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U.S. Department of Energy 

Office of Inspector General 

Office of Audit Services 

Audit Report 

Voluntary Separation Program at the 

Idaho Cleanup Project 

DOE/IG-0765 May 2007 
Department of Energy 

Washington, DC 20585 

May 18, 2007 

MEMORANDUM FOR THE SECRETARY 

FROM: 

Inspector General 

SUBJECT: INFORMATION: Audit Report on "Voluntary Separation 

Program at the Idaho Cleanup Project" 

BACKGROUND 

On May 1, 2005, CH2M Washington Group Idaho, LLC (CWI), assumed responsibility for 

the management and operation of the Department of Energy's (Department) environmental 

reniediation project at the Idaho National Laboratory site. In its contract proposal, CWI 

included a strategy for workforce restructuring to optimize employment levels and obtain 

the proper skills mix to safely address the project's objectives. The Department approved a 

two-phased restructuring approach, permitting CWI to separate up to 700 employees by 

offering a voluntary separation program in January 2006; and, if necessary, an involuntary 

separation program in March 2007. As a result of this initiative, 291 CWI employees were 

separated voluntarily at a cost to the Department of $14 million. 

We conducted this audit to determine whether the cost and benefits associated with 

Idaho's voluntary separation program were consistent with recent similar efforts at other 

Department facilities and whether the separation was structured to ensure that the Idaho 

Project retained the skill mix necessary to meet mission objectives. 

RESULTS OF AUDlT 

As noted previously, the Idaho separation program reduced the size of the CWI 

workforce. Consequently, it will result in monetary savings to the Department over time. 

However, the separation program proved to be exceptionally costly and, in certain 

respects, inefficient. Specifically, the program: 

Provided significantly higher incentives than were offered in other recent 

comparable Department separation programs; 

Used costly incentives that did not have analytical support to justify the additional 

benefits paid; and, 

Did not retain critical skills of certain employees needed to accomplish the Idaho 

Cleanup Project's work scope. 

We evaluated the separation scheme at Idaho by contrasting it to other recent 

Departmental efforts. We noted that 24 of the last 26 contractor restructurings 

throughout the complex, conducted in Fiscal Years 2004 and 2005, provided only 

involuntary separation benefits based on years of service and other benefits. The CWI 
voluntary workforce restructuring provided up to 10 weeks of pay and $25,000 to each 

cmployee -- in addition to the traditional involuntary separation benefits. The 

supplemental voluntary separation incentives offered by CWI averaged $35,000 per 

employee. The CWI voluntary separation program was also ~naterially inconsistelit with 

tlie two other voluntary separations that the Department offered during tliis period. For 

example, the voluntary workforce reduction conducted at the Waste Isolation Pilot Plant 

provided an ilice~itive of only $5,000 per employee. These inconsistencies raised issues 

of fundamental fairness in temis of eiiiployce relations, in addition to questions as to the 

prudelit use of taxpaycr-provided funds. 

CW 1's voluiitary prograin was approved by the Department. We found, howcver, that 

this was done without conducting formal cost analyses or conlparisons to support the 

need for additional incentives to achievc the goals of the prograni. The Department had 

not: 

Ilefincd organizational responsibility for performing cost analyses and 

co~nparisons of workforce restructuring prograins to justify the amount of 

incentive paid; nor had it, 

Provided adequate guidance to assist field offices and contractors in planning 

workforce restructuring actions. 

One of the Department's goals was that the CWI separation program structure retained 

pcrsonncl with specific skills needed to accomplish the mission. Yet, we noted that the 

Deparlment had to backfill 44 (or 15 percent) of the positions vacatcd through the CWI 

separation program, within six months of the separation date. The direct cost of 

backfilling these positions and thc turbule~ice associated with such action raised 

additio~ial conccms about the mechanics of the separation program. 

Additionally, we found that 249 individuals had left the contractor for other emplojment 

while tlie separation program was awaiting Departmental approval. Yet, neither the 

Department nor CWI reevaluated the workforce skill mix and requirements before 

iniplementing the restructuring despite the significant reduction in CWT employees. This 

niay havc significantly impacted the need to backfill positions. 

The workforce restructuring at Idaho will result in an average annual savings of about 

%23 million. However, our analysis showed that the Department spent as much as $10 

niillioii more for the CWI voluntary separation prograni than it had on other comparable 

efforts. Additionally, nearly $2 million was spent to voluntarily separate cmployees 

whose skills were needed for the cleanup mission and whose positions were backfilled 

within six nionths of being separated. We could find no documentation to support the 

notion that elnployee incentives exceeding those provided in other parallel Departmental 

restructuring efforts were necessary to meet the objectives of the program. 

To ensure the reasonable and equitable treatment for scparated employees and their 

affected communities, the Department needs a co~lsistent approach to workforce 

restructuring. Our report includes specific recommendations to achieving tliis goal by 

improving management of future workforce separations. 
MANAGEMENT REACTION 

Management expressed general concurrence with the audit recon~mendations, but 

expressed its view that the audit had not adequately considered the local circumstances 

underlying contractor work force actions across the Departilleilt complex. This included 

differing mission objectives, the number of employee separations, site labor agecments, 

funding availability, contract type and site-specific stakeholder input. We recognize that 

local conditions affect separation programs. But, we believe that the 

co~~~pa~~isons/contrasts we drew between the Idaho program and other Department 

contractor separation programs were fair and valid for analytical purposes. A suillnlary 

of the 26 workforce reductions conducted during Fiscal Years 2004 and 2005, is 

presented in Appendix 3 of the audit report. 

The underlying purpose of the audit was to determine if the Idaho experience provided 

lessons leanled for future Department of Energy restructuring efforts. We believe that it 

did. For this reason, despite our unresolved disagreements with managen~ent, we are 

pleased that the planned actions are responsive to the report's recommendations. We are 

hopeful, as well, that they will be considered in future Departmental personnel 

restructuring programs. The concerns raised by management and the auditor's response 

to those concerns are discussed in the body of this report. Management's comments arc 

included in their entirety in Appendix 5. 

Attachment 

cc: Deputy Secretary 

Acting Under Secretary of Energy 

Under Secretary for Science 

Chief of Staff 

Assistant Secretary for Environmental Management 

Director, Legacy Management 

Manager, ldaho Operations Office 
REPORT ON VOLUNTARY SEPARATION PROGRAM AT THE IDAHO 

CLEANUP PROJECT 

TABLE OF 

CONTENTS 

Consistency of Separation Program

Details of Finding 1 

Recommendations and Comments 8 

Appendices

1. Objective, Scope, and Methodology 11 

2. Related Audit Reports 13 

3. Separation Programs 14 

4. Backfilled Positions 15 

5. Management Comments 16 
IDAHO SEPARATION PROGRAM 

Page 1 Details of Finding 

Background In the past, the Department of Energy's (Department) contractors 

experienced massive and unprecedented workforce restructuring 

activities to reflect the Department's changing mission priorities. 

These events, which took place in the 1990s, led to the loss of 

approximately 50,000 jobs, greatly affecting local communities. In 

order to mitigate the effects on these workers and their 

communities, the Department implemented a policy to minimize 

involuntary layoffs. This policy was implemented by offering 

generous early retirement incentives for those who were eligible, 

voluntary separation incentives for those who were not, and, as a 

last resort, involuntary separations. 

However, the Department's current trend is to offer involuntary 

separation benefits. These involuntary severance packages provide 

cash payments based on years of service as well as other benefits, 

including health benefits that continue after termination for defined 

periods of time, and outplacement assistance. 

The Idaho Cleanup Project workforce restructuring was overseen 

by the Department's Office of Environmental Management (EM), 

as well as the Department's Office of Legacy Management (Legacy 

Management). Legacy Management is considered the subject 

matter expert on restructuring activities and provided assistance 

and guidance to EM to ensure workers were treated fairly, critical 

skills were retained, and severance packages were consistent with 

other Departmental sites. According to Legacy Management's 

planning guidance, contractor workforce restructuring plans should 

be presented to Legacy Management for approval. Prior to 

approval, this office coordinates the appropriate review, analyses 

and evaluation of proposals with other Departmental offices, 

including the affected program office, the Office of General 

Counsel, field management, and procurement. 

Separation Program Although the voluntary separation program successfully reduced 

at Idaho the size of the CH2M Washington Group Idaho, LLC (CWI) 

workforce, it provided significantly higher incentives than were 

offered in other recent Department separation programs and did 

not retain some of the critical skills needed to accomplish the 

Idaho Cleanup Project's work scope. 

Significantly Higher Incentives

The incentives under the CWI voluntary separation program were 

higher than those offered in other recent Department voluntary 

separation programs. Specifically: 
 

Page 2 Details of Finding 

• In a voluntary separation in Fiscal Year (FY) 2004, the Oak 

Ridge complex in Oak Ridge, Tennessee, separated 193 

employees. Voluntarily separated employees were offered 

an incentive that increased the involuntary severance 

benefits by an additional 50 percent. We applied the Oak 

Ridge complex severance plan to the separated CWI 

population (for comparability), and determined that this 

amounted to an average voluntary incentive of $12,800 per 

employee. In contrast, the voluntary incentive offered to 

CWI employees averaged $35,100 per employee. 

• In FY 2004, the Carlsbad Field Office in Carlsbad, New 

Mexico, offered employees at the Waste Isolation Pilot 

Plant an additional incentive of $5,000 to voluntarily 

separate. Once again, in contrast, the voluntary incentive 

offered to CWI employees averaged $35,100 per employee. 

In total, the CWI separation incentives cost $6.5 million more than 

the voluntary severance incentive offered by the Oak Ridge 

complex and over $8.7 million more than the voluntary severance 

incentive offered by the Carlsbad Field Office. 

The Department's decision to approve the voluntary incentives for 

the CWI voluntary separation program was also inconsistent with 

recent trends to conduct contractor staff reductions that offer only 

involuntary separation benefits. Specifically, the Department 

offered involuntary separation benefits in 24 of the 26 recent 

workforce restructurings (see Appendix 3) carried out by the 

Department during FYs 2004 and 2005. For example, in FY 2005, 

the Savannah River Site in Aiken, South Carolina, and the Hanford 

Site in Richland, Washington, separated a total of 1,590 employees 

without offering an incentive benefit. Similar to the Idaho site, 

these sites are located in relatively small communities where the 

Department is a major employer with environmental management 

missions. 

The CWI separation program, with its added incentives, led to 

significantly higher severance payments, as compared to what 

would have been paid had involuntary separation benefits been 

offered. In total, $10.2 million of the $14.2 million paid in CWI 

severance payments was for the incentive portion of the separation 

program. 

According to the Department's Office of General Counsel, the 

primary advantage of using a voluntary separation incentive is that 

the Department requires a "Release of Claim" from those 

employees who accept the voluntary incentives. The Office of 

General Counsel asserted that these releases help protect the 
 

Page 3 Details of Finding 

Department from potential legal claims that employees may 

otherwise seek. However, our analysis showed that there have 

been only 2 legal settlements resulting from the 24 involuntary 

workforce restructuring activities carried out by the Department in 

FY 2004 and 2005. 

In reviewing a draft of this report, management stated that since 

the contract target price included an "advanced understanding" of 

workforce restructuring costs, there is no increased cost to the 

Government. However, we noted that the original contract 

proposal, upon which the contract award was made, included an 

estimate that only $12,500 would be paid to separate each 

employee – an amount consistent with involuntary separation 

benefits. In the end, an average of $48,900 was paid to each 

employee, due largely to the average of $35,100 in voluntary 

incentives offered by CWI. 

Retaining Critical Skills

In addition, CWI's voluntary separation program did not retain 

some critical skills of certain employees needed to accomplish the 

Idaho Cleanup Project work scope. According to CWI's workforce 

restructuring plan, the Idaho Cleanup Project required a workforce 

with different skill sets than the contractor had in place when it 

assumed the contract. Both CWI and the Idaho Operations Office 

(Operations Office) originally envisioned a voluntary separation 

program in which the skills mix was thoroughly evaluated, 

compared to program needs, and surplus positions targeted for 

separation. However, the program was ultimately open to any 

employee who wished to participate. 

Within six months of the separation date, CWI had to backfill 44 

of the 291 (15 percent) positions vacated by separation participants 

who had received severance payments. CWI determined that these 

positions were needed to support cleanup efforts at the Idaho 

Cleanup Project (see Appendix 4). For example: 

• Although CWI was already experiencing a shortage of 

decontamination and decommissioning workers before the 

voluntary separation program, 19 employees in this area 

were allowed to participate in the separation program. 

CWI backfilled 14 of these positions with new hires. 

• Four managers of critical areas such as dosimetry, 

subsurface disposal area operations, maintenance, and 

human resources participated in the separation program. 

CWI hired new managers to replace these manager 

positions. 
 

Page 4 Details of Finding 

The Idaho Operations Office's Work Force Restructuring Plan

specifically stated that backfilling was only permitted "for 

vacancies created by circumstances other than employees 

separating pursuant to incentive separation programs." 

Nonetheless, CWI spent nearly $2 million on severance benefits to 

the employees who vacated critical positions and for which 

replacements had to be hired. 

In reviewing a draft of this report, the Operations Office stated that 

CWI requested and was granted authority to backfill roughly 10 to 

15 employees. Also, the Operations Office disagreed with the 

auditors about the specific number of backfills that CWI hired, 

stating that the auditors overstated the actual number of backfills 

and that the auditors should not include subcontractors hired to 

replace departed employees as backfills. However, the auditors' 

estimate of 44 backfills, including 11 subcontractors, is a very 

conservative number. Specifically, we used numerous factors 

including CWI's job title, work description code, organization, and 

position descriptions based on job tasks and responsibilities for 

conservatism in our estimate. By matching these four descriptive 

elements of a job, we eliminated many employees who would have 

been considered backfills using only the job title, which is the 

methodology CWI used for its skills mix analysis. Finally, we 

concluded that subcontractors should be considered as backfilled 

positions since they perform the same duties and responsibilities as 

the employees who received severance payments to leave CWI. 

CWI also considered subcontractors to be backfilled positions until 

they reviewed a draft of this report. 

Administration of These problems occurred because of several weaknesses in the 

Separation Program administration of the voluntary separation program. Specifically, 

the Department did not: 

• Adequately define organizational responsibility for 

performing and documenting cost analyses and comparisons 

with workforce restructuring programs at other sites to 

justify the amount of incentive provided; and, 

• Provide adequate guidance to evaluate the cost and benefits 

of expending funds in excess of involuntary separation 

costs.

Additionally, we noted that as the staffing circumstances changed, 

neither the Department nor CWI reevaluated the plans for the 

voluntary separation program or sufficiently monitored its 

subsequent hiring activities. 
 

Page 5 Details of Finding 

Analysis and Justification of Incentive Amounts

Departmental officials were not aware of any documented analysis 

that CWI had performed in developing the incentives amount 

offered, stating that it was the contractor's responsibility to manage 

the workforce. When we discussed this concern with management, 

we were informed that while the Operations Office and CWI did 

not document a formal analysis, an informal analysis was 

conducted. According to management, this analysis included a 

discussion and review of CWI's proposed incentives which the 

Operations Office found to be reasonable and judged that it would 

successfully encourage as many CWI employees to voluntarily 

leave as possible. However, in the absence of a documented 

analysis, we were not able to assess the validity of management's 

assertions on the matter. 

Additionally, Department management asserted that it reviewed 

and analyzed CWI's "Business Case" which provided the cost to 

benefit calculations for their workforce restructuring activities. 

However, the business case did not address the appropriateness of 

the amount of incentives that were offered to the employees, and 

the rationale for arriving at the generous amounts offered to the 

workforce. Finally, management also noted that the separation 

costs were included and evaluated during the contract award 

process. However, as previously indicated, the contract proposal 

estimated separation costs of only $12,500 per employee, rather 

than the average payment of $48,900 that was ultimately paid to 

each participant. 

We also found that the Federal stewardship for analyzing, 

accepting and monitoring the implementation of CWI's voluntary 

separation package had not been adequately defined. Each of the 

Departmental offices involved in the process, EM, Legacy 

Management, and the Operations Office, stated that they had not 

been assigned responsibility for analyzing the severance payment 

amounts. The Operations Office informed us that before they 

could implement the plan, Legacy Management was required to 

approve the restructuring plan. This is consistent with DOE Order 

350.1, which requires Legacy Management approval for all major 

workforce restructuring activities, since it is the subject matter 

expert. However, Legacy Management officials stated that it was 

EM's responsibility to assess the appropriateness of the amount 

offered in CWI's severance plan since its program funds were used 

to fund the separation. EM, in turn, relied on the Operations 

Office and Legacy Management to do this. Legacy Management 
 

Page 6 Details of Finding 

asserted that it is responsible for approval of the use of funds 

specifically provided by Congress throughout the 1990s and until 

2004 for transitioning Cold War employees, and is not responsible 

for approving the use of program funds for workforce restructuring 

plans. 

 

Both the Operations Office and Legacy Management indicated that 

the Office of Contractor Human Resources (an office in the 

Department's Procurement business line) had oversight authority 

for all contractor severance programs, since these are reviewed as 

part of the contract award process; therefore, this office approved 

the severance benefits offered by the contractor in its winning 

contract proposal and subsequent development of the contract. 

However, according to Legacy Management Guidance, major 

workforce restructuring activities (such as the one being conducted 

by CWI) require an additional approval and review process to be 

led by Legacy Management. Since the severance benefits offered 

by CWI exceeded the benefits contemplated in CWI's contract 

proposal, we concluded that management should have more fully 

analyzed the need for such a generous voluntary incentive. 

Unfortunately, since each group assumed the other was doing the 

necessary analysis to justify and approve the severance amount, 

ultimately, none of the cognizant groups were able to provide this 

analysis to the auditors. 

Departmental Guidance

We also noted that the Department did not have clear guidance on 

workforce restructurings to assure consistency and reasonableness 

over expenditures for separations. While the Department did offer 

guidance articulating its goal that involuntary separations and the 

impact to employees and communities should be minimized, this 

general guidance was not consistent with recent Department 

practices in which the overwhelming majority of the separations 

were paid only involuntary severance benefits. 

Furthermore, although Legacy Management's strategic plan 

requires it to provide "... definitive direction on the amounts of 

severance permitted for workforce separations" and "... separation 

benefits comparable to industry standards," it had not issued 

sufficient guidance to ensure fair and equitable treatment across 

the Department. Rather, Legacy Management's role in the process 

was limited to reviewing CWI's workforce restructuring program 

for legality, completeness, and fair treatment of protected classes 

of employees. Also, the Department had not established 

performance measures to be used in weighing the costs and 
 

Page 7 Details of Finding 

benefits of using incentives to achieve desired workforce 

restructuring goals. Departmental officials informed us that any 

savings are worthwhile and that any performance measure would 

be fairly arbitrary. However, we noted that until FY 2004, the 

Department measured its savings from workforce restructurings. 

In fact, the Department's experience indicated that past workforce 

restructurings met a performance measure in which the annual 

savings ratio was three times the one-time cost of the separation. 

In the case of the CWI restructuring, the average annual savings 

were 1.6 times the one-time cost of the restructuring. 

Monitoring

From May to December 2005, while the voluntary separation 

program was awaiting approval from the Department, there was 

considerable employee turnover at CWI. During this period, 249 

employees left the contractor for positions elsewhere and 107 new 

employees were hired. Despite this turnover, the Operations 

Office did not require CWI to reassess their skills mix and 

workforce requirements. Additionally, the Operations Office did 

not sufficiently monitor CWI's subsequent hiring activities. 

Specifically, the Operations Office granted CWI permission to 

backfill a small number of critical positions, roughly 10-15, if CWI 

found this necessary subsequent to the separations program. This 

permission was granted despite the Operations Office requirement 

that the contractor avoid backfilling positions except for positions 

created by circumstances other than an incentivized voluntary 

separation program. However, the Operations Office did not 

sufficiently monitor CWI's hiring activities to ensure that no more 

backfills than agreed to were being hired. 

Cost of Voluntary As a result, the Department spent between $6.5 million and 

Separation $10.2 million more for CWI's voluntary separation program than 

comparable separations. Additionally, the Department spent 

nearly $2 million to voluntarily separate employees whose 

positions were backfilled within 6 months of being separated. 

Without a consistent approach to workforce restructuring, the 

Department cannot ensure the reasonable and equitable treatment 

of separated employees and their affected communities. 
 

Page 8 Recommendations and Comments 

RECOMMENDATIONS 1. We recommend the Director, Office of Legacy Management: 

a. Work with programmatic secretarial offices to clearly 

delineate roles and responsibilities for workforce 

restructuring; 

b. Develop and issue Department-wide guidance to assist 

field offices and contractors in planning workforce 

restructuring actions, including methodologies for 

determining appropriate amounts of benefits offered 

and corporate parameters (limits) on restructuring 

activities; and, 

c. Establish Department-wide performance standards to 

evaluate and weigh the relative cost and benefits of 

workforce restructuring activities to assist management 

in its evaluation of proposed actions. 

2. We recommend the Assistant Secretary for Environmental 

Management require sites to justify and document the 

reasoning behind benefits offered in workforce restructuring 

activities, and consider factors such as community impact, 

industry standards, and Department trends. 

3. We recommend the Manager, Idaho Operations Office: 

a. Require CWI to notify the Idaho Operations Office of 

any other backfilling needs for their review and 

approval; 

b. Rigorously monitor subsequent hiring activities to 

ensure excessive backfilling does not occur in future 

workforce restructuring activities; and, 

c. Evaluate whether any of the nearly $2 million in 

payments to separate positions that were backfilled are 

allowable under the contract. 

MANAGEMENT Department management concurred with the recommendations 

REACTION but expressed concern with some of the information presented in 

the report. Specifically, management stated that the findings did 

not take into consideration different circumstances underlying 

contractor workforce actions across the complex; discounted the 

net life cycle savings to be realized from the workforce reductions; 

and misconstrued the effectiveness of the "Release of Claim" form 

from voluntarily separating employees. 
 

Page 9 Comments 

Management stated that the report findings did not take into 

consideration the different circumstances underlying contractor 

workforce actions across the complex such as (1) different mission 

objectives; (2) the number of employee separations determined 

necessary by a contractor for the necessary skill mix; (3) site labor 

agreements; (4) funding availability; (5) contract type; and, (6) site 

specific stakeholder input. Because of these differences, 

management did not agree that different separation incentives at 

different sites result in unfair or inequitable treatment.

In management's view, the report also discounted the contractor's 

estimate of net life cycle savings of $143 million to be realized 

over the term of the contract. CWI's contract specifically provides 

additional financial incentives for the contractor if it completes the 

workscope under specified target costs. If the Department had not 

allowed the workforce restructuring, as completed, the contractor 

may have been unable to remain under the target costs and been 

subject to a reduced fee instead of earning an additional fee for 

remaining under the target costs. 

Finally, management asserted that the report misconstrued the 

effectiveness of a "Release of Claim" from voluntarily separating 

employees. Management believed that two legal settlements 

resulting from 24 involuntary workforce restructuring activities did 

not support the implied proposition that Releases of Claim used for 

voluntary separations are of little value. 

AUDITOR While management's proposed actions are responsive to the 

COMMENTS recommendations, we believe that the report clearly considered 

the circumstances underlying contractor workforce actions across 

the complex, highlighted the cost savings available to the 

Department through the workforce restructuring at CWI, and 

supports the need to assess the value and effectiveness of providing 

voluntary separation incentives to the workforce. 

While the report focused on similarities between sites rather than 

differences as noted by management, in performing the audit, we 

considered the issues raised by management. For example, the 

report compares the Idaho separation program to those at Savannah 

River and Hanford. All of these sites have a significant 

environmental cleanup mission, are in similar sized communities 

where the Department is the major employer, have a similar cost of 

living, and the workforce reductions were large. We believe that 

these similarities adequately justify a comparison. Also, 

management stated that the report did not consider the number of 
 

Page 10 Comments 

separations deemed necessary by a contractor for the necessary 

skills mix to complete its required workscope. On the contrary, 

this issue was a major element of the report. Specifically, we 

compared the CWI restructuring to sites such as Savannah River 

and Hanford, which also conducted workforce restructurings that 

involved large numbers of employees. Additionally, the report 

noted that CWI did not manage its separations program in a 

manner that retained employees with the skills mix required for the 

completion of the workscope. Accordingly, CWI was forced to 

backfill many necessary positions that it paid its employees to 

vacate. 

We did not find that other circumstances cited by management, 

such as site labor agreements, differences in funding availability, 

and contract types, were always germane to the decision to offer 

voluntary incentives. For example, site labor agreements did not 

address voluntary separation incentives, the only requirement 

being that normal severance be paid to employees that are 

involuntarily separated. Additionally, we did not find 

management's assertion about the impact of other circumstances on 

the decision to offer voluntary incentives compelling because the 

Department could not demonstrate that it had analyzed such 

circumstances in determining the amount of incentive to offer CWI 

employees.

 

Management also stated the report failed to acknowledge the large 

life-cycle cost savings estimate the contractor anticipates from this 

separation action. Specifically, the report acknowledges that the 

separation program will result in significant cost savings and 

identifies the average annual amount of savings. However, had 

CWI offered severance benefits consistent with the amounts 

offered by other Department contractors, it could have met its 

workforce reduction goals at a lower cost. In fact, as noted in the 

report, the Department's experience indicated that past workforce 

restructurings met a performance measure in which the annual 

savings ratio was three times the one-time cost of the separation. 

In the case of the CWI restructuring, the average annual savings 

were only 1.6 times the one-time cost of the restructuring.

Although the Department stated that the primary advantage for 

proceeding with a costly voluntary separation program was the 

"Release of Claim," we noted that, out of the 4,579 employees 

separated during the 24 involuntary workforce restructuring 

activities, only 2 individual claim settlements have resulted. 

Management could not demonstrate that it had considered whether 

the cost of the voluntary separation was offset by the benefit of 

obtaining the "Release of Claim" form from CWI employees. 
Appendix 1 

Page 11 Objective, Scope, and Methodology 

OBJECTIVE The objective of this audit was to determine whether the CH2M 

Washington Group Idaho, LLC (CWI), voluntary separation 

program was consistent with recent separations within the 

Department of Energy (Department) and whether it retained the 

necessary skills mix to meet the Idaho Cleanup Project mission. 

 

SCOPE The audit was performed from May 2006 to April 2007 at the 

Idaho Operations Office (Operations Office); CWI in Idaho Falls, 

Idaho; and the Department of Energy (Department) Headquarters 

offices in Washington, D.C. The audit covered the development of 

the CWI Voluntary Separation Incentive Program, implementation 

of the program in January 2006, as well as subsequent hiring 

activities at CWI through August 2006. Additionally, for 

comparison purposes, we reviewed 26 other Departmental 

workforce restructuring activities from Fiscal Year 2004 through 

the end of Fiscal Year 2005. 

METHODOLOGY To accomplish the audit objective, we: 

• Obtained and reviewed Department guidance and 

requirements, including workforce restructuring plans, 

strategic plans, and the CWI contract; 

• Researched Federal and Departmental regulations; 

• Interviewed key personnel at the Operations Office, the 

Office of Environmental Management, the Office of 

Legacy Management, the Office of General Counsel, and 

CWI; 

• Reviewed findings from prior audit reports regarding 

workforce restructuring; 

• Compared the cost of the CWI voluntary separation 

program to performance standards; 

• Compared the cost of the CWI voluntary separation 

program to other sites' separation plans by applying the 

separation incentive rates at other sites to the CWI 

voluntary separation program population; and, 

• Assessed the personnel statistics of CWI from contract 

takeover to August 2006. 
Appendix 1 (continued) 

Page 12 Objective, Scope, and Methodology 

The audit was performed in accordance with generally accepted 

Government auditing standards for performance audits and 

included tests of internal controls and compliance with laws and 

regulations to the extent necessary to satisfy the audit objective. 

Specifically, we tested controls with respect to the Department's 

design, approval, and implementation of contractor workforce 

restructuring activities. 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 considered the 

establishment of performance measures in accordance with the 

Government Performance and Results Act of 1993 as they related 

to the audit objective, and determined that the Department needed 

to establish Department-wide performance measures. Finally, 

since we did not rely on automated data processing equipment to 

accomplish our audit objective, we did not conduct tests to assess 

the reliability of this equipment. 

An exit conference was held with management on May 3, 2007. 
Appendix 2 

Page 13 Related Audit Report 

RELATED AUDIT REPORT 

• Department of Energy (Department), Value of Benefits Paid to Separated Contractor 

Workforce Varied Widely (GAO, January 1997). Similar benefits were offered to 

separated employees at most sites, but the value of the benefits varied considerably. 

The variance in separation payments was due to the differences in the severance pay 

formula used and the characteristics of the workforce at each facility. The difference 

in the value of benefits shows the emphasis the Department places on developing 

plans at the local level. The Department gives limited oversight on how to implement 

workforce restructuring plans. Little monitoring is done by Department program 

personnel. More than half of the plans provided more generous severance pay than 

would have normally been provided by contractors under existing contracts, and 

almost all plans provided benefits not normally provided by contracts, such as 

extended medical insurance. In addition, the benefits exceeded those that would have 

been provided to Federal employees in a reduction in force. The Department has 

taken steps to improve their ability to retain critically needed skills. New guidance 

emphasizes workforce planning and facilities using targeted voluntary separations to 

retain critical skills. Department guidance allows the use of enhanced severance 

payments to encourage voluntary separations. When reviews have been performed by 

the Office of Inspector General or Internal Audit, instances of excessive costs have 

been identified. 
Appendix 3 

Page 14 Separation Programs 

SEPARATION PROGRAMS

Site Fiscal Year Voluntary Involuntary Total 

Argonne 2004 

 

67 67 

Argonne 2005 87 87 

Brookhaven 2004 50 50 

Brookhaven 2005 53 53 

Hanford 2004 151 151 

Hanford 2005 397 397 

Idaho 2004 15 15 

Nevada Test Site 2004 47 47 

Nevada Test Site 2005 33 33 

Oak Ridge 2004 193 41 234 

Oak Ridge 2005 19 19 

Fernald 2004 212 212 

Fernald 2005 233 233 

Paducah 2004 18 18 

Paducah 2005 5 5 

Kansas City 2004 1 1 

Kansas City 2005 15 15 

Portsmouth 2004 17 17 

Portsmouth 2005 27 27 

Rocky Flats 2004 560 560 

Rocky Flats 2005 967 967 

Savannah River 2004 202 202 

Savannah River 2005 1,193 1,193 

Mound 2004 142 142 

Mound 2005 68 68 

WIPP 2004 41 6 47 

Total 

 

234 4,626 4,860 

Bold indicates that this site was highlighted in this report. Involuntary Separations include 

any reductions conducted by offering involuntary separation benefits. 

The table includes the Defense Nuclear Sites that reported separations to Legacy 

Management in 2004 and 2005.
Appendix 4 

Page 15 Backfilled Positions 

BACKFILLED POSITIONS 

Job Title – 

Voluntary 

Separation 

Job Title – New 

Hire 

Work 

Description of 

Backfilled 

Positions 

Organization of 

Backfilled 

Positions 

Number of 

Positions 

Backfilled 

Department 

Manager 

Department 

Manager 

Manager, Admin. 

Services 

Dosimetry 1 

Department 

Manager 

Department 

Manager 

Manager, Sci/Eng RWMC SDA 1 

Department 

Manager 

Department 

Manager 

Manager, 

Operations 

Human Resources 1 

Department 

Manager 

Department 

Manager 

Manager, Sci/Eng Maintenance 1 

Various D&D 

Trades 

D&D Skilled Trade Various Various D&D 6 

D&D Helper D&D Helper Laborer Various D&D 8 

SR Rad Con 

Technician 

SR Rad Con 

Technician 

Radiological 

Control Tech 

Radiological 

Control 

2 

Staff 

Engineer/Scientist 

Engineer/Scientist Mechanical 

Engineering 

Design and 

Engineering 

1 

Staff 

Engineer/Scientist 

Staff 

Engineer/Scientist 

Quality 

Engineering 

Quality Site 

Engineering 

1 

Staff 

Engineer/Scientist 

SR 

Engineer/Scientist 

Operations 

Engineering 

Operations 

Engineering 

1 

SR 

Engineer/Scientist 

Engineer/Scientist Electrical 

Engineering 

Design and 

Engineering 

1 

PR Technical Spec Technical Spec FAC Operations Coordination 

Production 

1 

SR Tech Spec Advisory Eng/Sci Database 

Engineering 

Enterprise System 

Engineering 

1 

SR Tech Spec PR Tech Spec Computer System Operations 1 

Bus/Ops Spec SR Bus/ Ops Spec Other Admin. 

Services 

Training 1 

Electrician 1st Electrician 1st Electrician Various 1 

Matl/Parts Specialist Matl/Parts 

Specialist 

Material 

Specialist 

Warehouse/ 

Distribution 

1 

Custodian Custodian Custodian ICP Maintenance 3 

Total CWI 

Employees 

 33 

Subcontractors 11 

Grand Total 44 
Appendix 5 

Page 16 Management Comments 
Appendix 5 (continued) 

Page 17 Management Comments 
Appendix 5 (continued) 

Page 18 Management Comments 
IG Report No. DOE/IG-0765

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