the out-year funding projections from the President’s fiscal year 2017 

budget, for fiscal years 2022 to 2026. Second, NNSA concludes that its 

modernization programs are generally affordable beyond the FYNSP 

because the agency’s estimated modernization budget needs will begin to 

decrease in fiscal year 2027.

Figure 2: Comparison of the Fiscal Year 2017 Stockpile Stewardship and 

Page 8 GAO-17-651T Department Of Energy

Management Plan’s Budget Estimates and High- and Low-Range Cost Estimates 

with the President’s Fiscal Year 2017 Out-Year Budget Projections, Fiscal Years 

2022 through 2026
Letter

Figure 2: Comparison of the Fiscal Year 2017 Stockpile Stewardship and 

Page 9 GAO-17-651T Department Of Energy

Management Plan’s Budget Estimates and High- and Low-Range Cost Estimates 

with the President’s Fiscal Year 2017 Out-Year Budget Projections, Fiscal Years 

2022 through 2026 (dollars in billions)

Fiscal Year Fiscal Year 2017 

Stockpile 

Stewardship and 

Management Plan

estimates

President's fiscal 

year 2017 out-year 

budget projections

High 

estimate

Low 

estimate

2022 11.3 10.7 12.4 10.5

2023 11.5 10.9 12.6 10.6

2024 11.7 11.1 12.9 10.8

2025 11.9 11.3 13.0 11.2

2026 12.1 11.5 13.2 11.2

Note: Amounts are presented in nominal dollars, which are not adjusted for the effects of inflation.

In our April 2017 report, we noted that NNSA’s conclusion—that its 

modernization program is affordable because the President’s out-year 

funding projections fall within NNSA’s modernization cost ranges—is 

overly optimistic. This is because NNSA’s conclusion is predicated on 

optimistic assumptions regarding the cost of the modernization program 

beyond the FYNSP, particularly for fiscal years 2022 through 2026. For 

the program to be affordable, NNSA’s modernization programs would 

need to be collectively executed at the low end of their estimated cost 

ranges. The plan does not discuss any options NNSA would pursue to 

support or modify its modernization program if costs exceeded its lowrange cost estimates. In addition, the Fiscal Year 2017 Stockpile 

Stewardship and Management Plan states that the nominal cost of 

NNSA’s modernization program is expected to decrease by 

approximately $1 billion in fiscal year 2027. In that year, according to the 

2017 plan, it is anticipated that NNSA’s estimated budgets for its 

modernization program will begin to fall in line with projections of future 

presidential budgets. However, as we noted in our April 2017 report, the 

decrease that NNSA anticipates in its modernization funding needs 

beginning in fiscal year 2027 may not be achievable if the projected 

mismatch between NNSA’s estimates of its modernization budget needs 

and the projections of the President’s modernization budget for fiscal 

years 2022 through 2026 is not resolved. This mismatch creates 

concerns that NNSA will not be able to afford planned modernization 

costs during fiscal years 2022 through 2026 and will be forced to defer 

them to fiscal year 2027 and beyond, continuing the bow wave patterns 

discussed above.
Letter

Potential Rising Costs of Some Modernization Programs 

Page 10 GAO-17-651T Department Of Energy

May Further Strain NNSA’s Modernization Budgets

Our April 2017 report identified misalignment between NNSA’s estimate 

of its budget needs and NNSA’s internal cost range estimates for several 

of its major modernization programs. Further, we found that the costs of 

some major life extension programs (LEPs) may increase in the future, 

which may further strain NNSA’s planned modernization budgets.

With respect to the alignment of NNSA’s estimate of its budget needs and 

NNSA’s internal cost range estimates, we found that NNSA’s budget 

estimates were generally consistent with NNSA’s high- and low-range 

cost estimates.9 However, for some years, NNSA’s low-range cost 

estimates exceeded the budget estimates for some of the programs, 

suggesting the potential for a funding shortfall for those programs in those 

years. Specifically, we found that the low-range cost estimates for the 

W88 Alteration 370 program and all LEPs discussed in our April 2017 

report exceeded their budget estimates for some fiscal years within the 

10-year time period from fiscal year 2017 to 2026.10 As we reported in the 

2013 and 2016, this misalignment indicates that NNSA’s estimated 

budgets may not be sufficient to fully execute program plans and that 

NNSA may need to increase funding for these programs in the future.11

 

9According to NNSA officials, two approaches are used to estimate the costs of the LEPs, 

except for the W76-1. Under the first approach, according to officials, NNSA develops 

specific budget estimates by year through a “bottom-up” process. NNSA officials 

described this as a detailed approach to developing the LEP budget estimates that, 

among other things, integrates resource and schedule information from site participants. 

Under the second approach, which NNSA refers to as a “top-down” process, NNSA uses 

historical LEP cost data and complexity factors to project high and low cost ranges for 

each LEP distributed over the life of the program using an accepted cost distribution 

method. According to NNSA, the W76-1 LEP, which is the only weapon program that has 

been through the development phase and the majority of the production phase, is used as 

the primary basis for modeling cost ranges for all future LEPs. NNSA does not prepare 

high- and low-range cost estimates for it. Officials noted that the values in these cost 

ranges reflect idealized funding profiles and do not account for the actual detailed 

schedule of program activities, planning for risk in the project, or the results of execution to 

date.

10See GAO-17-341 for greater detail on these and other examples.

11GAO, Modernizing the Nuclear Security Enterprise: NNSA’s Budget Estimates 

Increased but May Not Align with All Anticipated Costs, GAO-16-290 (Washington, D.C.: 

Mar. 4, 2016) and Modernizing the Nuclear Security Enterprise: NNSA’s Budget Estimates 

Do Not Fully Align with Plans, GAO-14-45 (Washington, D.C.: Dec. 11, 2013).
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Additionally, we found that the costs of two ongoing nuclear weapon 

LEPs and the W88 Alteration 370 program may increase in the future, 

based on NNSA information that was produced after the release of the 

fiscal year 2017 budget materials.

Page 11 GAO-17-651T Department Of Energy

12 These potential cost increases could 

further challenge the extent to which NNSA’s budget estimates support 

the scope of modernization efforts. The LEPs facing potential cost 

increases include:

· B61-12 LEP. An independent cost estimate for the program 

completed in October 2016 exceeded the program’s self-conducted 

cost estimate (conducted in June 2016) by $2.6 billion. We are 

conducting ongoing work to determine how NNSA has, if at all, 

reconciled this difference.

· W80-4 LEP. Officials from NNSA’s Office of Cost Policy and Analysis 

told us that this program may be underfunded by at least $1 billion to 

meet the program’s existing schedule.

· W88 Alteration 370. According to officials from NNSA’s Office of Cost 

Policy and Analysis, this program’s expanded scope of work may 

result in about $1 billion in additional costs.

To help NNSA put forth more credible modernization plans, we 

recommended in our April 2017 report that the NNSA Administrator 

include an assessment of the affordability of NNSA’s portfolio of 

modernization programs in future versions of the Stockpile Stewardship 

and Management Plan, such as by presenting options (e.g., potentially 

deferring the start of or canceling specific modernization programs) that 

NNSA could consider taking to bring its estimates of modernization 

funding needs into alignment with potential future budgets. In commenting 

on our report, NNSA neither agreed nor disagreed with our 

recommendation.

 

12NNSA’s fiscal year 2017 budget materials include two key documents: the Fiscal Year 

2017 Stockpile Stewardship and Management Plan, which was issued in March 2016, and 

the agency’s annual justification of the President’s budget, which was issued in February 

2016.
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DOE Has Taken Steps to Improve Contract and 

Page 12 GAO-17-651T Department Of Energy

Project Management, but Challenges Persist, 

Particularly in Contract Management

The Secretary of Energy has taken several important steps that 

demonstrate DOE’s commitment to improving contract and project 

management. In our recent reports, we have noted progress as DOE has 

developed and implemented corrective actions to identify and address 

root causes of persistent project management challenges, as well as 

progress in the department’s monitoring of the effectiveness and 

sustainability of corrective actions. However, DOE’s recent efforts have 

not fully addressed several areas where the department continues to 

have shortcomings.

DOE Has Made Progress in Contract and Project 

Management

As we noted in our 2017 high risk report, DOE has taken several 

important steps that demonstrate its commitment to improving project 

management—steps that have been supported by senior leadership 

within the department.13 Specifically, based in part on our December 2014 

recommendation,14 DOE issued a revised project management order, 

DOE Order 413.3B, in May 2016 and added the following requirements 

for its program offices:

· Develop cost estimates in accordance with industry best practices.

· Conduct analyses of alternatives for projects consistent with industry 

best practices and independent of the contractor organization 

responsible for managing the construction or constructing a capital 

asset project.

· Ensure that major projects’ designs and technologies are sufficiently 

mature before contractors are allowed to begin construction.

· Conduct a root cause analysis if a major project is expected to exceed 

its approved cost or schedule.

 

13GAO-17-317.

14GAO, DOE and NNSA Project Management: Analysis of Alternatives Could Be 

Improved by Incorporating Best Practices, GAO-15-37 (Washington, D.C.: Dec. 11, 2014).
Letter

DOE also made significant efforts to monitor the effectiveness and 

sustainability of corrective actions address project management 

challenges. For example, the Secretary strengthened the Energy 

Systems Acquisition Advisory Board by changing it from an ad hoc body 

to an institutionalized board responsible for reviewing all capital asset 

projects with a total project cost of $100 million or more. The Secretary 

also created the Project Management Risk Committee, which includes 

senior DOE officials and is chaired by a new departmental position—the 

Chief Risk Officer. The committee is chartered to assess the risks of 

projects across DOE and advise DOE senior leaders on cost, schedule, 

and technical issues for projects.

Page 13 GAO-17-651T Department Of Energy

15

Although DOE has taken these important actions, it is too early to tell 

whether front-end planning problems persist. DOE has previously 

acknowledged its longstanding problems with front-end planning, stating 

that insufficient front-end planning has consistently contributed to DOE 

projects not finishing on budget or schedule. Our recent work also 

indicates that continued senior-level attention on front-end planning may 

be warranted.

· In August 2016, we found problems with DOE’s front-end project 

planning at the Waste Isolation Pilot Plant (WIPP) for the new 

permanent ventilation system.16 This system is being built to enable 

DOE to resume full operations of the geological nuclear waste 

repository, which were suspended after a radiological release 

accident in February 2014. DOE did not follow all best practices in 

analyzing and selecting an alternative for the new ventilation system 

at WIPP, which DOE estimated will cost between $270 million and 

$398 million to build and will be completed by the end of March 2021. 

For example, DOE did not select the preferred alternative based on 

 

15As we stated in our 2017 High Risk List update, additional time is needed for us to 

assess how effectively these recent monitoring improvements will validate the 

sustainability of corrective measures. We have not yet evaluated the operations of the 

newly created Project Management Risk Committee. In addition, DOE’s new oversight 

and monitoring efforts are not comprehensive, as certain activities within EM are not 

subject to review by the committee, even though together they cost billions of dollars and 

last for numerous years. Finally, the effectiveness of DOE’s monitoring of its contracts, 

projects, and programs depends upon the availability of reliable enterprise-wide cost 

information on which to base oversight activities. See: GAO-17-317.

16GAO, Nuclear Waste: Waste Isolation Pilot Plant Recovery Demonstrates Cost and 

Schedule Requirements Needed for DOE Cleanup Operations, GAO-16-608 (Washington, 

D.C.: Aug. 4, 2016).
Letter

assessing the difference between the life-cycle costs and benefits of 

each alternative, as called for by best practices and now required by 

DOE’s revised project management order. We recommended that 

DOE require projects, including the WIPP ventilation system, to 

implement recommendations from independent analysis of 

alternatives reviews or document the reasons for not doing so. DOE 

concurred with the recommendation and planned to incorporate 

guidance in its updated project review guide on how DOE offices 

should address recommendations from independent reviews.

· In August 2016, we found that DOE did not follow project 

management requirements in its front-end planning for an alternative 

to the Chemistry and Metallurgy Research Replacement (CMRR) 

project.

Page 14 GAO-17-651T Department Of Energy

17 After spending $450 million designing the project, NNSA 

reversed its decision to build a large nuclear facility because of 

projected excessive cost growth. Instead, NNSA revised the CMRR 

project to use existing and smaller new facilities. We found that NNSA 

did not define key parameters for one aspect of the new project, 

including the capacity for analyzing plutonium that the project should 

provide, as directed by NNSA policy. We made several 

recommendations, including that NNSA identify the capacity for 

analyzing plutonium for the revised CMRR project. NNSA neither 

agreed nor disagreed with the recommendations.

Areas Where Challenges Continue to Persist

DOE’s recent efforts do not address several areas where it continues to 

have shortcomings including (1) acquisition planning for its major 

contracts, (2) the quality of enterprise-wide cost information available to 

DOE managers and key stakeholders, (3) DOE’s need for a program 

management policy, (4) how DOE’s new project management 

requirements will be applied to its major legacy projects, and (5) 

whistleblower protections.

Acquisition Planning for Major Contracts

During the acquisition planning phase for contracts, critical contract 

decisions are made that have significant implications for the cost and 

overall success of an acquisition. In August 2016, we examined DOE’s 

 

17GAO, DOE Project Management: NNSA Needs to Clarify Requirements for Its 

Plutonium Analysis Project at Los Alamos, GAO-16-585 (Washington, D.C.: Aug. 9, 2016).
Letter

use of management and operating (M&O) contracts.

Page 15 GAO-17-651T Department Of Energy

18 We found that DOE 

did not consider acquisition alternatives beyond continuing its 

longstanding M&O contract approach for 16 of its 22 M&O contracts. We 

concluded that without considering broader alternatives in the acquisition 

planning phase, DOE cannot ensure that it is selecting the most effective 

scope and form of contract, raising risks for both contract cost and 

performance.

The size and duration of DOE’s M&O contracts—22 M&O contracts with 

an average potential duration of 17 years, representing almost threequarters of DOE’s spending in fiscal year 2015—underscore the 

importance of planning for every M&O acquisition. According to DOE 

officials, one of the primary reasons DOE uses this type of contract is 

because it is less burdensome to manage. According to DOE officials, 

such contracts are easier to manage with fewer DOE personnel because 

they are less frequently competed and have broadly written scopes of 

work, among other attributes. Moreover, a 2013 study found that, on 

average, each NNSA M&O procurement employee was associated with 

about $287 million in contract spending, compared with a federal 

government average of $9 million per procurement employee. We made 

two recommendations in that report, including that DOE establish a 

process to analyze and apply its experience with contracting alternatives. 

DOE generally concurred with our recommendations.

Quality of Enterprise-Wide Information

The effectiveness of DOE’s monitoring of its contracts, projects, and 

programs depends upon the availability of reliable enterprise-wide 

information on which to base oversight activities. For example, reliable 

enterprise-wide cost information is needed to identify the cost of activities, 

ensure the validity of cost estimates, and provide information to Congress 

to make budgetary decisions. However, meaningful cost analyses across 

programs, contractors, and sites are not possible because NNSA’s 

contractors use different methods of accounting for and tracking costs. 

NNSA developed a plan to improve and integrate its cost reporting 

structures; however, we found in our January 2017 report that this plan 

 

18GAO, Department of Energy: Actions Needed to Strengthen Acquisition Planning for 

Management and Operating Contracts, GAO-16-529 (Washington, D.C.: Aug. 9, 2016).
Letter

did not provide a useful road map for guiding NNSA’s effort.

Page 16 GAO-17-651T Department Of Energy

19 For 

example, NNSA did not define strategies and identify resources needed 

to achieve its goals, which is a leading practice for strategic planning. 

NNSA’s plan contained few details on the elements it must include, such 

as its feasibility assessment, estimated costs, expected results, and an 

implementation timeline. We concluded that, until a plan is in place that 

incorporates leading strategic planning practices, NNSA cannot be 

assured that its efforts will result in a cost collection tool that produces 

reliable enterprise-wide cost information that satisfies the information 

needs of Congress and program managers. We recommended that 

NNSA develop a plan for producing cost information that fully 

incorporates leading planning practices. NNSA agreed with our 

recommendation.

In addition, quality data is needed for DOE to manage its risk of fraud. 

The Fraud Reduction and Data Analytics Act of 2015 establishes 

requirements aimed at improving federal agencies’ controls and 

procedures for assessing and mitigating fraud risks through the use of 

data analytics. In our March 2017 report, however, we found that because 

DOE does not require its contractors to maintain sufficiently detailed 

transaction-level cost data that are reconcilable with amounts charged to 

DOE, it is not well positioned to employ data analytics as a fraud 

detection tool.20 The data were not suitable either because they were not 

for a complete universe of transactions that was reconcilable with 

amounts billed to DOE or because they were not sufficiently detailed to 

determine the nature of costs charged to DOE. We concluded that, 

without requiring contractors to maintain such data, DOE will not be well 

positioned to meet the requirements of the Fraud Reduction and Data 

Analytics Act of 2015 and manage its risk of fraud and other improper 

payments. We recommended that DOE require contractors to maintain 

sufficiently detailed transaction-level cost data that are reconcilable with 

amounts charged to the government. DOE did not concur with our 

recommendation. Specifically, DOE stated that the recommendation 

establishes agency-specific requirements for DOE contractors that are 

more prescriptive than current federal requirements and that its M&O 

contractors, not DOE, are responsible for performing data analytics and 

 

19GAO, National Nuclear Security Administration: A Plan Incorporating Leading Practices 

Is Needed to Guide Cost Reporting Improvement Effort, GAO-17-141 (Washington, D.C.: 

Jan. 19, 2017).

20GAO, Department of Energy: Use of Leading Practices Could Help Manage the Risk of 

Fraud and Other Improper Payments, GAO-17-235 (Washington, D.C.: Mar. 30, 2017).
Letter

determining what data are needed to do so. We are concerned that 

DOE’s response demonstrates that it does not fully appreciate its 

responsibility for overseeing contractor costs. We continue to believe that 

the use of data-analytic techniques by DOE employees could help 

mitigate some of the challenges that limit the effectiveness of DOE’s 

approach for overseeing M&O contractor costs. However, effectively 

applying data-analytics is dependent upon the availability of complete and 

sufficiently detailed contractor data. Therefore, we continue to believe that 

DOE needs to implement our recommendation and require contractors to 

maintain sufficiently detailed transaction-level cost data that are 

reconcilable with amounts charged to the government.

Program Management

Page 17 GAO-17-651T Department Of Energy

Program management can help ensure that a group of related projects 

and activities are managed in a coordinated way to obtain benefits not 

available from managing them individually. This approach helps federal 

agencies get what they need, at the right time, and at a reasonable price. 

However, in 2016 we found that DOE had not established a departmentwide program management policy and that DOE had not established a 

career development program for program managers. Specifically,

· In an August 2016 report examining NNSA’s plans to build the CMRR, 

we found that the agency had not clarified whether the project would 

satisfy the mission needs of other NNSA and DOE programs.21 NNSA 

might have been better able to clarify this project’s mission needs if 

DOE and NNSA had been operating under a DOE-wide program 

management policy incorporating leading practices. DOE and NNSA 

officials said they recognize the importance of establishing a program 

management policy, but at the time DOE had not done so. We 

recommended that DOE establish a program management policy that 

addresses internal control standards and leading practices. DOE 

provided no comments on our recommendation. After we issued our 

report, the President signed the 2016 Program Management 

Improvement Accountability Act, which requires the development of 

standards, policies, and guidelines for program and project 

management across the federal government. We will continue to 

monitor and report on the Act’s implementation as part of our biennial 

high risk updates, and we will also include an assessment of the 

 

21GAO-16-585.
Letter

effectiveness of the standards, policies, and guidelines that are to be 

developed.

· In a November 2016 report, we found that DOE and NNSA had not 

established training programs, such as a career development 

program, for program managers.

Page 18 GAO-17-651T Department Of Energy

22 Program managers are 

responsible for interacting with project managers to provide support 

and guidance on individual projects, but they also must take a broad 

view of program objectives and organizational culture. In contrast, 

DOE had established a training program for project managers, which 

DOE said was open to program managers. In the absence of a 

current DOE or NNSA training program for program managers, most 

of the NNSA program managers we interviewed did not have training 

related to program management. As a result, we concluded that 

NNSA may have difficulty developing and maintaining a cadre of 

professional, effective, and capable program managers. We 

recommended that DOE establish a training program for program 

managers.23 DOE provided no comments on this report.

Major Legacy Projects

DOE has instituted project management reforms that—if fully 

implemented—will help ensure that future projects are not affected by the 

challenges that have persisted for DOE’s major legacy projects. 

Specifically, DOE has taken action on certain major projects, but has not 

consistently applied these reforms, and in particular, DOE has not applied 

such reforms to its largest legacy cleanup project at its Hanford Site in 

Washington state. As we found in a May 2015 report, DOE continues to 

allow construction of certain Waste Treatment and Immobilization Plant 

(WTP) facilities at DOE’s Hanford Site before designs are 90 percent 

complete.24 This contrasts with DOE’s revised project management order 

that now requires a facility’s design to be at least 90 percent complete 

before establishing cost and schedule baselines and cost and schedule 

estimates that meet industry best practices. The WTP is DOE’s largest 

 

22GAO, Program Management: DOE Needs to Develop a Comprehensive Policy and 

Training Program, GAO-17-51. (Washington, D.C.: Nov. 21, 2016).

23As noted above, the Program Management Improvement Accountability Act may help 

NNSA address some of its challenges in program management.

24The WTP is DOE’s current planned approach to treating some of Hanford’s radioactive 

tank waste. See: GAO, Hanford Waste Treatment: DOE Needs to Evaluate Alternatives to

Recently Proposed Projects and Address Technical and Management Challenges, 

GAO-15-354 (Washington, D.C.: May 7, 2015).
Letter

project, and it has faced numerous technical and management challenges 

that have added decades to its schedule and billions of dollars to its cost. 

We recommended in May 2015 that DOE (1) consider whether to limit 

construction on the WTP until risk mitigation strategies are developed to 

address known technical challenges, and (2) determine the extent to 

which the quality problems exist, in accordance with its quality assurance 

policy, for the facilities’ systems that have not been reviewed to determine 

if additional vulnerabilities exist. However, as of September 2016, DOE 

has not yet implemented our recommendations. Notably, after we issued 

our report, DOE announced in December 2016 that the cost estimate for 

one portion of the WTP—the part needed to treat a fraction of the lowactivity waste—had increased to nearly $17 billion. This cost estimate 

does not include the costs for a majority of the WTP’s waste treatment 

scope, including high-level waste treatment. In light of longstanding 

challenges with major projects, such as with the WTP, we believe DOE 

must begin to apply project management reforms to the projects that 

need them the most.

Page 19 GAO-17-651T Department Of Energy

25

Whistleblower Protections

Having the right people and resources is necessary to mitigate risks, but it 

is not always sufficient to ensure that risks are identified and appropriately 

addressed. As we have previously reported, management must foster a 

culture in which staff are encouraged to identify risks and use their 

expertise to proactively mitigate them. In July 2016, we examined DOE’s 

effort to evaluate the environment for raising concerns without fear of 

reprisal.26 We found, among other things, that DOE used flawed and 

inconsistent methodologies to evaluate the environment for raising safety 

and other concerns and therefore could not reliably judge its openness or 

ensure that appropriate action was taken in response to evaluation 

results. We noted that several factors may limit the use and effectiveness 

of mechanisms for contractor employees to raise concerns and seek 

whistleblower protections. We also found that DOE infrequently used its 

enforcement authority to hold contractors accountable for unlawful 

retaliation against whistleblowers, issuing just two violation notices in the 

past 20 years. Additionally, in 2013, DOE determined that it did not have 

 

25We have ongoing work examining the Mixed Oxide Fuel Fabrication Facility, the 

Uranium Processing Facility, and the Waste Treatment and Immobilization Plant.

26GAO, Department of Energy: Whistleblower Protections Need Strengthening, 

GAO-16-618 (Washington, D.C.: July 11, 2016).
Letter

the authority to enforce a key aspect of policies that prohibit retaliation for 

nuclear safety-related issues—despite having taken such enforcement 

actions in the past.

Page 20 GAO-17-651T Department Of Energy

27 In response to our recommendations, DOE has 

started the process of updating its Integrated Safety Management policies 

and guidance, but it is too early to tell whether the updated regulation will 

address the concerns we raised in our July 2016 report.

DOE Annually Spends Billions on 

Environmental Cleanup, but the Cost of Its 

Liabilities Continues to Increase

DOE also faces challenges with addressing its environmental liabilities. In 

February 2017, we added the federal government’s environmental 

liabilities to our High-Risk List. Specifically, we found that the federal 

government’s environmental liability has been growing for the past 20 

years—and is likely to continue to increase—and that DOE is responsible 

for over 80 percent ($372 billion) of the nearly $450 billion reported 

environmental liability.28 Notably, this estimate does not reflect all of the 

future cleanup responsibilities that DOE may face. In addition, DOE has 

not consistently taken a risk-informed approach to decision-making for 

environmental cleanup, and DOE may therefore be missing opportunities 

to reduce costs while also reducing environmental risks more quickly. Our 

 

27We made several recommendations, including that DOE independently assess the 

environment for raising concerns, evaluate whether the whistleblower pilot program will 

mitigate challenges with the existing program, expedite time frames for clarifying 

regulations, and clarify policies to hold contractors accountable. DOE concurred with most 

of these recommendations. In December 2016, DOE issued a rule to change DOE’s 

nuclear safety rules to clarify its authority to assess civil penalties against certain 

contractors and subcontractors for violating the prohibition against retaliating against 

whistleblowers. In addition, In September 2016, DOE updated its Order 221.1B that 

establishes the requirements and responsibilities for reporting fraud, waste, and abuse.

The revised order provides some additional specificity to its Office of Inspector General’s 

role in processing employee allegations and provides additional language intended to 

prohibit contractors from deterring or dissuading employees from reporting concerns.

28The majority of DOE’s annual environmental cleanup funding—over 80 percent in fiscal 

year 2016—comes from annual defense authorization spending.
Letter

recent work in this area has also identified opportunities where DOE may 

be able to save tens of billions of dollars. 

Page 21 GAO-17-651T Department Of Energy

29

DOE’s total reported environmental liability has generally increased over 

time. Since 1989, EM has spent over $164 billion to retrieve, treat, and 

dispose of nuclear and hazardous waste and to date has completed 

cleanup at 91 of 107 sites across the country (the 91 sites were generally 

viewed by DOE as the smallest and least contaminated sites to address). 

Despite billions spent on environmental cleanup, DOE’s environmental 

liability has roughly doubled from a low of $176 billion in fiscal year 1997 

to the fiscal year 2016 estimate of $372 billion. In the last 6 years alone, 

EM has spent $35 billion, primarily to treat and dispose of nuclear and 

hazardous waste and construct capital asset projects to treat the waste 

(see figure 3 for EM’s annual spending and growing environmental 

liability). According to documents related to DOE’s fiscal year 2016 

financial statements, 50 percent of DOE’s environmental liability resides 

at two cleanup sites: the Hanford Site in Washington State and the 

Savannah River Site in South Carolina.

 

29Federal accounting standards require agencies responsible for cleaning up 

contamination to estimate future cleanup and waste disposal costs and to report such 

costs in their annual financial statements as environmental liabilities. Per federal 

accounting standards, federal agencies’ environmental liability estimates are to include 

probable and reasonably estimable costs of cleanup work. 
Letter

Figure 3: Department of Energy’s Office of Environmental Management’s Annual 

Page 22 GAO-17-651T Department Of Energy

Spending and Growing Environmental Liability

Data Table for Figure 3: Department of Energy’s Office of Environmental 

Management’s Annual Spending and Growing Environmental Liability (dollars in 

billions)

Fiscal year Annual EM 

spending

Cumulative EM 

spending

Cumulative 

minus annual

Reported EM 

environmental 

liability

2011 $5.7 5.7 0 -163

2012 $5.7 11.4 5.7 -175

2013 $5.7 17.1 11.4 -181

2014 $5.8 22.9 17.1 -204

2015 $5.9 28.8 22.9 -240

2016 $6.2 35 28.8 -257

Note: EM is the organization within the Department of Energy responsible for managing 

environmental cleanup and is responsible for cleaning up 107 sites across the country. To date, EM 

has completed cleanup at 91 of these sites. EM spending includes money to treat and dispose of 

nuclear and hazardous waste and to construct capital asset projects to treat the waste. We did not 

adjust environmental liability estimates for inflation because information about the amount of the 

liability applicable to each future fiscal year was not available.
Letter

In its fiscal year 2016 financial statement, DOE attributed recent 

environmental liability increases to (1) inflation adjustments for the current 

year; (2) improved and updated estimates for the same scope of work, 

including changes resulting from deferral or acceleration of work; (3) 

revisions in technical approach or scope for cleanup activities; and (4) 

regulatory and legal changes. Notably, in recent annual financial reports, 

DOE has cited other significant causes for increases in its liability. Other 

causes have included the lack of a disposal path for high-level radioactive 

waste—because of the termination of the Yucca Mountain repository 

program —and delays and scope changes for major construction projects 

at the Hanford and Savannah River sites.

Page 23 GAO-17-651T Department Of Energy

30

We also reported in February 2017 that DOE’s estimated liability does not 

include billions in expected costs.31 According to federal accounting 

standards, environmental liability estimates should include costs that are 

probable and reasonably estimable, meaning that costs that cannot yet 

be reasonably estimated should not be included in total environmental 

liability.32 Examples of costs that DOE cannot yet estimate include the 

following:

· DOE has not yet developed a cleanup plan or cost estimate for the 

Nevada National Security Site and, as a result, the cost of future 

cleanup of this site was not included in DOE’s fiscal year 2015 

reported environmental liability. The nearly 1,400-square-mile site has 

been used for hundreds of nuclear weapons tests since 1951. These 

activities have resulted in more than 45 million cubic feet of 

radioactive waste at the site. According to DOE’s financial statement, 

since DOE is not yet required to establish a plan to clean up the site, 

 

30In June 2008, DOE submitted a license application to the NRC seeking authorization to 

construct a high-level nuclear waste repository at Yucca Mountain. In the application, DOE 

stated that it planned to open the repository in 2017. DOE later delayed the date to 2020. 

In March 2009, however, the Secretary of Energy announced plans to terminate the Yucca 

Mountain repository program and instead study other nuclear waste options. The 

President’s fiscal year 2011 budget proposal, released in February 2010, proposed 

eliminating all funding for the Yucca Mountain repository program. For more information, 

see GAO, Commercial Nuclear Waste: Effects of a Termination of the Yucca Mountain 

Repository Program and Lessons Learned, GAO-11-229 (Washington, D.C.: Apr. 8, 

2011).

31GAO-17-317.

32Federal Accounting Standards Advisory Board, FASAB Handbook of Federal 

Accounting Standards and Other Pronouncements, as Amended (Washington, D.C.: June 

30, 2016).
Letter

the costs for this work are excluded from DOE’s annually reported 

environmental liability.

· DOE’s reported environmental liability includes an estimate for the 

cost of a permanent nuclear waste repository, but these estimates are 

highly uncertain and likely to increase. In March 2015, in response to 

the termination of the Yucca Mountain repository program, DOE 

proposed separate repositories for defense high-level and commercial 

waste. In January 2017, we reported that the cost estimate for DOE’s 

new approach excluded the costs and time frames for key activities.

Page 24 GAO-17-651T Department Of Energy

33

As a result, the full cost of these activities is likely billions of dollars 

more than what is reflected in DOE’s environmental liability. In our 

annual report on Fragmentation, Overlap, and Duplication in the 

federal government that we issued in May 2017, we reported that 

DOE may be able to save billions of dollars by reassessing the 

rationale for its March 2015 proposal.34 In April 2017, the House of 

Representatives Committee on Energy and Commerce disseminated 

a discussion draft of legislation that could result in renewed efforts to 

open the Yucca Mountain repository.35

In addition, DOE may have insufficient controls in place to accurately 

account for its environmental liabilities. In January 2017, the DOE 

Inspector General reported a significant deficiency in internal controls 

related to the reconciliation of environmental liabilities.

Moreover, DOE does not consistently take a risk-informed decisionmaking approach to its environmental cleanup mission to more efficiently 

use resources. As our and other organizations’ reports issued over the 

last 2 decades have found, DOE’s environmental cleanup decisions have 

not been risk-based, and there have been inconsistencies in the 

regulatory approaches followed at different sites. We and others have 

pointed out that DOE needs to take a nation-wide, risk-based approach to 

cleaning up these sites, which could reduce costs while also reducing 

environmental risks more quickly.

 

33GAO, Nuclear Waste: Benefits and Costs Should Be Better Understood Before DOE 

Commits to a Separate Repository for Defense Waste, GAO-17-174 (Washington, D.C.: 

Jan. 31, 2017).

34GAO, 2017 Annual Report: Additional Opportunities to Reduce Fragmentation, Overlap, 

and Duplication and Achieve Other Financial Benefits, GAO-17-491SP (Washington, D.C.: 

Apr. 26, 2017).

35Nuclear Waste Policy Amendments Act of 2017, H.R. ___, 115th Cong. (2017).
Letter

· In 2006, the National Research Council reported that the nation’s 

approach to cleaning up nuclear waste—primarily carried out by 

DOE—was complex, inconsistent, and not systematically risk-based.

Page 25 GAO-17-651T Department Of Energy

36

For example, the National Research Council noted that the current 

regulatory structure for low-activity waste is based primarily on the 

waste’s origins rather than on its actual radiological risks. The 

National Research Council concluded that by working with regulators, 

public authorities, and local citizens to implement risk-informed 

practices, waste cleanup efforts can be done more cost-effectively. 

The report also suggested that statutory changes were likely needed.

· In 2015, a review organized by the Consortium for Risk Evaluation 

with Stakeholder Participation reported that DOE was not optimally 

using available resources to reduce risk.37 According to the report, 

factors such as inconsistent regulatory approaches and certain 

requirements in federal facility agreements caused disproportionate 

resources to be directed at lower-priority risks. The report called for a 

more systematic effort to assess and rank risks within and among 

sites, including through headquarters guidance to sites, and to 

allocate federal taxpayer monies to remedy the highest priority risks 

through the most efficient means.

· In May 2017, we reported on DOE’s efforts to treat a significant 

portion of the tank waste at the Hanford Site.38 We found that DOE 

chose different approaches to treat the less radioactive portion of its 

tank waste—which DOE refers to as “low-activity waste” (LAW)—at 

the Hanford and Savannah River Sites. At the Savannah River Site, 

DOE has grouted about 4 million gallons of LAW since 2007. DOE 

plans to treat a portion of the Hanford Site’s LAW with vitrification, but 

it has not has not yet treated any of Hanford’s LAW and faces 

 

36National Research Council of the National Academies, Improving the Regulation and 

Management of Low-Activity Radioactive Wastes, (Washington, D.C.: National Academies 

Press, 2006).

37The Consortium for Risk Evaluation with Stakeholder Participation is a multi-university 

consortium organized in 1995 that provides several types of independent, multidisciplinary reviews of DOE documents, projects, and reports. See: Omnibus Risk Review 

Committee, A Review of the Use of Risk-Informed Management in the Cleanup Program 

for Former Defense Nuclear Sites (August 2015).

38About 90 percent of the waste at Hanford is considered to be low-activity, meaning that 

it is much less radioactive than high-level waste. See GAO, Nuclear Waste: Opportunities 

Exist to Reduce Risks and Costs by Evaluating Different Waste Treatment Approaches at 

Hanford, GAO-17-306 (Washington, D.C.: May 3, 2017).
Letter

significant unresolved technical challenges in doing so.

Page 26 GAO-17-651T Department Of Energy

39 In addition, 

we found that the best available information indicates that DOE’s 

estimated costs to grout LAW at the Savannah River Site are 

substantially lower than its estimated costs to vitrify LAW at Hanford, 

and DOE may be able to save tens of billions of dollars by 

reconsidering its waste treatment approach for a portion of the LAW at 

Hanford. Moreover, according to the 21 experts that attended our 

meeting convened by the National Academies of Sciences, 

Engineering, and Medicine, both vitrification and grout could 

effectively treat Hanford’s LAW. Experts at our meeting also stated 

that developing updated information on the effectiveness of treating a 

portion of Hanford’s waste, called supplemental LAW, with other 

methods, such as grout, may enable DOE to consider waste 

treatment approaches that would accelerate DOE’s tank waste 

treatment mission, thereby potentially reducing certain risks and 

lifecycle treatment costs. We recommended that DOE (1) develop 

updated information on the performance of treating supplemental 

LAW with alternate methods, such as grout, before it selects an 

approach for treating supplemental LAW; and (2) have an 

independent entity develop updated information on the lifecycle costs 

of treating Hanford’s supplemental LAW with alternate methods. DOE 

agreed with both recommendations.

Since 1994, we have made at least 28 recommendations related to 

addressing the federal government’s environmental liability and 4 

recommendations to Congress to consider changes to the laws governing 

cleanup activities. Of these, 13 recommendations remain unimplemented. 

If implemented, these steps would improve the completeness and 

reliability of the estimated costs of DOE’s future cleanup responsibilities 

and lead to more risk-based management of the cleanup work. We 

believe these recommendations are as relevant, if not more so, today.40

 

39Grout immobilizes waste in a concrete-like mixture. Vitrification immobilizes waste in 

glass.

40We have ongoing work examining the consistency of DOE’s compliance agreements, 

looking specifically at the extent to which milestones within select compliance agreements 

are tailored to the environmental and human health risks that DOE is faced with 

addressing and the extent to which DOE’s cleanup remedies are based on up-to-date 

assessments of conditions at sites and of DOE’s technical capabilities.
Letter

NNSA Faces Nonproliferation Performance and 

Page 27 GAO-17-651T Department Of Energy

Program Management Challenges

NNSA also faces challenges implementing its nonproliferation programs 

under its Office of Defense Nuclear Nonproliferation (DNN). Specifically, 

in recently completed reviews of DNN programs, we have identified 

several challenges NNSA faces in how it measures performance and 

conducts program management of these efforts.41

· As I testified last year,42 NNSA proposed in its fiscal year 2017 

congressional budget request to terminate its Mixed Oxide (MOX) 

Fuel Fabrication Facility, which has been under construction since 

2007 and for which NNSA has already spent approximately $4.6 

billion on design and construction.43 NNSA’s request stated that its 

MOX fuel approach for disposing of 34 tons of weapons-grade 

plutonium will be significantly more expensive than anticipated and 

will require approximately $800 million to $1 billion annually for 

decades. Instead, NNSA proposed to focus on a new alternative to 

dilute the surplus plutonium and dispose of the material in a geologic 

repository. We have ongoing work examining the MOX facility and the 

extent to which WIPP has sufficient capacity to dispose of this 

quantity of plutonium. Specifically, we are assessing the extent to 

which DOE’s revised $17.2 billion cost estimate for completing 

construction of the MOX facility, and the $56 billion revised life-cycle 

estimate for completing the Plutonium Disposition Program using the 

MOX approach, met cost-estimating best practices. In addition, we 

are examining the status of NNSA’s development of a life-cycle cost 

estimate for completing the Plutonium Disposition Program using the 

dilute and dispose approach. Our review will also assess the extent to 

which DOE has sufficient disposal space and statutory capacity at 

 

41We have ongoing work on DNN program management practices and policy. Under this 

review we have conducted a preliminary assessment of the extent to which four selected 

DNN programs have established cost and schedule estimates and are measuring 

performance against cost and schedule baselines.

42GAO, Department of Energy: Observations on Efforts by NNSA and The Office of 

Environmental Management to Manage and Oversee the Nuclear Security Enterprise, 

GAO-16-422T (Washington, D.C., Feb. 23, 2016). 

43The facility was to produce MOX fuel (i.e., a mix of plutonium and uranium oxides) for 

nuclear reactors.
Letter

WIPP to dispose of all defense transuranic waste, including the 

diluted plutonium resulting from the dilute and dispose approach.

· In June 2016, we found that the Nuclear Smuggling Detection and 

Deterrence (NSDD) program had developed a program plan, but that 

NSDD could not measure its progress towards activities and goals 

because its goals were not all measurable and performance 

measures were not aligned with its goals.

Page 28 GAO-17-651T Department Of Energy

44 Under this program, 

NSDD may not be able to determine when it has fully accomplished 

its mission and risks continuing to deploy equipment past the point of 

diminishing returns. NSDD also faces challenges in performing its 

work that are outside of its control, such as the changing conditions in 

partner countries from conflict or political upheaval. We recommended 

that NSDD develop a more detailed program plan that articulates 

when and how it will achieve its goals, including completing key 

activities such as the deployment of radiation detection equipment to 

partner countries and having these countries fully fund the 

sustainment and maintenance of this equipment. NNSA agreed with 

this recommendation.

· In February 2017, we found that NNSA was unable to demonstrate 

the full results of its research and development technology for 

preventing nuclear proliferation.45 Specifically, we reported that DNN’s 

Research and Development program does not consistently track and 

document projects that result in technologies being transitioned or 

deployed. Furthermore, we found that DNN’s Research and 

Development project performance is difficult to interpret because the 

program’s performance measures do not define criteria or provide 

context justifying how the program determined that it met its targets. 

This, in turn, could hinder users’ ability to determine the program’s 

progress. NNSA officials said that final project reports do not 

document their assessment of performance against baseline targets 

and that there is no common template for final project reports. We 

noted that documenting assessments that compare final project 

 

44GAO, Combating Nuclear Smuggling: NNSA’s Detection and Deterrence Program is 

Addressing Challenges but Should Improve Its Program Plan, GAO-16-460 (Washington, 

D.C.: Jun. 17, 2016).

45GAO, Nuclear Nonproliferation: Better Information Needed on Results of National 

Nuclear Security Administration’s Research and Technology Development Projects, 

GAO-17-210, (Washington, D.C.: Feb. 3, 2017). A transitioned technology is provided to 

users outside of the project team for further development or deployment. A deployed 

technology is one that is being actively used in the field by a federal agency or foreign 

partner. 
Letter

performance results against baseline targets for scope of work and 

completion date could enhance NNSA’s ability to manage its 

programs in accordance with these standards. More consistently 

tracking and documenting the transitioned and deployed technologies 

that result from DNN’s projects could also facilitate knowledge sharing 

within DNN, and would provide a means by which to present valuable 

information to Congress and other decision makers about the 

programs’ results and overall value. We recommended that NNSA 

consistently track and document results of DNN Research and 

Development projects and document assessments of final project 

results against baseline performance targets. NNSA agreed to take 

actions in response to both recommendations.

Chair Fischer, Ranking Member Donnelly, and Members of the 

Subcommittee, this completes my prepared statement. I would be 

pleased to respond to any questions you may have at this time.

GAO Contact and Staff Acknowledgements

Page 29 GAO-17-651T Department Of Energy

If you or your staff members have any questions about this testimony, 

please contact me at (202) 512-3841 or trimbled@gao.gov. Contact 

points for our Offices of Congressional Relations and Public Affairs may 

be found on the last page of this statement. GAO staff who made key 

contributions to this testimony are Nathan Anderson, Assistant Director; 

Allison Bawden; Natalie Block, Antoinette Capaccio; William Hoehn; 

Amanda Kolling; and Diane LoFaro.

Selected GAO Products

The following is a selection of GAO’s recent work assessing the National 

Nuclear Security Administration’s and the Department of Energy’s Office 

of Environmental Management’s management efforts:

Nuclear Waste: Opportunities Exist to Reduce Risks and Costs by 

Evaluating Different Waste Treatment Approaches at Hanford.

GAO-17-306. Washington, D.C.: May 3, 2017.

National Nuclear Security Administration: Action Needed to Address 

Affordability of Nuclear Modernization Programs. GAO-17-341. 

Washington, D.C.: April 26, 2017.
Letter

Department of Energy: Use of Leading Practices Could Help Manage the 

Risk of Fraud and Other Improper Payments. GAO-17-235. Washington, 

D.C.: March 30, 2017.

Nuclear Nonproliferation: Better Information Needed on Results of 

National Nuclear Security Administration’s Research and Technology 

Development Projects. GAO-17-210. Washington, D.C.: February 3, 

2017.

Nuclear Waste: Benefits and Costs Should Be Better Understood Before 

DOE Commits to a Separate Repository for Defense Waste.

GAO-17-174,.Washington, D.C.: January 31, 2017.

National Nuclear Security Administration: A Plan Incorporating Leading 

Practices Is Needed to Guide Cost Reporting Improvement Effort. 

GAO-17-141. Washington, D.C.: January 19, 2017.

Program Management: DOE Needs to Develop a Comprehensive Policy 

and Training Program. GAO-17-51. Washington, D.C.: November 21, 

2016.

Department of Energy: Actions Needed to Strengthen Acquisition 

Planning for Management and Operating Contracts. GAO-16-529. 

Washington, D.C.: August 9, 2016.

DOE Project Management: NNSA Needs to Clarify Requirements for Its 

Plutonium Analysis Project at Los Alamos. GAO-16-585. Washington, 

D.C.: August 9, 2016.

Nuclear Waste: Waste Isolation Pilot Plant Recovery Demonstrates Cost 

and Schedule Requirements Needed for DOE Cleanup Operations. 

GAO-16-608. Washington, D.C.: August 4, 2016.

Department of Energy: Whistleblower Protections Need Strengthening.

GAO-16-618. Washington, D.C.: July 11, 2016.

Combating Nuclear Smuggling: NNSA’s Detection and Deterrence 

Program is Addressing Challenges but Should Improve Its Program Plan.

GAO-16-460. Washington, D.C.: June 17, 2016.

Hanford Waste Treatment: DOE Needs to Evaluate Alternatives to 

Recently Proposed Projects and Address Technical and Management 

Challenges. GAO-15-354. Washington, D.C.: May 7, 2015.

Page 30 GAO-17-651T Department Of Energy (102029)
Letter

Page 31 GAO-17-651T Department Of Energy
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