a

GAO

United States Government Accountability Office

Report to the Subcommittee on Energy 

and Water Development, Committee on 

Appropriations, House of 

Representatives

October 2005 DEPARTMENT OF 

ENERGY

Improved Guidance, 

Oversight, and 

Planning Are Needed 

to Better Identify 

Cost-Saving 

Alternatives for 

Managing Low-Level 

Radioactive Waste

GAO-06-94
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

October 2005

DEPARTMENT OF ENERGY 

Improved Guidance, Oversight, and 

Planning Are Needed to Better Identify 

Cost-Saving Alternatives for Managing 

Low-Level Radioactive Waste 

 

Highlights of GAO-06-94, a report to the 

Subcommittee on Energy and Water 

Development, Committee on 

Appropriations, House of Representatives

In 2004, the Department of Energy

(DOE) disposed of more than 

378,000 cubic meters of low-level

radioactive waste (LLRW)—

contaminated building rubble, soil, 

and debris. In 2002, DOE directed

its sites to use life-cycle cost 

analysis to manage LLRW. Lifecycle cost analysis examines the 

total cost of various options to

manage LLRW over its life, 

including its packaging, treatment, 

transport, and disposal, to identify

the lowest-cost alternative. GAO 

determined whether (1) DOE sites 

use life-cycle cost analysis to 

evaluate LLRW management 

alternatives and (2) DOE has a 

strategy for cost-effectively

managing LLRW departmentwide,

including state actions that may 

affect this strategy. 

What GAO Recommends

GAO is making recommendations 

to better ensure that DOE sites 

properly use life-cycle cost analysis

to evaluate LLRW management

options and that DOE successfully 

develop and implement a DOEwide LLRW strategic plan. In 

commenting on the draft report,

DOE generally agreed with our 

conclusions and thanked us for the 

recommendations, but disagreed 

with or wanted to clarify certain

statements in the draft report and

provided technical comments 

which we incorporated as 

appropriate. 

The six DOE sites we visited, representing more than 70 percent of the 

LLRW disposed of by DOE during 2003 and 2004, did not consistently use 

life-cycle cost analysis because of weak DOE guidance and a lack of 

oversight of contractors’ implementation of this guidance. As a result, DOE 

cannot ensure that lowest-cost LLRW management alternatives are 

identified, so that managers make decisions that fully weigh costs against 

noncost factors, such as safety and schedule. For example, DOE contractors 

at two sites did not consistently consider alternative transportation modes 

or postclosure maintenance and surveillance costs of disposal sites in their

analyses for fiscal year 2004 disposal decisions. GAO also could not always

determine how contractors used cost analyses in disposal decisions because

of incomplete documentation. While DOE’s guidance requires each site to 

develop the mechanisms necessary to ensure use of life-cycle cost analysis, 

it does not specify, for example, (1) a systematic, consistent method of 

analyzing all cost elements to determine the lowest cost, or (2) when 

analyses should be performed. Also, no such guidance was incorporated 

into site contracts, and DOE site offices had not evaluated contractors’ use 

of life-cycle cost analysis. 

DOE has recognized that its current approach---having each site responsible 

for developing mechanisms necessary to control costs—may result in cost 

inefficiencies and may limit its ability to meet departmentwide strategic 

objectives. As a result, DOE plans to begin implementing a national LLRW 

disposition strategy by March 2006 to better coordinate disposal efforts—

specific schedules have not yet been established for when the strategy will

be fully in place. However, DOE faces challenges in developing and 

implementing this strategy. First, it needs to gather complete data on the 

amount of LLRW needing disposal. Second, the fact that DOE’s multiple 

program and site offices have differing missions and oversee many

contractors presents coordination challenges. For example, one program 

office dismantled and disposed of a supercompactor used to reduce the 

volume of large LLRW items without a DOE-wide assessment of LLRW 

compacting needs and without considering other potential cost-effective 

uses for the supercompactor that might benefit other DOE sites. Third, DOE 

faces state actions that have restricted access to disposal facilities, making it

more difficult to coordinate and integrate disposal departmentwide. 

Cost Elements of LLRW Management

www.gao.gov/cgi-bin/getrpt?GAO-06-94.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Gene Aloise at 

(202) 512-3841 or aloisee@gao.gov. 
Page i GAO-06-94 Department of Energy

Contents

Letter 1

Results in Brief 4

Background 7

DOE Sites Do Not Consistently Use Life-Cycle Cost Analysis in 

Managing LLRW 9

DOE Faces Challenges in Developing a National LLRW Disposition 

Strategy 17

Conclusions 22

Recommendations for Executive Action 22

Agency Comments and Our Evaluation 23

Appendixes

Appendix I: Disposed Waste Volume by Major DOE Generator Sites, 

Fiscal Year 2004 through Second Quarter, Fiscal Year 2005 26

Appendix II: Comments from the Department of Energy 27

Appendix III: GAO Contact and Staff Acknowledgments 29

Table Table 1: Cost Elements in Life-Cycle Cost Analysis and Associated 

Activities 10

Abbreviations

DOE Department of Energy

EM Office of Environmental Management

LLRW low-level radioactive waste

NNSA National Nuclear Security Administration

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Page 1 GAO-06-94 Department of Energy

United States Government Accountability Office

Washington, D.C. 20548

A

October 31, 2005 Letr

The Honorable David L. Hobson

Chairman

The Honorable Peter J. Visclosky 

Ranking Minority Member

Subcommittee on Energy and Water Development

Committee on Appropriations

House of Representatives

In fiscal year 2004, the Department of Energy (DOE) disposed of more than 

378,000 cubic meters of low-level radioactive waste (LLRW)—enough to fill 

a football field to the depth of a 19-story building.1

 This waste included 

radioactively contaminated building rubble, soil, and debris, as well as a 

small volume of mixed waste, which is LLRW that is further contaminated 

with chemicals and other hazardous waste.2

 DOE disposes of such waste at 

two federal facilities—the Hanford Site in Washington State and the 

Nevada Test Site—and one commercial facility in Utah. Disposal actions at 

these facilities are in some cases subject to regulation and licensing 

decisions by the states in which they are located. DOE’s Office of 

Environmental Management (EM) manages the majority of LLRW at 

multiple sites where the department is cleaning up facilities that were 

contaminated with radioactivity as a result of, for example, nuclear 

weapons-related activities. Many factors must be taken into account in 

managing this waste, including health and safety and the target dates for 

cleaning up the sites. Cost is also an important factor. In 2000, we reported 

that DOE spent more than $700 million to manage LLRW from 1997 through 

1999. 3

One tool for evaluating LLRW management costs is life-cycle cost analysis. 

Such analysis calculates the total cost to manage waste over its life, 

including cost elements like waste packaging, treatment, transportation, 

disposal, and monitoring of the disposal site after closure. The analysis is 

1

This volume is only for waste disposed of at off-site locations. Additional LLRW is disposed 

of at the DOE sites where it is generated.

2

Throughout this report, references to low-level radioactive waste also include mixed waste, 

unless otherwise specified. 

3

GAO, Low-Level Radioactive Wastes: Department of Energy Has Opportunities to Reduce 

Disposal Costs, GAO/RCED-00-64 (Washington, D.C.: Apr. 12, 2000). 
Page 2 GAO-06-94 Department of Energy

valuable for comparing the total costs of various waste management 

options leading up to and including disposal to identify the most costeffective alternative. The results of such analyses can be used in making 

LLRW management decisions that weigh cost against noncost factors such 

as safety, health, and schedule. DOE’s use of complete, current, and welldocumented life-cycle cost analyses in making LLRW management 

decisions, if properly conducted, is consistent with the intent of DOE Order 

430.1B on real property asset management. This order identifies 

requirements for life-cycle management of real property assets, including 

DOE land, improvements, facilities, and structures, from planning and 

acquisition through disposal. The order is relevant to LLRW management 

because many DOE facilities and structures that are considered real 

property assets eventually become LLRW through EM cleanup efforts. The 

proper use of life-cycle cost analysis is also consistent with Office of 

Management and Budget Circular A-94, which provides guidance on 

conducting cost-effective analyses of federal programs and projects. 

Among other things, the circular states that a program is cost-effective if, 

on the basis of life-cycle cost analysis of competing alternatives, it is 

determined to have the lowest costs for a given amount of benefits. 

Concerned that DOE may be relying too heavily on the Nevada Test Site 

and Hanford facilities instead of considering other alternatives, such as 

commercial disposal facilities, the House Committee on Appropriations 

directed DOE to prepare a cost study analyzing the life-cycle costs of LLRW 

management alternatives.4

 DOE’s life-cycle cost study, sent to Congress in 

July 2002, specified cost elements to include in life-cycle cost analysis, 

defined some LLRW management alternatives, and highlighted the 

potential for finding various cost differences among alternatives, among 

other things. 5 The study stressed that a thorough evaluation of all life-cycle 

costs is crucial to identifying the lowest-cost alternative for LLRW 

management. Although the study recommended that DOE sites consider all 

life-cycle costs in evaluating alternatives for LLRW management, it 

cautioned that DOE’s data collection and reporting processes needed to be 

improved to make any departmentwide cost analyses useful. 

4

H.R. Rep. No. 107-112, at 135 (2001). A congressional conference committee later issued a 

similar directive. H.R. Rep. No. 107-258, at 133 (2001). 

5

Department of Energy, Report to Congress, The Cost of Waste Disposal: Life-Cycle Cost 

Analysis of Disposal of Department of Energy Low-Level Radioactive Waste at Federal 

and Commercial Facilities (Washington, D.C.: July 2002).
Page 3 GAO-06-94 Department of Energy

In this context, you asked us to determine whether (1) DOE sites use lifecycle cost analysis to evaluate management alternatives for LLRW and (2) 

DOE has a strategy for cost-effectively managing LLRW disposal 

departmentwide, including state actions that may affect this strategy. 

To determine whether DOE sites use life-cycle cost analysis to evaluate 

management alternatives for LLRW, we obtained information from DOE 

and contractor officials using structured interview guides, reviewed agency 

documents on life-cycle cost analysis requirements and practices, and 

reviewed analyses prepared at a nonprobability sample of six DOE sites 

that generate LLRW.6

 In selecting these waste generators for site visits, we 

used LLRW disposal volumes reported by two disposal facilities—DOE’s 

Nevada Test Site and a commercial disposal facility in Utah—to select 

three waste generator sites under EM’s control: two EM sites that disposed 

of the largest volume of LLRW in fiscal year 2004—Fernald, Ohio, and 

Rocky Flats, Colorado—and one EM site with the largest projected volume 

for fiscal year 2005—Paducah, Kentucky.7

 To provide a DOE-wide 

perspective, our nonprobability sample also included three waste 

generator sites under non-EM program offices. Because multiple DOE 

program activities can exist at a single non-EM site, and comprehensive, 

departmentwide data on LLRW volumes needing disposal do not exist, we 

selected our non-EM sites based on (1) the overall disposal volume of 

LLRW sent to the Nevada Test Site and Envirocare of Utah in fiscal year 

2004 and (2) judgments made by DOE officials regarding the amount of 

newly generated LLRW volumes for which DOE’s National Nuclear Security 

Administration (NNSA) is responsible. These three waste generator sites 

we visited were the Office of Science’s Oak Ridge Reservation and East 

Tennessee Technology Park, and NNSA’s Y-12 Plant—all in Oak Ridge, 

Tennessee. We assessed the general reliability of the information on LLRW 

disposal volumes by comparing data provided by waste generators with 

data from disposal facilities, and determined that this information was 

reliable enough for selecting sites. In total, the six sites we visited 

constituted about 70 percent of DOE’s LLRW disposal volume for an 18-

month period—October 1, 2003, through March 31, 2005. 

6

Results of nonprobability samples cannot be used to make inferences about a population 

because in a nonprobability sample some elements of the population being studied have no 

chance or an unknown chance of being selected as part of the sample.

7

We did not use information on LLRW volumes sent to DOE’s Hanford disposal site to select 

waste generators for site visits. Hanford’s disposal site accounted for less than 1 percent of 

DOE’s off-site LLRW disposal volume in fiscal year 2004. 
Page 4 GAO-06-94 Department of Energy

To examine whether DOE has a strategy for integrating DOE-wide disposal 

operations to ensure cost-effective disposal, we reviewed DOE’s draft plan 

for a national LLRW disposition strategy and used structured interview 

guides to obtain information from DOE and contractor officials at DOE 

waste generator sites and disposal facilities. In addition, we spoke with 

DOE officials from DOE program offices in Washington, D.C, including EM, 

NNSA, the Office of Science, and the Office of Nuclear Energy, Science and 

Technology. We also spoke with appropriate DOE and state officials to 

identify state actions, such as regulatory and court actions, that have 

affected DOE LLRW disposal options and to determine DOE’s response to 

these actions. We performed our work between June 2004 and August 2005, 

in accordance with generally accepted government auditing standards. 

Results in Brief The six DOE sites we visited, representing more than 70 percent of the 

LLRW disposed of by DOE during 2003 and 2004, did not consistently use 

life-cycle cost analysis to ensure that the lowest-cost LLRW management 

alternatives are identified because of weaknesses in DOE’s guidance for 

life-cycle cost analysis and a lack of oversight of contractors’ 

implementation of this guidance. Specifically:

• Cost analyses are not complete, current, or well documented. The six 

DOE sites prepared various types of cost analyses in making LLRW 

management decisions, but these analyses did not always include all 

life-cycle cost elements or examine alternative courses of action, and 

were not always current or formally documented. For example, DOE 

contractors at two sites—Rocky Flats, Colorado, and Paducah, 

Kentucky—did not consistently consider alternative transportation 

modes for shipping waste or postclosure maintenance and surveillance 

costs of disposal sites in their analyses supporting their fiscal year 2004 

LLRW disposal decisions. In contrast, the contractor at Fernald, Ohio, 

prepared cost analyses that included all life-cycle cost elements and 

examined alternative options. However, Fernald’s life-cycle cost 

analysis, used to justify its 2004 LLRW disposal decisions, was not 

current—it was over 10 years old and had not been updated to reflect 

any changes that might have occurred in the costs for packaging, 

treatment, transportation, or disposal. In other cases, such as at DOE’s 

Rocky Flats site, we could not determine how contractors incorporated 

cost analyses into their disposal decisions because their documentation 

was incomplete. Rocky Flats officials told us that disposal decisions 

were at times based on noncost factors, such as schedule or safety, but 
Page 5 GAO-06-94 Department of Energy

agreed that decisions were not consistently documented to show the 

rationale for how cost was balanced against other factors. 

• DOE’s guidance and contractor oversight are weak. The cost analysis 

inconsistencies have occurred, in part, because DOE’s guidance on lifecycle cost analysis is incomplete. For example, EM headquarters’ July 

2002 guidance to site offices on life-cycle cost analysis directed sites to 

develop mechanisms necessary to establish that its LLRW disposal 

decisions include the best estimate of full “cradle to grave” costs and 

analysis of alternatives, but it did not specify (1) a systematic, consistent 

method of analyzing all cost elements to determine the lowest cost; (2) 

when or under what circumstances the analysis should be performed; 

(3) relevant DOE orders, manuals, or other reference materials that 

could provide consistent direction on life-cycle cost analysis; or (4) how 

final LLRW management decisions should be documented. Furthermore, 

DOE site offices were ineffective in overseeing contractors’ use of lifecycle cost analysis, which also contributed to ineffective 

implementation of the guidance. At the sites we visited, neither DOE nor 

contractors had taken identifiable steps to implement the guidance on 

life-cycle cost analysis. For example, DOE has not incorporated lifecycle cost analysis guidance into site contracts. When we brought these 

issues to DOE’s attention, EM officials responded that they have relied 

on the use of incentive-based contracts to ensure contractors are 

making cost-effective decisions. Incentive-based contracts provide 

specific incentives for specified performance outcomes, often driven by 

site-specific goals and objectives in areas such as health, schedule, cost, 

or other areas, as negotiated between DOE and the contractor. For 

example, incentive-based contracts might help DOE meet goals such as 

accelerated cleanup, which may in some cases reduce overall site costs. 

However, the use of these contracts does not necessarily ensure that 

contractors identify the lowest-cost waste management alternatives, 

unless the contract provides this specific focus. 

DOE has recognized that its current approach---having each site 

responsible for developing mechanisms necessary to control costs—may 

result in cost inefficiencies and could limit its ability to meet 

departmentwide strategic objectives, such as accelerated waste cleanup 

and site closure. To overcome these problems, DOE has begun planning a 

national LLRW disposition strategy to minimize life-cycle costs, among 

other things. DOE plans to begin implementing this strategy in March 2006, 

but specific schedules have not yet been established for when the strategy 
Page 6 GAO-06-94 Department of Energy

will be fully in place. The department faces the following challenges in 

achieving an integrated departmentwide strategy: 

• Collecting basic data on the amounts of LLRW needing disposal by 

program offices departmentwide. Although DOE continues to report 

progress in disposing of LLRW, the LLRW volumes it reports as needing 

disposal are not complete. DOE officials acknowledge that its databases 

are outdated and incomplete and do not include all LLRW expected to 

be generated in the future as part of ongoing environmental cleanup or 

produced by non-EM generators. Complete information is crucial for 

developing a national strategy and for holding organizations and 

individuals responsible and accountable for cost-effectively managing 

LLRW. EM plans to gather complete information as part of its national 

disposition strategy.

• Overseeing LLRW management in a department with a complex 

organization and multiple missions. Specifically, DOE’s multiple 

program offices and related site offices have differing missions and 

oversee a variety of site operating contractors, who manage wastes with 

many different characteristics. DOE’s Oak Ridge site illustrates how this 

complexity can pose additional challenges for LLRW management. At 

the Oak Ridge site, DOE has three different program offices, each with 

its own contractor with differing levels of responsibility for managing or 

disposing of portions of LLRW. This condition has complicated efforts to 

dispose of LLRW cost-effectively. For example, in 2004, DOE allowed a 

contractor to dispose of a supercompactor used to reduce the volume of 

large pieces of LLRW debris from its gaseous diffusion plant. The 

decision to dismantle and dispose of this compactor was made without 

a departmentwide assessment of LLRW volume reduction needs and 

capabilities, and without fully considering the supercompactor’s 

potential for reducing LLRW volumes and lowering costs for other 

program offices at Oak Ridge and other sites. Consequently, DOE may 

have missed a potential cost-saving opportunity because other waste 

generator sites might have benefited from the use of the 

supercompactor, such as Paducah, Ketucky, which has 37,000 tons of 

scrap metal that its current on-site compactor is incapable of crushing, 

according to the site’s senior contractor official responsible for LLRW 

management. 

• Addressing the impacts of recent state actions. Over the past 2 years, 

states’ regulatory and legal actions have restricted DOE’s access to 

disposal facilities, which compounds the challenges of coordinating and 
Page 7 GAO-06-94 Department of Energy

integrating disposal efforts departmentwide. For example, the state of 

Washington has sued to prevent LLRW from other DOE sites from being 

disposed of at the Hanford facility. Consequently, DOE is incurring 

increased costs for storage and treatment. 

To ensure the cost-effective management and disposal of LLRW, we are 

recommending that the Secretary of Energy take specific actions to ensure 

that DOE sites use complete, current, and well-documented life-cycle cost 

analyses in making LLRW management decisions, and develop and 

implement a strategy for managing LLRW disposal departmentwide. 

Overall, DOE generally agreed with our conclusions and thanked us for the 

recommendations. Specifically, DOE agreed that its sites are not 

consistently using life-cycle cost analysis in making LLRW management 

decisions. It also agreed that its current guidance and oversight in the area 

of life-cycle cost analysis for LLRW management decisions should be 

strengthened and expressed appreciation for our support of an effective 

National Disposition Strategy for LLRW management. DOE also provided 

technical comments on certain statements in the draft report with which it 

disagreed or wanted to clarify, which we incorporated as appropriate. 

Background Under the LLRW Policy Act of 1980, as amended, the federal government is 

responsible for the disposal of LLRW owned or generated by DOE. 8 DOE 

defines LLRW as all radioactive waste that does not fall within other 

classifications, such as spent (used) nuclear fuel and other high-level 

waste. Mixed waste is LLRW with hazardous components, such as lead and 

mercury. LLRW can include material of varying levels of radioactivity, from 

barely contaminated soil and debris to LLRW with enough radioactivity to 

require remote handling. LLRW can include items such as contaminated 

equipment, protective clothing, rags, and packing materials and is managed 

at multiple sites under a variety of contractors. (See app. I for a list of DOE 

sites that disposed of the majority of LLRW in fiscal years 2004 and 2005.) 

8

42 U.S.C. § 2021c(b).
Page 8 GAO-06-94 Department of Energy

DOE sites typically dispose of LLRW at (1) on-site facilities, if suitable 

capacity is available,9

 (2) DOE’s regional disposal facilities at the Hanford 

Site or the Nevada Test Site, or (3) a commercial facility.10 The selection of 

the disposal facility is based partly on the facility’s waste acceptance 

criteria. These criteria specify the allowable types and amounts of 

radioactive materials, and types of containers acceptable at the disposal 

facility. 

In 2000, we reported that DOE had not developed full life-cycle costs for its 

disposal facilities or established guidance to ensure that its contractors 

base their disposal decisions on departmentwide considerations of costeffectiveness, among other things.11 We also reported in 2001 that cost 

analyses concerning the use of DOE’s on-site disposal facilities should be 

periodically updated to take into account changing economic conditions.12

Subsequently, the House Committee on Appropriations directed DOE to 

prepare an objective analysis of the life-cycle costs of LLRW disposal for 

various federal and commercial disposal options.13 The committee was 

concerned that DOE needed to include in its life-cycle cost analysis certain 

cost elements, such as packaging, transportation, disposal, and postclosure 

maintenance and surveillance. 

In response, in its 2002 report to Congress on life-cycle cost analysis of 

LLRW disposal, DOE listed among its next steps for EM sites to consider 

the cradle-to-grave costs as they make LLRW management decisions. On 

July 18, 2002, EM issued guidance directing each site office to develop the 

mechanisms necessary to ensure that contractors’ LLRW disposal 

decisions include the best estimate of full cradle-to-grave costs and 

analysis of alternatives. Several other documents on life-cycle cost 

9

Sites with on-site disposal facilities include the Fernald Environmental Management 

Project (in Ohio), Hanford in Washington, Idaho National Laboratory, Los Alamos National 

Laboratory in New Mexico, Nevada Test Site, Savannah River Site in South Carolina, and the 

Oak Ridge site in Tennessee.

10Currently, Envirocare of Utah is the primary commercial option available for disposal of 

DOE’s LLRW.

11GAO/RCED-00-64.

12GAO, Nuclear Cleanup: DOE Should Reevaluate Waste Disposal Options Before Building 

New Facilities, GAO-01-441 (Washington, D.C.: May 2001).

13H.R. Rep. No. 107-112, at 135 (2001). A congressional conference committee later issued a 

similar directive. H.R. Rep. No. 107-258, at 133 (2001).
Page 9 GAO-06-94 Department of Energy

analyses are also available. For example, DOE has a cost-estimating guide, 

developed in the mid-1990s, that provides a chapter dedicated to life-cycle 

cost analysis, including definitions, processes, limitations, common errors 

made in life-cycle cost analysis, methods, examples, and diagrams.14 In 

addition, although not directly applicable to LLRW management, guidance 

and manuals prepared by other federal agencies for other DOE programs 

may be useful to the sites in explaining life-cycle cost analysis methods. 

For example, the National Institute of Standards and Technology has 

published two documents on life-cycle cost analysis that are applicable to 

DOE’s Federal Energy Management Program.15

DOE Sites Do Not 

Consistently Use LifeCycle Cost Analysis in 

Managing LLRW

DOE sites prepare various types of cost analyses in making LLRW 

management decisions, but these analyses do not consistently use 

complete, current, or well-documented life-cycle cost analysis to ensure 

that the lowest-cost LLRW management alternatives are identified. As a 

result, the decisions the sites make may not take into account the most 

cost-effective alternative. These inconsistencies have occurred, in large 

part, because DOE’s guidance lacks necessary detail and its oversight of 

contractor practices is weak. 

Site Cost Analyses Are Not 

Always Complete, Current, 

or Well Documented

Complete life-cycle cost analysis is cradle to grave and includes all costs 

associated with the management and disposal of LLRW. As DOE’s 2002 

report to Congress explained, the costs preceding disposal vary greatly and 

can be significantly greater than the actual cost of disposal. As a result, 

DOE concluded it is essential to consider pre-disposal costs as well as 

disposal costs. Table 1 shows the cost elements of a complete life-cycle 

cost analysis, according to DOE’s 2002 report. 

14Department of Energy, Cost Estimating Guide, DOE G 430.1-1 (Washington, D.C.: Mar. 28, 

1997).

15A handbook, most recently updated in 1996, helps explain the methodologies used in 

conducting life-cycle cost analysis. (Department of Commerce, Life-Cycle Costing Manual 

for the Federal Energy Management Program, NIST Handbook 135, 1995 Edition, 

Washington, D.C.: February 1996). In addition, guidance prepared in April 2005 clarifies how 

DOE should determine life-cycle costs for energy programs, as required by section 401 of 

Executive Order 13123. (National Institute of Standards and Technology [Prepared for 

DOE], Guidance on Life-Cycle Cost Analysis Required by Executive Order 13123, 

Gaithersburg, Maryland: National Institute of Standards and Technology, April 2005). 
Page 10 GAO-06-94 Department of Energy

Table 1: Cost Elements in Life-Cycle Cost Analysis and Associated Activities

Source: DOE.

a

Typically, DOE disposal facilities do not include past construction or future postclosure costs in their 

disposal fees because they operate on an annual appropriations basis. In contrast, Envirocare of Utah, 

a commercial operator, charges disposal fees that recoup such costs.

DOE LLRW generator sites we visited did not always include all life-cycle 

costs—including the postclosure costs of long-term maintenance and 

surveillance of the disposal site—and did not always consider alternative 

actions when deciding on how to manage and dispose of LLRW. For 

example, despite DOE’s guidance to include all disposal costs in its lifecycle cost analyses, DOE contractors at two sites—Rocky Flats, Colorado, 

and Paducah, Kentucky—did not consistently consider postclosure costs in 

the analyses supporting their LLRW disposal decisions for fiscal year 2004. 

In contrast, the contractor at Fernald, Ohio, prepared a life-cycle cost 

analysis that included estimated postclosure costs for both the Nevada Test 

Site and for Envirocare of Utah, a commercial disposal facility. Nevada Test 

Site officials told us they do not include these future costs in their disposal 

fees because they operate on an annual appropriated funds basis. Nevada 

Test Site officials estimated that if they were to include postclosure costs in 

their fee, these costs would add an additional $2.38 per cubic foot of waste 

Cost element Activities

Preparation The waste generator samples and analyzes the waste to ensure 

that it will be certified as acceptable to the disposal site—

actions also known as waste characterization. The generator is 

also responsible for treating the waste so that it is in a proper 

chemical and physical form to meet the disposal facility’s 

acceptance criteria. Treatment can include drying or 

compaction.

Packaging The generator is responsible for placing the waste—usually in 

the form of soil or debris—in containers or in bulk, such as in a 

railcar. The container type and cost vary with the characteristics 

of the waste.

Transportation The generator sends LLRW off-site, usually by truck or rail. 

According to DOE, truck shipments can cost up to 1.9 times the 

cost of rail shipments, depending on the packaging method, 

waste density, and routing.

Disposal The disposal facility operator receives and disposes of LLRW. 

Disposal facilities generally incur construction, operation, 

maintenance, and postclosure costs that they may pass on to 

waste generators through disposal fees. Postclosure activities 

are required to protect human health and the environment from 

hazards remaining after closure, and can include maintaining 

and repairing closure caps, monitoring environmental 

contamination, and erecting and maintaining barriers.a
Page 11 GAO-06-94 Department of Energy

to the fee. Envirocare of Utah, on the other hand, includes the estimated 

postclosure costs in its disposal fees, as required by the state of Utah. 

Costs for certain LLRW activities vary widely among disposal sites and 

should be considered in preparing life-cycle cost analysis. For example, 

EM’s 2002 report to Congress found that costs for one predisposal cost 

element—waste characterization—can be higher for wastes shipped to the 

Nevada Test Site and the Hanford Site for disposal than for wastes sent to 

Envirocare of Utah. Waste characterization costs for the two DOE sites 

ranged from $130 to $2,400 per cubic meter, while these same costs ranged 

from $30 to $880 per cubic meter at Envirocare of Utah. The major factors 

contributing to this cost differential are (1) required procedures for 

accepting, handling, and disposing of LLRW with higher levels of 

radioactivity at the Nevada Test Site and Hanford and (2) the higher cost to 

the generator of characterizing wastes that are shipped in containers to the 

Nevada Test Site and Hanford Site for disposal. Although waste 

characterization is an important element in life-cycle cost analysis, the 

Rocky Flats contractor did not include the costs of these activities in its 

cost analysis.

In addition, waste generators do not always include potential lower-cost 

alternatives when making LLRW decisions. For example, in fiscal year 

2004, the Paducah contractor shipped 600 cubic meters of LLRW in trucks 

to Envirocare of Utah. Although in its preliminary analysis, the site 

contractor believed that using rail could save 25 percent in transportation 

costs, contractor officials indicated they did not validate these preliminary 

assumptions or complete a formal cost analysis of the rail option. 

DOE contractors’ cost analyses are not always current. Despite DOE’s 2002 

recommendation that cost estimates should be revisited periodically, one 

DOE waste generator disposed of large volumes of LLRW in fiscal year 

2004 on the basis of cost studies completed several years earlier. 

Specifically, the contractor at Fernald acknowledged shipping over 100,000 

cubic meters of LLRW to Envirocare of Utah in fiscal year 2004, using a 

cost analysis completed in 1994. This analysis, while considering all lifecycle cost elements, had not been updated during this 10-year period to 

account for any changes that might have occurred in cost elements, such as 

changes in disposal rates, costs for packaging, treatment, or transportation. 

For example, disposal rates charged by Envirocare of Utah can change 

from year to year, based on price discounts offered for larger LLRW 

disposal volumes.
Page 12 GAO-06-94 Department of Energy

We also found that three of the five DOE sites that had expanded on-site 

facilities since 2002 did not complete an analysis comparing the life-cycle 

costs of on-site and off-site disposal alternatives. A 2001 congressional 

conference report requires DOE to perform such an analysis “before 

proceeding with any new on-site disposal cell.”16 DOE asserts that the 

report language does not apply to ongoing facility development or 

expansion. Officials at two sites indicated they did not believe they needed 

to complete such a life-cycle cost analysis because the expansion of their 

on-site disposal facility was already accounted for in the initial facility 

design, completed before 2002. The third site completed a life-cycle cost 

analysis of LLRW waste streams for its on-site facility. However, site 

officials did not complete a life-cycle cost analysis of off-site disposal 

because they assumed that the costs of off-site transportation and disposal 

would be significant enough to preclude the off-site option. Although the 

remaining two sites completed life-cycle cost studies comparing on-site 

and off-site disposal costs, these studies were not submitted to the 

congressional appropriations committees.

DOE contractors’ cost analyses are not always well documented. In some 

cases, we could not determine how contractors incorporated cost analyses 

into their disposal decisions because documentation was incomplete. 

According to DOE and contractor site officials at Rocky Flats, disposal 

decisions were at times based on noncost factors, such as schedule or 

safety. For example, a 2003 cost study determined that using trucks to 

transport building debris to a nearby rail loading area less than 1 mile away 

would be more cost-effective than extending a rail line to the building. 

However, contractor officials told us they decided to build a rail extension 

to the building being demolished because the extra traffic at the site caused 

by trucks hauling the LLRW to the rail line could endanger the health and 

safety of the workers. This decision, however, was not documented. 

Contractor officials at Rocky Flats agreed that such LLRW management 

decisions were not consistently documented to show the rationale for how 

cost was balanced against other factors. 

16H.R. Rep. No. 107-258, at 133 (2001). The five sites expanding their on-site disposal 

facilities since 2002 included the On-Site Disposal Facility at Fernald (Ohio), the Idaho 

CERCLA Disposal Facility at the Idaho National Laboratory, the TA-54 On-Site Disposal 

Facility at the Los Alamos National Laboratory, the Environmental Management Waste 

Management Facility at Oak Ridge, Tennessee, and the Engineered Trenches at the 

Savannah River Site in South Carolina. 
Page 13 GAO-06-94 Department of Energy

At other sites, cost analyses were informal and not documented. For 

example, contractor officials responsible for LLRW disposal at Paducah 

told us that they made some disposal decisions informally because they 

believed their knowledge of the factors involved made it unnecessary to 

complete a formal analysis. In addition, Oak Ridge contractor officials 

coordinating the removal of LLRW from the site told us they did not 

complete a formal analysis of disposal options for each waste stream 

because their contract did not require such an analysis. 

DOE’s 2002 Guidance Lacks 

Necessary Detail

DOE sites have not consistently used life-cycle cost analysis, in part 

because EM’s 2002 guidance memo on life-cycle cost analysis lacks the 

necessary detail for how and when to use it. Consequently, each site was 

responsible for deciding how to incorporate cost into its LLRW 

management decisions. For example, although EM’s guidance directed 

sites “to develop mechanisms necessary to establish that its LLRW disposal 

decisions include the best estimate of full ‘cradle to grave’ costs and 

analysis of alternatives,” the guidance did not do the following things:

• Lay out a systematic, consistent method for (1) analyzing all cost 

elements or (2) comparing key alternatives within these cost elements 

to determine the lowest cost. Consequently, as we found, analyses often 

did not include cost elements that might have altered a disposal 

decision. 

• Specify when or under what circumstances sites should prepare cost 

analyses. As we found, some sites did not update their analyses to show 

that their original LLRW management decisions were still supported by 

current economic conditions; 

• Refer sites to relevant DOE orders, manuals, or other reference 

materials that could provide consistent direction on life-cycle cost 

analysis. Such references could include, for example, the DOE order for 

real property asset management, the DOE manual on preparing lifecycle cost estimates, Office of Management and Budget guidance for 

completing a cost-effective analysis, and the National Institute of 

Standards and Technology guidance for completing life-cycle cost 

analysis, or portions of these documents.

• Lay out how final LLRW management decisions should be documented. 

For example, the guidance does not explain how sites should weigh 

disposal costs against noncost factors such as safety and health. As we 
Page 14 GAO-06-94 Department of Energy

found, without adequate documentation at some of the sites we visited, 

it was difficult for site contractors to justify the decisions they had 

made. 

DOE Has Not Taken Steps 

to Oversee Contractors’ Use 

of Life-Cycle Cost Analysis, 

Relying Instead on 

Incentive-Based Contracts 

to Ensure Cost-Effective 

LLRW Decisions

DOE site offices were ineffective in overseeing contractors’ use of lifecycle cost analysis, which also contributed to ineffective implementation of 

the guidance. At the sites we visited, neither DOE nor the contractors had 

taken identifiable steps to implement the guidance on life-cycle cost 

analysis. 

First, DOE has not incorporated life-cycle cost guidance into contracts. 

Most of the incentive-based contracts at the sites we visited require 

contractors to comply with DOE Order 430.1A on life-cycle asset 

management, which requires the use of life-cycle cost analysis. However, 

neither that order, nor its successor, DOE Order 430.1B, provide sufficient 

detail on life-cycle cost analysis definitions, methods, examples, or 

diagrams that would be useful in preparing such analyses. In contrast, 

DOE’s cost-estimating guide provides a chapter dedicated to life-cycle cost 

analysis.17 This chapter includes definitions, processes, limitations, a list of 

common errors made in life-cycle cost analysis, methods, examples, and 

diagrams. However, the estimating guide is not explicitly cited in DOE 

Order 430.1A or 430.1B, or in the site contracts. As a result, the contractor 

official responsible for controlling LLRW costs at Rocky Flats, for example, 

could not tell us whether the contractor used DOE’s cost-estimating guide, 

particularly the chapter on life-cycle cost analysis in LLRW management 

decisions, because he was not familiar with the guide.

Second, DOE field offices have not taken steps to implement guidance or to 

evaluate contractors’ use of life-cycle cost analysis. For example, 

contractor officials at Paducah were not aware of EM’s July 18, 2002, 

guidance memo on life-cycle cost analysis until we showed a copy to them 

at the time of our visit. In addition, in October 2002, DOE’s Rocky Flats 

Field Office sent a memo to its contractor, Kaiser-Hill Company, concerning 

this EM guidance. According to the memo, the department was already 

aware that the contractor used licensed commercial disposal facilities and 

that disposal decisions considered technical acceptability, schedule, and 

cost benefit; the field office therefore concluded that the mechanisms to 

17DOE G 430.1-1.
Page 15 GAO-06-94 Department of Energy

establish cost-effective disposal decisions by Kaiser-Hill were already in 

place and thus satisfied the intent of the EM guidance. However, we found 

no indication at any of the sites we visited that DOE officials had 

specifically assessed the contractor’s use of life-cycle cost analysis in 

making LLRW management decisions. 

When we brought our concerns to EM officials on the inconsistent use of 

life-cycle cost analysis at the sites, they responded that EM has relied on 

the use of incentive-based contracts to ensure contractors are making costeffective LLRW management decisions, rather than encouraging the use of 

life-cycle cost analysis. Incentive-based contracts provide specific 

incentives for specified performance outcomes, often driven by sitespecific goals and objectives in areas such as health, safety, schedule, cost, 

or other areas, as negotiated between DOE and the contractor. We 

recognize that incentive-based contracts might help DOE meet goals such 

as accelerated cleanup and that these contracts may, in some cases, reduce 

overall site costs. However, their use may not necessarily identify lowestcost waste management alternatives, unless the contract provides this 

specific focus. Since the department relies on incentive-based contracts, it 

is critical that the contract’s total estimated cost be based on, among other 

things, life-cycle cost analyses of LLRW management alternatives and that 

the contract specify the proper use of life-cycle cost analysis.

Without the proper use of life-cycle cost analysis in establishing and 

overseeing incentive-based contracts, DOE cannot be assured that the 

contractor has identified the lowest life-cycle cost alternatives for LLRW 

management. For example, the Rocky Flats contractor, operating under an 

incentive-based contract, prepared various analyses of transportation 

alternatives from 2000 to 2003, but these analyses did not comprehensively 

address sitewide LLRW disposal needs because they were incomplete and 

not updated. Specifically, two DOE contractor draft studies in 1999 and 

2000 indicated that adding rail as an alternative for shipping LLRW from 

Rocky Flats to off-site disposal facilities could save millions of dollars in 

transportation costs. Despite this cost-saving potential, the contractor 

decided in 2000 to rely exclusively on trucks for all Rocky Flats LLRW 

shipments. Subsequently, in 2002, the contractor analyzed transportation 

alternatives specifically for shipping certain contaminated LLRW soil offsite. Although the analysis concluded that using rail to transport this soil 

alone could save up to $216,000, the contractor continued using trucks 

exclusively in fiscal year 2003 and most of fiscal year 2004 to transport this 

waste to Envirocare of Utah. In 2003 the contractor determined that the 

total volume of this LLRW soil would be significantly higher than 
Page 16 GAO-06-94 Department of Energy

previously estimated, further increasing the cost-saving potential of using 

rail, but nevertheless did not update or formalize the analysis. Instead, the 

contractor decided to send the soil by rail only after determining that it 

would use rail for shipping debris from an altogether separate LLRW 

project at Rocky Flats. In September 2004, the site began to transport the 

LLRW soil by rail, after it had already sent over 4,200 truck shipments of 

soil to Utah in fiscal years 2003 and 2004. Use of rail instead of trucks to 

ship the LLRW soil might have saved the site over $4 million during fiscal 

year 2004. Comprehensive, complete, and current analyses of 

transportation alternatives for sitewide LLRW disposal needs might have 

better identified the lowest-cost transportation alternative, therefore 

providing an opportunity for reducing LLRW management costs for the site. 

In April 2005, as part of our ongoing engagement, we briefed the 

Subcommittee on Energy and Water Development, House Committee on 

Appropriations, on the preliminary results of our work. We stated that DOE 

LLRW generators were not consistently using life-cycle cost analyses in 

their disposal decisions because of poor guidance and weak oversight. One 

month later, in its report to accompany the fiscal year 2006 energy and 

water appropriations bill, the full Appropriations Committee emphasized 

its intention to have DOE use life-cycle cost analysis in LLRW management 

decisions. Using our preliminary findings, the committee noted its concern 

with the department’s reliance on incentive-based contracts as a 

mechanism for ensuring cost-effective decision making rather than using 

life-cycle cost analyses, as directed.18

According to the committee, while contractors should pursue costeffective cleanup activities at their sites, it is up to the federal management 

responsible for those contractors to provide guidance and make decisions 

that benefit the whole DOE complex. As such, the committee directed the 

Secretary of Energy to report to the committee within 30 days of enactment 

of the 2006 Energy and Water Development Appropriations Act, on the 

specific steps the department will take to ensure that contractors use lifecycle cost analysis in considering LLRW options, and that DOE maintains a 

viable oversight function to oversee the implementation of such guidance. 

The committee further recommended that a third of EM’s budget for 

18H. R. Rep. No. 109-86, at 147-148 (2005).
Page 17 GAO-06-94 Department of Energy

managing the cleanup program, or $82,924,000, be withheld until after the 

Secretary of Energy delivers a report to the committee.19

DOE Faces Challenges 

in Developing a 

National LLRW 

Disposition Strategy

To better coordinate disposal efforts among sites and program offices, 

increase efficiencies, and minimize life-cycle costs, DOE has begun 

developing a national LLRW disposition strategy. Although DOE expects to 

begin implementing this strategy by March 2006, specific schedules have 

not yet been established for when the strategy will be fully in place, and it 

faces several significant challenges. These include developing a database 

that can be used to manage LLRW complexwide and overcoming 

organizational obstacles created by the department’s varied missions. 

DOE Expects to Begin 

Implementing a 

Departmentwide Strategic 

Plan for Disposing of LLRW 

in 2006

DOE has recognized that its current approach---having each site 

responsible for developing mechanisms necessary to control costs—may 

result in cost inefficiencies and could limit its ability to meet 

departmentwide strategic objectives, such as accelerated waste cleanup 

and site closure. To overcome these problems, EM has begun developing a 

National Disposition Strategy, which it plans to implement in 2006. EM 

plans to use the strategy to evaluate predisposal, storage, treatment, and 

disposal options across the department. The focus of the strategy will be on 

DOE LLRW that is shipped off-site for disposal and on waste for which 

DOE currently has no treatment or disposal options. EM hopes to make 

specific recommendations regarding waste without treatment or disposal 

options, develop a LLRW database, and reduce predisposal costs. To 

implement a successful strategy, EM expects to integrate sites’ waste 

disposition plans by (1) identifying and quantifying LLRW by waste 

category and site, (2) developing potential treatment and disposal options, 

and (3) identifying federal and commercial site capabilities for disposal of 

LLRW. DOE has not yet established specific schedules for when the 

strategy will be fully in place.

EM plans to develop this national disposition strategy in two phases. In 

Phase I, EM will examine those DOE sites that now have significant 

quantities of EM LLRW, including Oak Ridge, Savannah River, Idaho 

19H.R. Rep. No. 109-86, at 151 (2005).
Page 18 GAO-06-94 Department of Energy

National Laboratory, Hanford (including the Office of River Protection),20

Fernald, Portsmouth (in Ohio), and Paducah (in Kentucky). DOE will also 

take into account LLRW requiring disposal from fiscal year 2005 to about 

fiscal year 2035. In Phase II, EM will examine the LLRW managed by other 

DOE program offices, such as NNSA and the Office of Science. Efforts in 

Phase II will require considerable coordination among different DOE 

program offices. 

DOE Lacks 

Departmentwide Data on Its 

LLRW Inventory 

To develop and implement its national strategy for LLRW disposition, DOE 

needs basic data—both current and forecasted—from individual sites on 

their disposition plans. However, EM does not have complete data, either 

for its own sites or for non-EM sites with LLRW. Although DOE continues 

to report progress in disposing of LLRW, the LLRW volumes it reports as 

needing disposal are not complete. EM’s databases do not include all LLRW 

expected to be generated in the future as part of ongoing environmental 

cleanup or waste produced by non-EM generators. This information may be 

time-consuming and costly to obtain from the different program offices. 

For example, when we sought information on current and forecasted LLRW 

volumes from the Office of Science, NNSA, and the Office of Nuclear 

Energy, Science, and Technology (Nuclear Energy), only the Office of 

Science provided the requested information. NNSA and Nuclear Energy did 

not provide this information because, according to officials from each of 

these program offices, the information was not readily available. 

Regarding cost information, EM’s 2002 report to Congress recommended 

that DOE sites consider all life-cycle costs in evaluating alternatives for 

LLRW management, but it cautioned that DOE’s data collection and 

reporting processes needed to be improved to make any departmentwide 

cost analyses useful. EM officials stated that they will consider LLRW costs 

in their National Disposition Strategy. Currently, according to EM, DOE 

does not have uniform requirements for defining, monitoring, and reporting 

waste disposal costs, and sites may differ significantly in their protocols for 

collecting cost information. However, EM agrees that if DOE is to use lifecycle cost analysis to improve the bases for sites’ disposal decisions, 

standardized protocols for collecting and reporting the data would have to 

be established. 

20In accordance with 50 U.S.C. § 2622, the Office of River Protection was established in 1998 

to manage the Department of Energy's largest, most complex environmental cleanup 

project: Hanford tank waste retrieval, treatment, and disposal.
Page 19 GAO-06-94 Department of Energy

DOE recognizes these problems and has begun to develop some 

information it needs to support the evolving disposition strategy. 

Specifically, DOE is determining (1) what data it needs; (2) whether it can 

use the data in existing databases or has to develop a new database; and (3) 

how these data should be organized in a database.

DOE’s Organization and 

Multiple Missions Pose 

Challenges to Developing a 

National Strategy

EM’s ability to develop an integrated strategy for managing LLRW is further 

complicated by the fact that DOE has multiple program and site offices 

with different missions, and these offices oversee a variety of site 

contractors who manage waste with many different characteristics. 

DOE’s experience with the use of a supercompactor at its Oak Ridge site 

illustrates the difficulty EM faces in developing a waste disposition strategy 

that covers multiple program offices. At this site, EM and NNSA program 

offices have their own contractors that are responsible for various 

activities, including managing or disposing of LLRW. In 1997, DOE awarded 

BNFL a 6-year fixed-price contract to decontaminate and decommission 

three buildings once used to enrich uranium at the Oak Ridge gaseous 

diffusion plant.21 These buildings comprised more than 4.8 million square 

feet and housed more than 328 million pounds of material. To dispose of 

this waste, BNFL had constructed a supercompactor, the largest of its type 

in the nuclear industry. Using this supercompactor, the contractor was able 

to reduce the volume of several thousand tons of LLRW by 75 percent and 

save an estimated $100 million in LLRW management and disposal costs. 

Despite the supercompactor’s potential for reducing LLRW volumes and 

lowering costs for the other program offices at the Oak Ridge site, the 

contractor, with the approval of the DOE site office, decided in 2004 to 

dismantle the supercompactor and ship it as LLRW to Envirocare of Utah 

for disposal.

According to NNSA officials at the Y-12 Plant, also located at the Oak Ridge 

site, they have contaminated buildings that need to be dismantled and 

disposed of, but neither DOE nor the contractor consulted with NNSA 

officials about the potential use of the supercompactor for NNSA’s ongoing 

compacting needs. Similarly, contractor officials at EM’s Paducah Site in 

Kentucky, which is about 300 miles away, stated that they might have 

benefited from the use of the supercompactor but were not given the 

21In 2005, BNFL changed its name to British Nuclear Group of America.
Page 20 GAO-06-94 Department of Energy

opportunity to consider alternatives to its disposal. For example, Paducah 

had about 37,000 tons of remaining scrap metal, as of June 26, 2005, that its 

current on-site compactor is incapable of crushing, according to a 

contractor official at the Paducah site. 

A DOE official at the Oak Ridge site stated that it would probably not be 

cost-effective to ship debris to the supercompactor from other sites, and 

the supercompactor could not cost-effectively be relocated. However, 

neither DOE nor contractor officials provided any documentation of cost 

analysis to support this statement. Although the dismantling, shipping, and 

disposal of the supercompactor may have been the correct decision, DOE 

did not conduct a departmentwide assessment of volume reduction needs 

and capabilities, and the costs or potential obstacles associated with 

maintaining or moving the supercompactor under various LLRW 

management alternatives. Consequently, DOE may have missed a potential 

cost-saving opportunity. Oak Ridge officials told us that they are currently 

developing an integrated disposition plan to better coordinate LLRW 

management activities specifically for the Oak Ridge site. According to 

DOE, other integrated activities underway at Oak Ridge include, among 

other things, a pilot program between EM and the Office of Science to 

dispose of LLRW that needs no further storage or processing. 

Litigation and State Actions 

Can Affect DOE’s Waste 

Management Options

As a result of lawsuits and state regulatory and legislative actions in two 

states—Washington and Nevada—DOE cannot currently rely on either of 

its federal disposal facilities—Hanford or the Nevada Test Site—to dispose 

of mixed LLRW. Consequently, DOE is incurring increased costs for storage 

and treatment. Texas may provide DOE with new disposal options, but not 

sooner than December 2007. Specifically:

• In July 2004, Washington state asked a U.S. district court to prohibit 

DOE from sending LLRW from other DOE sites to Hanford for 

disposal.22 DOE voluntarily suspended LLRW shipments pending the 

court’s decision. In May 2005, the court ruled in favor of the state, 

issuing a preliminary injunction prohibiting DOE from sending LLRW 

from other sites to Hanford for disposal.23 In addition, in November 

22Washington asserted, among other things, that DOE did not comply with the National 

Environmental Policy Act of 1969 and implementing regulations.

23Washington v. Bodman, 2005 WL 1130294 (E.D. Wash. May 13, 2005).
Page 21 GAO-06-94 Department of Energy

2004, Washington state voters passed an initiative, now incorporated in 

Washington state law, that would prohibit DOE from accepting out-ofstate waste until existing waste at Hanford is cleaned up.24 The scope 

and constitutionality of the initiative are currently being litigated in 

federal district court.25 DOE officials told us that its inability to ship 

mixed LLRW to Hanford from other states is increasing costs and may 

delay cleanup and closure plans at several sites. For example, at Rocky 

Flats, approximately 1,000 cubic meters of mixed LLRW, intended for 

disposal at Hanford, instead had to be shipped off-site for commercial 

treatment, temporary storage, and eventual disposal at Envirocare of 

Utah to avoid delaying site cleanup; the Rocky Flats contractor 

estimates incremental storage, handling, treatment, and disposal costs 

of this LLRW may exceed $8 million. 

• In Nevada, as of August 2005, DOE was still awaiting approval from 

state regulators for a permit to dispose of, at the Nevada Test Site, 

mixed LLRW from other sites.26 After DOE filed its permit application in 

December 2000, Nevada objected to DOE’s planned method of disposal. 

DOE is working with the state regulators to achieve a mutually 

agreeable resolution, and state officials indicate this issue could be 

resolved by the end of 2005. Until DOE receives this permit, DOE cannot 

dispose of mixed LLRW generated at other sites at the Nevada Test Site. 

• In 2004, the Nevada Attorney General objected to DOE’s plan to ship 

certain LLRW from DOE’s Fernald, Ohio, site for disposal at the Nevada 

Test Site, asserting in a letter to DOE that the plan violated federal law 

and regulations. Pending a resolution of these issues, DOE signed a $7.5 

million contract in April 2005 with a commercial facility in Texas to 

temporarily store 6,800 cubic meters of this LLRW for up to 2 years. 

• Texas may provide DOE with additional storage options. In February 

2005, the state approved a license amendment for Waste Control 

Specialists to enlarge its LLRW storage facility. In addition, the state has 

24Initiative 297, the Cleanup Priority Act, is now codified in chapter 70.105E of the Revised 

Code of Washington.

25United States v. Hoffman, No. CV-04-5128-AAM (E.D. Wash. filed Dec. 1, 2004). The U.S. 

district court certified questions of state law to the Washington Supreme Court, which 

issued its ruling on July 28, 2005. United States v. Hoffman, 116 P.3d 999 (Wash. 2005). 

26At the Nevada Test Site, the hazardous components of mixed wastes are regulated by the 

State of Nevada under the Resource Conservation and Recovery Act of 1976, as amended.
Page 22 GAO-06-94 Department of Energy

begun a technical review of WCS’s application for a LLRW disposal 

facility license, which could be issued by December 2007. 

Conclusions Given the large volumes of LLRW generated by DOE activities, it is 

imperative that DOE recognize the importance of life-cycle cost analysis in 

identifying the most cost-effective alternatives for managing LLRW and 

then weighing the cost of these alternatives against noncost factors, such 

as safety and schedule. However, EM’s July 2002 guidance on life-cycle cost 

analysis did not include information on how or when such an analysis 

should be completed. Moreover, the department has not performed 

oversight to ensure that contractors are completing life-cycle cost analyses. 

EM has elected not to encourage the use of life-cycle cost analysis in 

making LLRW management decisions, relying instead on incentive-based 

contracts to ensure contractors are making cost-effective decisions. 

However, we believe that this contract mechanism does not necessarily 

ensure that contractors identify the lowest-cost LLRW management 

options. Without complete, well-documented life-cycle cost analysis, EM 

may be overlooking cost-saving opportunities that could have resulted 

from pursuing alternative disposal options. Furthermore, this lack of 

transparency diminishes confidence in DOE’s ability to ensure that 

contractors have considered life-cycle costs, regardless of whether the 

lowest-cost alternative is selected. 

Although DOE has been disposing of LLRW for decades, it still lacks an 

integrated national strategy for doing so. Such a departmentwide strategy 

is crucial for ensuring that LLRW management needs throughout DOE are 

identified and addressed in a cost-effective manner that also meets other 

departmental goals, such as timely site cleanup. Specifically, an integrated 

approach could help consolidate similar types of LLRW to obtain 

economies of scale and lower per-unit disposal costs across the complex. 

DOE will need to develop basic information on LLRW volumes 

departmentwide and by program office, and to overcome the challenges 

posed by DOE’s complex organization and multiple missions, and recent 

state actions. 

Recommendations for 

Executive Action

To promote cost-effective LLRW management, we are recommending that 

the Secretary of Energy take the following four actions:
Page 23 GAO-06-94 Department of Energy

• Prepare comprehensive guidance on life-cycle cost analysis that, at a 

minimum, specifies (1) a systematic, consistent method of analyzing all 

cost elements or of comparing key alternatives within these cost 

elements to determine the lowest cost; (2) when and under what 

circumstances sites should prepare cost analyses; (3) relevant DOE 

orders, manuals, or other reference materials that should be consulted 

to provide consistent direction on how and when to perform the 

analysis; and (4) how final LLRW management decisions should be 

documented to demonstrate that life-cycle cost factors were adequately 

weighed against noncost factors, such as safety, health, or schedule. 

• Incorporate the revised life-cycle cost guidance into new or existing site 

contracts or into the departmental orders cited in those contracts.

• Direct DOE to oversee contractors to ensure that site contractor 

officials properly use life-cycle cost analyses in evaluating LLRW 

management alternatives. 

• Actively promote and monitor the development of a timely, national 

LLRW management strategy that is based on departmentwide data on 

LLRW needing disposal, and ensure that the implementation of the 

strategy is fully carried out.

Agency Comments and 

Our Evaluation

We provided DOE with a draft of this report for review and comment. 

Overall, DOE generally agreed with our conclusions and thanked us for the 

recommendations, but disagreed with or wanted to clarify certain 

statements in the draft report and provided technical comments, which we 

incorporated as appropriate. Specifically, DOE agreed that its sites are not 

consistently using life-cycle cost analysis in making LLRW management 

decisions. It also agreed that its current guidance and oversight in the area 

of life-cycle cost analysis for LLRW management decisions should be 

strengthened and noted that it is currently reevaluating its guidance 

documents and their implementation. In addition, DOE expressed 

appreciation for our support of an effective National Disposition Strategy 

for LLRW management, and expects this strategy to be available by March 

2006. 

DOE also provided comments on several specific statements in our report. 

First, DOE disagreed with our statement on the lack of an effective, 

integrated approach for LLRW management at Oak Ridge and offered 

examples of integration, which we have incorporated into our report. 
Page 24 GAO-06-94 Department of Energy

Nonetheless, we found that not all LLRW activities at Oak Ridge were 

integrated into a sitewide LLRW management strategy. For example, NNSA 

officials told us their future need to decontaminate and decommission 

numerous buildings on the site had not yet been included in any sitewide 

LLRW management strategy. 

Second, in its technical comments, DOE stated that our discussion of the 

supercompactor at Oak Ridge was misleading and did not agree that cost 

savings would have been realized if the supercompactor had been retained 

and redeployed to another site. We believe that our discussion of the 

supercompactor is accurate. It was intended to illustrate the difficulty EM 

faces in developing a waste disposition strategy that covers multiple 

program offices. In its technical comments, DOE told us that the contractor 

at Oak Ridge completed a cost analysis and decided that the 

supercompactor should not be reused. Nevertheless, neither DOE nor 

contractor officials provided us with any documentation of a cost analysis 

to support the dismantling and disposition of the supercompactor. DOE 

also told us that the contractor who owned the supercompactor and Oak 

Ridge management “openly solicited” other contractors in the complex 

about potentially reusing the supercompactor but did not find any interest. 

However, NNSA officials at Oak Ridge told us that neither DOE nor the 

contractor consulted with them about the potential use of the 

supercompactor, and the contractor at Paducah told us that it might have 

benefited from the supercompactor but was not given the opportunity to 

consider alternatives to its disposal. 

Finally, DOE also stated that the lack of consistency that we found in 

implementing cost guidance and preparing formal documentation should 

not be interpreted to mean that the department’s waste disposal systems 

are necessarily inefficient or overly expensive, and asserted that flexibility 

is needed in the level of detailed cost analysis required. However, we did 

not conclude that the lack of consistent implementation and the lack of 

documentation was indicative of an inefficient or overly costly LLRW 

management system. Rather, we stated that we could not determine how 

contractors incorporated costs analyses into their disposal decisions 

because documentation did not exist or was incomplete. Conclusions 

cannot be drawn about the cost-effectiveness of LLRW management 

decisions if contractors do not adequately document their decisions for not 

using life-cycle cost analysis and DOE does not require them to do so. 

While we would agree that flexibility may be important in determining the 

level of cost analyses required, we believe this flexibility should be 
Page 25 GAO-06-94 Department of Energy

accompanied by proper documentation to support the level of analysis 

completed and the degree to which life-cycle cost principles were followed.

DOE’s comments on our draft report are presented in appendix II.

We are sending copies of the report to the Secretary of Energy, the Director 

of the Office of Management and Budget, and appropriate congressional 

committees. We will make copies available to others on request. In 

addition, the report will also be available at no charge on the GAO Web site 

at http://www.gao.gov. 

If you or your staff have any questions about this report, please call me at 

(202) 512-3841. Contact points for our Office of Congressional Relations 

and Public Affairs may be found on the last page of this report. Other staff 

contributing to this report are listed in Appendix III.

Gene Aloise

Director, Natural Resources

and Environment
Page 26 GAO-06-94 Department of Energy

Appendix I

Disposed Waste Volume by Major DOE Apendxies

Generator Sites, Fiscal Year 2004 through 

Second Quarter, Fiscal Year 2005 ApendxiI

Source: DOE waste generator sites and EM headquarters.

Note: We identified 40 Department of Energy (DOE) waste generators for the period we examined. 

We list in this table the 13 generators with the highest volume of waste disposed off-site during this 

period. These 13 generators accounted for over 97 percent of DOE’s low-level radioactive waste 

(LLRW) volume disposed of off-site for the 18-month period.

Waste volume in cubic meters

Generator 

site/contractor

Total waste

disposed off-site,

fiscal year 2004

Total waste disposed

off-site, October

2004-March 2005

Total waste

disposed for 18-

month period

Rocky Flats/Kaiser 

Hill 118,460 63,940 182,400

Fernald/Fluor Fernald 102,343 68,495 170,838

Mound/CH2M Hill, 

Mound 43,554 55,534 99,088

Oak Ridge 

ETTP/BNFL 37,502 9,278 46,780

Knolls Atomic Power 

Laboratory/Nuclear 

Fuel Services 21,208 3,432 24,640

Oak Ridge 

Reservation/Bechtel 

Jacobs 9,658 7,686 17,344

Portsmouth/Bechtel 

Jacobs 11,038 3,644 14,682

Brookhaven National 

Lab/ Brookhaven 

Science Associates 4,199 8,436 12,635

Paducah/Bechtel 

Jacobs 9,690 268 9,958

Oak Ridge National 

Laboratory/

University of 

Tennessee/Battelle 440 4,984 5,424

Ashtabula/RMI 

Titanium 4,056 0 4,056

West Valley/West 

Valley Nuclear 

Services 1,124 2,042 3,166

Oak Ridge Y12/BWXT 2,485 400 2,885

Remaining generator 

sites (27) 12,508 5,461 17,969

Total 378,265 233,600 611,865
Page 27 GAO-06-94 Department of Energy

Appendix II

Comments from the Department of Energy ApendxiI
Appendix II

Comments from the Department of Energy

Page 28 GAO-06-94 Department of Energy
Page 29 GAO-06-94 Department of Energy

Appendix III

GAO Contact and Staff Acknowledgments ApendxiI

GAO Contact Gene Aloise (202) 512-3841

Staff 

Acknowledgments

In addition to the individual named above, Daniel Feehan, Doreen 

Feldman, Thomas Kingham, Mehrzad Nadji, Omari Norman, Christopher 

Pacheco, Judy Pagano, Carol Herrnstadt Shulman, and Peter Zwanzig made 

key contributions to this report.

(360488)
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