January 2001 Major Managem

Challenges and 

Program Risks

Department of Energy

GAO-01-246

Page 1 GAO-01-246 

Letter 

Overview 

Major 

Management 

Challenges and 

Program Risks: 

Department of 

Energy

Related GAO 

Products

Performance 

and 

Accountability 

Series
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of th

Page 3 GAO-01-246 

United States General Accounting Office

Washington, D.C. 20548

January 2001

The President of the Senate

The Speaker of the House of Representati

This report addresses the major performa

accountability challenges facing the Depa

Energy (DOE) as it seeks to maintain the 

nuclear weapons capabilities, clean up th

contamination resulting from prior nuclea

activities, foster a reliable and sustainable 

system, and support continued U.S. leade

science and technology. It includes a sum

actions that DOE has taken and that unde

address these challenges. It also outlines f

that GAO believes are needed. This analys

the new Congress and administration carr

responsibilities and improve government 

of the American people.

This report is part of a special series, first 

January 1999, entitled the Performance an

Accountability Series: Major Management 

and Program Risks. In that series, GAO ad

Congress that it planned to reassess the m

and criteria used to determine which fede

government operations and functions sho

highlighted and which should be designat

risk.” GAO completed the assessment, con

comments provided on a publicly availabl

draft, and published its guidance docume

Determining Performance and Accountab

Challenges and High Risks (GAO-01-159SP

November 2000.

This 2001 Performance and Accountabilit

contains separate reports on 21 agencies—
Page 4 GAO-01-246 DO

each cabinet department, most major indepe

agencies, and the U.S. Postal Service. The se

includes a governmentwide perspective on p

and management challenges across the fede

government. As a companion volume to this 

is issuing an update on those government op

and programs that its work identified as “hig

because of either their greater vulnerabilitie

fraud, abuse, and mismanagement or major c

associated with their economy, efficiency, or 

effectiveness.

David M. Walker

Comptroller General 

of the United States
Page 5 GAO-01-246 
Page 6 GAO-01-246 

The Department of Energy’s (DOE) missio

maintain the nation’s nuclear weapons cap

clean up the contamination resulting from 

weapons activities, foster a reliable and su

energy system, and promote U.S. leadersh

and technology. DOE also works with the 

of Defense and State to help prevent the p

nuclear weapons and other weapons of m

destruction. In the post-Cold War environm

U.S. nuclear weapons materials and inform

remains vital to U.S. national interests. 

To carry out its missions, DOE has been a

about $17 billion annually in recent years a

16,000 federal employees. The Departmen

than 50 major facilities in 35 states. DOE 

the management and operation of its majo

including its national laboratories, nuclea

production facilities, and those facilities u

environmental cleanup—and has more th

prime contractor employees at its facilitie

1999, DOE obligated about $15.5 billion to 

Over the past several years, GAO, congres

committees, and others have questioned D

management practices and effectiveness i

its missions and have made many recomm

corrective actions. To address long-standi

management and security problems at DO

facilities, a legislatively mandated reorgan

DOE’s defense and national security prog

effect in the spring of 2000. 

While DOE has made improvements in its 

the Department continues to face signific

performance and accountability challenge

the following inset. The underlying causes 

challenges include problems with DOE’s o

alignment and control, planning, budget fo
Page 7 GAO-01-246 

execution, human capital, and contract an

management. Many of the challenges that 

achieving its goals and objectives are long

sustained management attention will be n

correct these weaknesses and implement 

improvements over the long term. DOE’s p

addressing these challenges will significan

its ability to efficiently and effectively car

defense and national security responsibili

environmental cleanup program.

Nuclear Weapons 

Stockpile

With the end of the Cold War, a moratoriu

testing was declared, and in its place, DOE 

Stockpile Stewardship Program to develo

• Address project management, planning, an

issues to maintain nuclear weapons capab

• Sustain management attention to correct pe

weaknesses in security controls

• Improve priority-setting of nonproliferation p

and coordination among programs in the fo

Soviet Union

• Improve management tools and integration 

activities to clean up radioactive and hazard

wastes

• Resolve problems in contract management 

place it at high risk for fraud, waste, abuse, 

mismanagement 

• Improve financial management
Page 8 GAO-01-246 DO

and computer modeling capability to certify 

weapons are safe and reliable without explo

and to ensure the availability of replacement 

components for weapons. DOE faces manag

planning and budgeting, organizational align

human capital challenges as it maintains the 

weapons stockpile. DOE’s Office of Inspecto

recommended in a September 2000 report th

develop an overall weapons production infra

restoration plan because the deterioration of 

infrastructure had, among other things, resu

delays in the remanufacturing of weapons pa

December 2000 report on the Stockpile Stew

Program, we noted that DOE has made impro

its planning and budgeting for the program, a

made a number of recommendations to furth

program integration, contract performance c

budget decision-making. 

DOE had also made changes to improve its 

organizational alignment to better define line

authority but acknowledges that more needs 

to clarify the roles and responsibilities of he

and field staff. Finally, the Stockpile Steward

Program is faced with a shortage of skilled m

and technical staff, and since skilled staff are 

and the job market is extremely competitive

believe that staffing shortages will reach cris

proportions by the end of this decade. While 

taking actions to address all these challenge

successful and timely implementation is crit

ensuring an effective and efficient program t

aging nuclear weapons. 

Security Concerns DOE’s nuclear weapons facilities and the peo

work there are potential targets of espionage 

security threats. Numerous studies have iden

pervasive weaknesses in DOE’s security con

reports have highlighted weaknesses in acce
Page 9 GAO-01-246 

computerized information systems, progra

visitors to DOE’s national laboratories, an

counterespionage measures for foreign tr

contractor personnel. We have made reco

for strengthening controls over foreign tra

contractor employees, who are sometime

attempted espionage, and improving the m

and oversight of information technology s

While DOE has responded to many of the 

recommendations made by others and us 

to strengthen its security controls, the De

not always followed through to ensure tha

improvements are consistently implemen

example, while DOE initially expanded th

background checks for foreign visitors to 

laboratories in response to our 1988 revie

granted exemptions for two of its laborato

Consequently, these laboratories conducte

checks on a smaller percentage of their vi

sensitive countries in 1997 than they had i

the establishment in March 2000 of the Na

Security Administration, which reorganize

defense and security missions, DOE has a 

opportunity to improve security and effec

change. As noted in our April 1999 testimo

management needs to devote sustained at

changing DOE’s culture, which has not giv

priority to security matters. 

Nonproliferation 

Issues

DOE conducts several programs to help R

other newly independent states of the for

Union control weapons of mass destructi

chemical, and nuclear) and prevent their p

The recent economic and political change

independent states have left weapons-usa

materials vulnerable to theft or diversion. 

weapons scientists facing reduced econom

circumstances may be tempted to sell the
Page 10 GAO-01-246 DO

terrorists or countries of proliferation conce

Reducing these risks is a high priority for U.

security. 

DOE’s programs to secure weapons-grade m

create other jobs for former weapons scienti

been in existence for less than a decade. The 

Department has improved these programs as 

gained experience and responded to our 

recommendations for, among other things, en

funding to enhance civilian job opportunities 

to those who have been involved in weapons 

destruction. 

Nonetheless, the nonproliferation programs 

made more effective by (1) obtaining better 

facilities and information in the newly indep

states to improve priority-setting, (2) verifyin

program funds, and (3) coordinating the sev

programs to increase their effectiveness. For 

access to facilities and information were imp

DOE’s program to install security systems to 

nuclear weapons-grade materials could bette

sensitive Russian facilities that contain over 

of these materials. 

Environmental 

Cleanup

DOE has large volumes of radioactive and ha

wastes and contaminated facilities from 50 y

nuclear weapons research and production ac

Many of the projects to clean up these enviro

hazards are inherently complex and may req

technologies and decades of work. Sound m

practices are needed to bring such complex 

completion on time and within budget. Over 

several years, DOE has improved its project 

and management by establishing baselines, w

the scope of work, estimate costs, and speci

schedules. 
Page 11 GAO-01-246 

However, DOE still faces significant mana

challenges, such as integrating waste treat

transportation, and disposal activities am

with active cleanup work remaining. For e

have recommended that DOE develop cri

guidance to increase the cost-effectivenes

regarding options for waste treatment, sto

disposal. Integrating work among DOE’s s

its sites that carry out multiple programs 

the estimated $200 billion cost of the clea

cleanup of environmental hazards, and re

for duplicate facilities and activities. 

Contract 

Management

Contract management also continues to b

challenge for DOE. We first designated DO

management as a high-risk area in 1990 an

believe that contract management—contr

administration and project management—

for fraud, waste, abuse, and mismanagem

contract management is vital for DOE bec

Department relies heavily on contractors 

national security, research, and environm

missions. 

Yet DOE continues to have difficulty in ke

its major projects on schedule and within 

example, a facility being constructed to ev

weapons has a cost overrun of about $1 b

schedule overrun of 6 years. We recommen

arrange for an outside technical review of 

remaining technical challenges related to 

schedule risks. In addition, DOE has utiliz

strategies that have not accomplished pro

For example, we concluded that, while fix

contracting had been successful for some 

a known scope, it had generally not accom

goals for complex cleanup projects. 
Page 12 GAO-01-246 DO

DOE has begun a number of initiatives in co

management and has made progress in this a

too soon to tell whether the initiatives will b

in the long run. DOE has increased the propo

major contracts awarded competitively, for i

from 9 percent of its major contracts in 1990 

percent as of September 2000. However, som

larger contracts for operating its national lab

continue to be extended rather than compet

also has initiatives to align performance ince

contractors more closely with DOE’s strateg

a site but did not know whether performanc

contracting was improving performance and 

costs. 

Financial 

Management

DOE’s financial management could be impro

February 2000 audit report on DOE’s consoli

financial statements for fiscal year 1999, DOE

Inspector General reported a material weakn

concerning operational deficiencies in the fi

management system for DOE’s Western Area 

Administration. Although the Western Area P

Administration developed a corrective action 

these deficiencies, DOE’s Office of Inspector 

reported in November 2000 that the power 

administration was still experiencing delays i

its fiscal year 1999 financial information for a

identified a reportable condition concerning 

of environmental liabilities for contaminated 

surplus facilities. The Office of Inspector Ge

recommended that DOE’s Chief Financial Of

develop procedures for verifying data about 

facilities, which DOE management agreed to 
Page 13 GAO-01-246 

gp

of Energy

DOE’s missions are important to providin

security, U.S. leadership in science and te

a reliable, sustainable energy supply. App

two-thirds of DOE’s budget is devoted to (

national security programs and (2) enviro

cleanup and quality. DOE is responsible fo

nuclear weapons by certifying their reliab

replacing their components. In carrying ou

DOE must keep nuclear weapons informa

materials secure from such threats as esp

terrorism. DOE’s role in preventing the pr

nuclear and other weapons of mass destru

in the post-Cold War era. In addition, DOE

produce the nation’s nuclear arsenal has l

environmental hazards needing cleanup; 4

located in 17 states still require active clea

DOE Needs to 

Address Project 

Management, 

Planning, and 

Other Issues to 

Effectively and 

Efficiently 

Maintain Nuclear 

Weapons 

Capabilities

With the end of the Cold War, a moratoriu

testing was declared. As an alternative to 

DOE created the Stockpile Stewardship P

certify that nuclear weapons are safe and 

program poses significant management ch

ensuring the availability of components vi

Department’s nuclear weapons program; r

replacing DOE’s aging facilities; and build

state-of-the-art experimental facilities. DO

challenges to improve the following aspec

Stockpile Stewardship Program: planning 

activities, resolving significant organizatio

and establishing clear lines of authority, a

and training the next generation of weapo

and technicians (human capital issues). D

successful resolution of these challenges 

that the nation continues to have a strong 

nuclear weapons program.
Page 14 GAO-01-246 DO

Management 

Challenges

As part of its Stockpile Stewardship Program

ensure that the nuclear weapons production 

infrastructure is adequately maintained, that 

weapon components are available when nee

that surveillance testing of nuclear weapons 

components is carried out. DOE must also e

experimental state-of-the-art testing facilitie

on time and within budget. However, inadeq

maintenance planning and investment have l

infrastructure’s deterioration. Furthermore, 

management and ineffective DOE oversight 

contractors have increased the costs and ext

schedules for a major construction project. A

meeting the goals of the Stockpile Stewardsh

may be difficult for DOE. 

DOE’s Office of Inspector General reported i

September 2000 that the current and future g

Stockpile Stewardship Program are at risk b

nuclear weapons production infrastructure h

adequately maintained.1

 The report noted tha

existing data suggested that current military 

requirements were being met, the deteriorat

infrastructure had resulted in, among other t

delays in the remanufacturing of weapons pa

the surveillance testing of nuclear weapons 

components. For example, DOE had planned 

up to 50 pits (triggers that detonate nuclear w

annually to support testing and future stockp

requirements but has not yet reached this go

Our work in this area noted that to help man

effort to develop pit-remanufacturing capabi

needs to establish an integrated cost and sch

control system that would allow managers to 

1

See Management of the Nuclear Weapons Production I

Department of Energy (DOE/IG-0484, Sept. 22, 2000).
Page 15 GAO-01-246 

costs against the stages of completion and 

corrective actions when variances occur. 

expect to develop such a system until ear

when it will have established a new baseli

program. 

With respect to surveillance testing, the In

General’s report noted that the surveillanc

would determine if the reservoirs that hold 

a weapon have potential problems are 3 to 

behind schedule. To ensure that DOE’s ag

infrastructure is adequately addressed, th

recommended that DOE develop an overa

infrastructure restoration plan that would 

documented rationale for future maintena

requests and (2) the basis to monitor perf

ensure accountability for funding decision

DOE’s Office of Defense Programs stated 

ongoing study of facilities and infrastructu

address this recommendation and result i

plan for improving the infrastructure over 

years.

Contractor management and DOE oversig

to major cost overruns and schedule dela

construction of a new state-of-the-art test

the National Ignition Facility. The facility 

stadium-sized laser facility that may, for th

simulate in a laboratory the thermonuclea

created in nuclear explosions. Our August 

noted that DOE estimates that this almost 

facility will not be completed until 2008—

$1 billion and 6 years later than originally 

Unresolved technical problems, such as th

develop optical components that can with

intensity laser beams, may further drive u

While DOE and the contractor have made 

improve the project’s overall management

to determine if their implementation will 
Page 16 GAO-01-246 DO

To ensure that the project can meet its goals

recommended that DOE arrange for an outsid

and technical review of the National Ignition 

remaining technical challenges related to the 

cost and schedule risks. Moreover, the Cong

passed legislation requiring DOE to certify a

31, 2001, that the National Ignition Facility p

proceeding on cost and schedule, among oth

The legislation also requires DOE to recomm

appropriate path forward for the project and 

a study to analyze alternatives for the projec

configuration. 

Planning and 

Budgeting Challenges

DOE has developed an extensive planning pr

recently changed its budgetary process to im

management of the Stockpile Stewardship P

With respect to planning, DOE has develope

Stockpile Stewardship plans with varying lev

detail. However, these plans are not complet

fully support successful implementation of th

Stewardship Program. Specifically, DOE is s

determine some key requirements for the pro

as validating the quantity of the different we

systems to be refurbished. 

More importantly, DOE has not fully integrat

into its system of management controls for th

For example, our December 2000 report fou

milestones and other performance measurem

information contained in the plans have not 

systematically incorporated into the contrac

manage the operations of the program’s labor

production plants. This lack of effective inte

essentially prevents the separate component

program from functioning as a cohesive enti

recommended that the planning process be f

integrated with management controls, includ

recommendation that contractor performanc

and evaluations reflect the plans’ milestones
Page 17 GAO-01-246 

responding to our draft report, DOE’s Offi

Programs agreed with the need to integra

process with its management controls and 

had directed field offices to negotiate con

specific self-assessments addressing plan

execution processes.

DOE recently improved its budgeting for t

Stewardship Program. Program managers 

technical experts believe that the new str

significant promise because it can help id

program’s fixed and variable costs, which 

useful tool for improving program cost m

However, DOE has experienced some pro

implementing the new structure. For exam

DOE used the structure to develop the pr

proposed budget for fiscal year 2001, the 

and production plants did not apply the n

definitions consistently. DOE subsequentl

budget request, but the amendment make

determine the program’s fixed and variabl

turn, making it difficult to ascertain the am

funding that could be saved if an activity i

Organizational 

Alignment Challenges

Over the last several years, internal and ex

of the Stockpile Stewardship Program hav

confusing; overlapping; and at times, conf

authority within DOE. In response to thes

DOE has been reorganized to clarify the c

command between headquarters, field off

contractors. Also, the Congress created th

Nuclear Security Administration (NNSA) 

semiautonomous agency within DOE to m

Department’s stockpile stewardship, nava

reactor, and nuclear nonproliferation prog

Additional organizational changes are exp

NNSA’s new leadership begins to address 

while it implements the new administratio
Page 18 GAO-01-246 DO

Despite these reorganizations, problems con

example, one of the key problems noted in a 

management study 3 years ago that still exis

that DOE has essentially two headquarters o

the Stockpile Stewardship Program—one in 

headquarters and one in the Albuquerque Op

Office. As noted in our December 2000 repor

clearly defined roles and responsibilities are 

officials in both offices stated that managers 

headquarters and Albuquerque were uncerta

what they were authorized to do. 

The problems DOE experienced with its proj

develop the National Ignition Facility illustra

occur without clear lines of authority. Specif

August 2000 report found that DOE did not e

clear chain of command between its headqu

field office, thereby diffusing accountability 

project. Laboratory officials said that they co

the project’s chain of command confusing an

not know to whom they should report on a d

basis. Because of this confusion, DOE had d

taking active control of the project, missed 

opportunities to ensure the laboratory’s acco

and did not aggressively act on its suspicion

and schedule problems existed with the proj

DOE has since begun to establish a clearer c

command for the National Ignition Facility p

has aligned the contractors performing Stoc

Stewardship Program work under NNSA. In 

December 2000 report on the Stockpile Stew

Program, we recommended that DOE ensure 

recent field structure reorganization is imple

way that ensures clear lines of authority betw

Office of Defense Programs and its contracto

commenting on a draft of this report, the Off

Defense Programs agreed that a need exists 

organizational ambiguities and improve the 

understanding of roles, responsibilities, and 
Page 19 GAO-01-246 

accountabilities between headquarters an

elements.

Human Capital 

Challenges

Human capital issues may be the single la

challenging the nuclear weapons program

which we raised in our previous report on 

management challenges in January 1999, c

a challenge that the Department, along wi

federal agencies, is facing. DOE’s human 

problems can be seen as part of a broader 

human capital shortcomings that have ero

capabilities across the federal governmen

High-Risk Series: An Update (GAO-01-263, 

for a discussion of human capital as a new

governmentwide high risk area.

Several studies have pointed to DOE’s nee

comprehensively with the challenge of rec

training the next generation of technical a

staff before it reaches crisis proportions b

this decade. The experienced designers an

who built the weapons in the stockpile an

how they work are reaching or past retirem

is also faced with shortages of technician

techniques associated with weapons produ

the plutonium pit-manufacturing process. 

of qualified personnel who can perform th

work and have the appropriate security cl

limited. 

While a crisis is looming, the lack of staff 

management and technical skills is resulti

now. For example, the impact was eviden

National Ignition Facility project. Neither 

headquarters staff nor field managers had 

oversee the managerial and technical com

this large project, and the field staff did no

technical proficiency in laser operations. 
Page 20 GAO-01-246 DO

DOE has efforts ongoing in many areas to im

recruitment of staff, including exempting cer

technical specialists from salary ceilings and 

unique research and development aspects of 

program to attract potential candidates. Man

will need to focus on these efforts to ensure 

are implemented so that new employees can 

bolster the expertise needed in existing proj

trained to capitalize on the knowledge of exi

workers before they leave their current posi

Finally, DOE has suffered from instability in 

leadership and management team in the Offi

Defense Programs, which is responsible for 

Stockpile Stewardship Program. Our Decem

report noted, for example, that the proportio

vacant or with acting managers has increase

17 percent in 1996 to almost 65 percent in 200

turnover may contribute to the fact that the 

problems are enumerated year after year. In 

the high turnover rate impairs DOE’s ability 

(1) provide consistent and effective leadersh

decisive action on difficult problems, and (3

those who should be held accountable for re

In commenting on our draft report, DOE’s O

Defense Programs agreed that greater stabili

desirable but did not consider the level of tu

abnormally high, given the technical nature o

and the opportunities available to highly edu

skilled personnel. However, we believe that 

increasing level of turnover and the widespr

dissatisfaction with the lack of consistent m

direction among the federal and contractor o

interviewed are indicative of serious problem

recommended that DOE identify the reasons 

level of management turnover in the program 

actions to provide greater management cons

stability.
Page 21 GAO-01-246 

DOE Needs 

Sustained 

Management 

Attention to 

Correct Pervasive 

Weaknesses in 

Security Controls 

Over the last few years, reports by indepe

commissions, congressional committees, 

intelligence community have identified se

pervasive weaknesses in DOE’s lines of de

the loss of classified information. For inst

1999, a special investigative panel of the P

Foreign Intelligence Advisory Board repo

weaknesses, including loosely controlled 

thousands of foreign visitors to DOE’s nat

laboratories and inadequate systems for c

classified documents, which periodically 

thousands of documents’ being declared l

DOE’s Office of Inspector General have al

the last 2 years on weaknesses in security 

contractors’ travel to foreign countries, ac

information systems, the sale of surplus c

equipment, and classified documents. In a

widely reported incidents at Los Alamos N

Laboratory this past year brought DOE’s s

concerns to national attention. 

While DOE has responded to recommend

improve security in the past, it has not alw

through to effectively implement promised 

the long term. With NNSA’s establishment 

DOE has an opportunity to give greater pr

known weaknesses in security. To effectiv

improved security measures, DOE needs t

sustained management attention to chang

to ensure that the corrective actions taken 

implemented throughout the Department 

continue to work in the long term. If these 

are not resolved, DOE may continue to fa

incidents that threaten the nation’s contro

2

See Science at Its Best, Security at Its Worst: A Rep

Problems at the U.S. Department of Energy, Special I

of the President’s Foreign Intelligence Advisory Boa
Page 22 GAO-01-246 DO

nuclear weapons secrets and other sensitive 

information.

Our work and reviews by DOE’s Office of Ins

General have identified weaknesses in DOE’

controls over foreign travel by its contractor

computer information systems and equipme

for foreign travel are significant because, eac

thousands of contractor employees from nat

laboratories travel overseas to attend confer

conduct research, or exchange ideas. Becau

work, many of these employees have access t

information. In June 2000, we reported that, 

course of 5 years, more than 75 incidents of 

espionage against travelers from four labora

reported to DOE. These incidents included a

elicit information about nuclear materials, se

travelers’ rooms and luggage, offers of sexua

and attempts to access information on trave

computers. 

We reported that DOE concentrated its effor

to sensitive countries—those countries cons

potential risk to national security, such as Ch

Russia. For instance, DOE and its laboratori

additional review of proposed trips to sensit

countries. In addition, the laboratories typic

provided face-to-face pretravel counterintell

briefings only for travelers to sensitive coun

However, travelers to other countries often c

similar incidents as travelers to sensitive cou

recommended that DOE establish procedure

that DOE and its laboratories apply their res

the oversight of travel to nonsensitive count

commensurate with the risks associated with 

travel. 
Page 23 GAO-01-246 

Information system security has challenge

because some of its computer systems co

publicly available and sensitive informatio

unclassified information is information th

classified but requires controls over its us

dissemination.3

 Weak controls in such sys

allow inappropriate public access to such 

In addition, in June 2000, we reported tha

recent occasions, DOE’s national laborato

experienced Internet-based attacks that d

research activities. 

Weaknesses in DOE’s computer security t

identified by us or by DOE’s Office of Insp

have included

• poor file protection, password manage

network protection (such as intrusion 

firewalls) that have provided limited p

against malicious attacks by computer 

• public Internet access to sensitive info

DOE’s networks that could facilitate e

intrusions;

• ineffective oversight by DOE of compu

its science laboratories; and

3

More specifically, examples of sensitive unclassified 

by DOE are Unclassified Controlled Nuclear Inform

controlled information, proprietary information of p

and information that is designated for official use on

DOE, sensitive information includes information wh

could adversely affect national security or governme
Page 24 GAO-01-246 DO

• the slow implementation of the requirem

presidential directive to identify critical a

need of protection, assess vulnerabilities

prepare corrective action plans. 4

We made a number of recommendations in o

2000 report, including (1) the development a

implementation of guidelines for a risk-base

to information technology security managem

(2) the development of a clear management 

process to monitor and enforce laboratories

compliance with DOE’s policy and the effect

controls.

In addition, in two cases identified by the Of

Inspector General, DOE contractors sold exc

computer equipment without following appr

controls.5

 The contractor for DOE’s Savanna

inappropriately sold computer equipment co

sensitive information because the contractor 

follow regulatory requirements to first clear 

information. The buyer of the equipment had 

ship it to the People’s Republic of China. In t

case, the contractor for Sandia National Labo

a supercomputer that had been used for nuc

weapons research.6

 Contractor staff had not 

procedures for export-controlled property an

the supercomputer sale as any other piece o

4

These weaknesses were identified through our work an

DOE’s Office of Inspector General, specifically Unclassi

Network Security at Selected Field Sites, Department o

(DOE/IG-0459, Feb. 15, 2000) and Implementation of Pr

Decision Directive 63, Critical Infrastructure Protection

of Energy (DOE/IG-0483, Sept. 22, 2000).

5

See Inspection of Surplus Computer Equipment Manag

Savannah River Site, Department of Energy (DOE/IG-04

2000) and Inspection of the Sale of a Paragon Supercom

Sandia National Laboratories, Department of Energy (D

Dec. 1999).
Page 25 GAO-01-246 

property. In both cases, the DOE contract

subsequently repurchased the equipment.

DOE has generally agreed with the recom

made in these areas over the last several y

taken actions to improve its security prog

instance, DOE is developing a comprehen

assessment of the foreign intelligence thre

laboratories and other facilities and has h

counterintelligence personnel. DOE has a

its analytical capabilities for counterintell

identify foreign intelligence threats to info

technology, and personnel to help ensure 

Department’s resources are mitigating the 

area of computer security, DOE has issue

requirements for unclassified systems and 

each national laboratory to develop and im

protection plans. DOE plans to review its 

selling excess property. DOE has also imp

security oversight processes by such actio

requiring its Office of Independent Oversi

Performance Assurance to verify the corr

reported by field locations.

While DOE has often agreed to take corre

to fix security problems, implementation h

been successful, and problems have recur

example, in 1988, we reported that DOE’s 

weapons laboratories performed required 

checks on only 10 percent of their visitors 

countries. DOE acknowledged these prob

expanded background check requirement

few years later, in 1994, DOE granted part

from the background check requirement t

6

Supercomputers are capable of computing at very h

supercomputer sold by Sandia was considered to be 

fastest computers in the world.
Page 26 GAO-01-246 DO

and Sandia National Laboratories. In 1997, w

Los Alamos and Sandia conducted backgrou

on only 5 percent of their visitors from sensi

countries.

DOE’s difficulty in making lasting security 

improvements has been due in part to its cul

According to the panel of the President’s For

Intelligence Advisory Board, “DOE and its w

laboratories have a deeply rooted culture of 

for...security issues” that has frustrated effo

improve security. For instance, the panel fou

“bureaucratic insolence” in disputing, delayi

resisting a presidential directive on security. 

creation allows DOE a unique opportunity to 

the effectiveness of security for nuclear wea

information and nuclear materials. We believ

that changing DOE’s culture may be difficult

at least initially, be made up of existing DOE 

contractor employees. For NNSA to be effec

improving security, it must break out of the c

mindset that permeates DOE. Sustained man

attention will be needed to see that security 

improvements are effectively and consistent

implemented. 

Achieving 

Nonproliferation 

Goals Requires 

Improved Priority 

Setting and 

Program 

Coordination 

DOE plays a major role in U.S. arms control 

nonproliferation policies, goals, and program

well as the Departments of Defense and Stat

Russia and other newly independent states t

and eliminate weapons of mass destruction a

the risks of their proliferation.7

 The recent e

and political changes in the newly independe

the former Soviet Union have left weapons-u

nuclear materials vulnerable to theft or diver

Budget cuts have reduced guard forces and t

maintenance of security systems. In addition

including scientists at nuclear and biological 
Page 27 GAO-01-246 

facilities, now face difficult economic circ

such as unpaid wages and declines in ava

These factors increase the potential threa

outside and inside facilities in the newly i

states. Reducing these risks is a high prio

national security.

In the former Soviet Union, DOE’s nonpro

programs include securing weapons-grade 

materials from theft or diversion and crea

for weapons scientists. DOE’s programs ta

the context of agreements concluded betw

United States and Russia or other newly i

states. However, while Russia has agreed 

DOE to improve the security of nuclear m

been reluctant to grant U.S. project teams 

many buildings in its nuclear weapons co

over 90 percent of the nuclear materials a

Resolving access challenges is critical to e

the large amounts of nuclear materials in 

are protected in a manner consistent with 

nonproliferation goals. For some building

not have complete estimates of how much 

material will require improved security. 

DOE’s programs to reduce the risks from 

mass destruction have been in existence f

decade. As it has gained experience, DOE 

steps to improve program management, s

strengthening internal controls over the u

Nonetheless, DOE’s nonproliferation prog

the following management challenges in t

planning, budget execution, and coordina

7

Weapons of mass destruction include biological, ch

nuclear weapons. Other related threats include wea

nuclear materials and the scientific-industrial infras

developing and producing such weapons.
Page 28 GAO-01-246 DO

• Obtaining better access to information an

nuclear weapons laboratories to better ta

program resources to the greatest risks.

• Verifying the use of program funds.

• Coordinating the several DOE programs i

the newly independent states to increase 

effectiveness. 

In the area of planning, setting priorities and 

resources effectively are particularly critical 

Material Protection, Control, and Accounting 

(nuclear materials protection program) beca

experiencing dramatically escalating costs a

increases in scope. These increases are due t

information on the number of buildings invo

weapons of mass destruction and better acc

facilities8

 and (2) Russia’s apparent inability 

share of program costs due to its poor econo

situation. 

However, DOE has experienced problems in 

following priorities. Our March 2000 report n

as of February 2000, DOE had completed the 

of security systems at 113 buildings in the ne

independent states but that these buildings h

about 7 percent of the nuclear materials nee

security upgrades. Without access to the site

information on the materials they contain, DO

teams have had difficulty in planning, priorit

implementing, and monitoring work on secu

installations. Additional information about th

installations for nuclear materials security sy

shown in figure1. Similarly, in its 1999 audit, 

Office of Inspector General reviewed nine pr

8

DOE’s initial program estimates were based on partial 

available at the close of the Cold War. DOE currently es

650 metric tons of weapons-grade nuclear materials are 

civilian, naval fuel, and nuclear laboratory sites in the fo

Union, compared with an initial estimate of 450 metric t
Page 29 GAO-01-246 

in three of the projects, identified nearly $

on low-priority upgrades to nuclear mater

protection, for which little actual reductio

achieved.9

Figure 1: Status of Nuclear Security System Ins

February 2000

a

In Russia, buildings have either a complete physica

system, a complete material control and accounting 

Buildings at sites in the other newly independent sta

physical protection and material control and accoun

9

See Nuclear Material Protection, Control, and Acco

Department of Energy (DOE/IG-0452, Sept. 16, 1999

45

5

18

9

11

59

15 

0

20

40

60

80

100

120

140

160

200

180

Civilian 

sites

Nuclear 

weapons

complex

Naval 

sites

Number of buildings 

Work started

No work started

Russia

Installed systems a

27

115
Page 30 GAO-01-246 DO

Source: DOE.

In response to a recommendation by DOE’s 

Inspector General, the nuclear materials pro

program agreed to develop a policy on the ap

level of access to buildings and information 

determine what upgrades are needed. DOE a

improve review procedures for projects to h

that planned upgrades are consistent with pr

guidance. Nonetheless, identifying priorities 

directing program resources to high-priority 

continue to challenge DOE’s nuclear materia

protection program as it addresses additiona

and buildings, some of which are very sensit

Russians. Ensuring an appropriate level of a

sensitive facilities and information in Russia 

committing to undertake particular projects 

DOE in a better position to target its work to 

greatest risks. 

To strengthen its budget execution, DOE nee

better job of obtaining information to verify 

program funds are used as planned. For insta

Initiatives for Proliferation Prevention progra

seed money to create civilian jobs for scienti

newly independent states who have worked 

of mass destruction. Yet for about 20 of the 7

we reviewed for our February 1999 report, w

that the scientific institute receiving the fund

appear to have worked on defense activities

For several other projects, DOE did not have 

information to determine the institute’s back

Some program personnel from DOE’s nation

laboratory were reluctant to request such inf

because it seemed intrusive or contrary to R

national security laws. However, we were ab

background information on scientists from s

institutes, and Russian officials told us that p
Page 31 GAO-01-246 

general information about scientists’ nucl

related activities did not violate Russian l

DOE has since improved its internal contr

use of program funding. In response to a 

recommendation in our February 1999 rep

requires that its officials obtain backgroun

scientists prior to placing contracts, to he

DOE’s funding is directed to those who ha

involved in weapons of mass destruction. 

response to our recommendations concer

Initiatives for Proliferation Prevention Pro

September 1999, DOE issued guidance to 

laboratories requiring regular reporting on 

funds are being spent by recipients in the 

independent states. Furthermore, in the In

Proliferation Prevention Program, the Con

capped the percentage of funding that ma

DOE’s national laboratories so that more o

funding will be available for scientists and 

the newly independent states. If properly 

these changes will strengthen DOE’s budg

and controls for this program.

DOE’s programs in the newly independen

operate separately and have not been effe

coordinated. DOE needs to do a better job 

overcoming organizational “stovepipes” a

various programs. Through recent discuss

officials, we observed that DOE could bet

its program to increase safety at nuclear p

(such as Chornobyl) with the nonprolifera

to achieve the objectives of both efforts. F

the safety program has an identified need 

for nuclear power plants. Weapons techni

engineers could be used to help design an

fire doors. Yet the director of a DOE progr

civilian employment for weapons scientis

DOE has not coordinated the efforts of th

with the fire safety efforts for nuclear pow
Page 32 GAO-01-246 DO

safety efforts are significant because, of the 

designed nuclear reactors currently in opera

standards of 25 fall below Western standards 

and/or other safety measures. 

Furthermore, a 1999 report by the National R

Council recommended that DOE manage its 

programs in the newly independent states as 

complementary efforts so that each reinforc

other.10 According to the report, a Russian in

commitment to improving nuclear materials 

should be an important consideration in that 

participation in other programs. The report n

seems difficult to justify lucrative contracts 

government sources for institutes that have 

records on safeguarding and protecting nucl

materials. 

We recognize that DOE’s nonproliferation pro

inherent challenges in working in Russia and 

newly independent states, including: Russia’

economic conditions, the need to further bu

existing working relationships, and limitation

to facilities and information. In March 2000, 

concluded that the impacts of nonproliferati

are more easily demonstrated when there ar

mutually agreed upon national objectives; ta

threat elements; and good working relations

between U.S. and Russian officials. We noted 

impact of projects without these characteris

generally harder to demonstrate. DOE could 

ability to achieve nonproliferation goals by f

addressing challenges in (1) gaining access t

and information to improve planning, (2) obt

information to verify the use of program fun

10See Protecting Nuclear Weapons Material in Russia, O

International Affairs of the National Research Council, 

Academy of Sciences (1999).
Page 33 GAO-01-246 

(3) coordinating DOE’s various programs 

Soviet Union so that they reinforce each o

objectives. 

Improved 

Management Tools 

and Integration 

Needed in DOE’s 

Efforts to 

Clean Up 

Radioactive and 

Hazardous Wastes

DOE faces challenges in completing the e

cleanup of its 44 remaining sites, which in

cleaning up contaminated soil, groundwat

water, as well as treating and disposing of 

volumes of radioactive and hazardous wa

resulted from 50 years of nuclear weapon

production activities. Many DOE cleanup 

inherently complex. For example, the rem

treatment of highly radioactive wastes fro

several DOE sites requires developing and 

technologies and treating such large volum

that work will take several decades. To br

complex projects to a successful complet

needs to consistently use sound managem

However, DOE has had difficulty in comp

projects within budget and on time. Some 

taken a decade longer than anticipated or 

experienced technical failures related in p

management practices and DOE’s inadequ

of contractors, costing taxpayers millions 

useful result. 

In recent years, DOE has made progress i

project baselines, which define the scope 

estimated costs, and schedules. The estab

baselines has improved DOE’s planning, b

execution, and management information. 

management challenges remain, including 

11As of the beginning of fiscal year 2000, DOE had co

cleanups at 69 of its 113 sites, leaving 44 to be comp

sites that have completed active cleanup still require 

because waste remains in place or because long-term 

as groundwater treatment, are still ongoing.
Page 34 GAO-01-246 DO

improving baselines and integrating activitie

sites and within multipurpose sites. DOE’s re

these issues would result in more effective u

resources by reducing duplication for waste 

and disposal facilities and groundwater mon

Beginning in fiscal year 1997, DOE required 

cleanup sites to define their work as project

identified start and completion points and de

scopes of work. At the same time, DOE requ

establish baselines for all of their projects. W

sites had already followed these practices pr

new requirements, others had conducted wo

“level-of-effort” basis, namely, working on pi

various efforts as allowed by that year’s fund

that lacked defined projects and baselines, id

completion goals and assessing interim prog

completing cleanup work had been difficult. 

baselines as management tools has improved 

planning capabilities, its control over projec

and budget execution, and the information a

its managers. 

Improving cleanup planning and managemen

realistic and well-supported baselines warra

continued management attention. According 

2000 report by DOE’s Office of Inspector Gen

previously identified weaknesses had been c

problems remained as some baselines omitte

duplicated costs, and some baselines were n

to reflect current cost estimates.12 We have f

some baseline schedules were overly optimi

example, we reported in April 2000 that at tw

contractors’ schedules did not include enoug

obtaining regulatory approval and/or permit

approved these optimistic schedules, despite 

12See Best Practices for Environmental Management Ba

Development, Department of Energy (DOE/IG-0476, Jul
Page 35 GAO-01-246 

experience of longer regulatory review pe

one case, warnings from Idaho regulators 

needed to obtain permits to begin constru

treatment facility. 

Integrating waste treatment and disposal 

among sites presents unique management 

DOE. DOE’s Office of Environmental Man

indicated that the goal of integration is to 

program more efficient, through such acti

waste facilities’ available capacity, elimina

redundant facilities, removing organizatio

“stovepipes,” and applying site successes 

learned nationwide. Achieving such integr

challenging because of the geographic dis

DOE’s cleanup sites, the large volumes of 

involved, and the differing requirements f

types of hazardous and radioactive waste

integration is worth pursuing because it c

cost savings, speedier cleanups, and impr

approaches when sites share lessons learn

made progress in obtaining and analyzing 

needed to support integration. Project bas

provided such data as (1) waste types and 

(2) planned schedules for sites’ activities. 

Significant management challenges to ach

integration among sites still exist and incl

(1) arranging for one site to support anoth

as necessary; (2) providing specialized ve

containers for shipping waste, when and w

needed; (3) reaching agreements with stat

issues as a state’s acceptance of certain w

treatment, storage, and/or disposal from D

other states; and (4) providing informatio

costs of waste disposal options at various 

commercial locations so that site manage

cost-effective decisions.
Page 36 GAO-01-246 DO

One example of an integration challenge is th

DOE to reach agreements with states to imp

plans for consolidating wastes from several 

February 2000, DOE decided to dispose of ce

categories of waste at the Hanford site in Wa

State and the Nevada Test Site. However, as w

in April 2000, implementing DOE’s decision m

problematic because both states have raised 

to becoming the primary disposal sites for w

DOE sites in other states. The states could im

conditions, such as volume limits, in permits 

waste facilities. 

In another integration challenge noted in our 

report, DOE has not had complete informati

costs of disposal options for low-level radioa

mixed wastes.13 For example, the one comm

disposal facility useful for DOE’s wastes cha

reflecting its total life-cycle costs, and four o

disposal facilities charged fees; but these fee

capture complete costs and did not have a co

basis. As a result, it has been difficult for site 

to consider the costs of different options in m

disposal decisions. Furthermore, DOE lacke

about whether its waste disposal facilities sh

fees reflecting their costs and has not provide

for sites on how to compare costs if fees are 

charged. 

We recommended that DOE develop criteria 

guidance for DOE’s waste managers to use in 

decisions about waste treatment, storage, an

options, including developing reasonable and 

estimates of the life-cycle costs of DOE’s dis

13DOE defines low-level wastes as all radioactive waste

fall within other classifications, such as highly radioact

spent (used) nuclear fuel. Mixed wastes are low-level ra

wastes with hazardous components, such as lead and m
Page 37 GAO-01-246 

facilities. As of September 2000, DOE had 

initiated actions in response to our recom

Reducing costs is important because, as o

noted, DOE plans to dispose of about 2.1 

meters of these wastes over the next seve

This volume of waste would fill an area th

football field stacked to nearly one and a 

height of the Empire State Building.

DOE has also experienced difficulties in i

environmental activities at its multipurpo

because of organizational “stovepipes” th

resulted in a lack of comprehensive plann

example, we reported in April 2000 that th

of DOE’s Office of Environmental Manage

Paducah, Kentucky, site, left out billions o

of work that fell under a different DOE off

the plan were 16 unused structures, nearl

of depleted uranium, and nearly 1 million 

waste and scrap metal. Figure 2 shows tw

the 148 storage areas for waste and scrap 

were not included in the cleanup plan. In 

our recommendations, DOE officials anno

2000 that they would address integration i

Paducah by developing a comprehensive 

site’s cleanup. 
Page 38 GAO-01-246 DO

Figure 2: Examples of Storage Areas for Waste and Scrap Metal That Were Left Out 

Cleanup Plan

Source: DOE.
Page 39 GAO-01-246 

A review by DOE’s Office of Inspector Ge

similar problems in integrating groundwa

activities at multipurpose sites.14 At Oak R

Tennessee, for instance, three DOE progra

separate monitoring of groundwater quali

therefore missed opportunities to econom

DOE recognizes its integration challenges 

established an Office of Integration and D

work on issues affecting multiple cleanup 

office is to provide such multisite services 

treatment and disposal options for the var

types, operating waste transportation, and 

the communication of lessons learned. An

for this office is to seek opportunities to c

functions among sites to reduce the dupli

functions and facilities. The integration of

develops policies for the transfer of exces

contaminated facilities from other DOE p

Office of Environmental Management—an 

may affect sites such as Paducah, which h

missions. 

The estimated total cost of DOE’s cleanup 

disposal activities—$168 billion to $212 b

improving efficiency essential. We believe 

needs to devote continued management a

improvement of project baselines and its 

challenges to achieve the desired efficienc

cleanup program. Reliable, up-to-date pro

can provide DOE with better control over 

work and with information that is needed 

integration activities. While DOE has begu

initiatives, integration will continue to be 

task because of DOE’s large volume of wa

geographic locations, need to resolve issu

14See Groundwater Monitoring Activities at Departm

Facilities, Department of Energy (DOE/IG-0461, Feb
Page 40 GAO-01-246 DO

states, and history of organizational “stovepi

its programs and locations.

Problems in 

Contract 

Management Place 

It at High Risk for 

Fraud, Waste, 

Abuse, and 

Mismanagement

Since 1990, we have designated contract man

DOE as a high-risk area, and we continue to 

high risk. DOE, the largest civilian contractin

the federal government, primarily relies on c

to operate its facilities and carry out its miss

uses contractors to manage a wide variety of 

including performing research, maintaining t

weapons stockpile, and cleaning up radioact

hazardous wastes. To carry out these missio

contracts often involve the design, construct

operation of multi-million-dollar, one-of-a-kin

In fiscal year 1999, DOE obligated about $15

about 90 percent of its total obligations, to c

For years, we and others have reported on p

with DOE’s contract management, which we 

defined broadly to include contract administ

project management. These problems have i

noncompetitive awards, cost and schedule o

inadequate oversight of contractors’ activitie

reliance on cost-reimbursement contracts, a

inability to hold contractors accountable. Be

relies on contractors to carry out its mission

address these problems could limit DOE’s ef

and efficiency in its stockpile stewardship, s

cleanup, and other missions. 

DOE is aware of its contract management pr

has numerous initiatives under way to addre

While progress is being made to correct the 

many of these initiatives will take a number 

fully implement. Furthermore, since DOE us

contractors to manage many aspects of its m

initiatives to improve contract management 

directed at the underlying culture of the orga
Page 41 GAO-01-246 

Therefore, DOE will need to continue foc

management attention on these problems 

term to effect lasting change for both DOE 

contractor staff. 

For example, DOE created a new office in 

1999 to implement policies and procedure

project management and oversight. Effort

under way to improve up-front acquisition 

help ensure that the appropriate contracti

financing approach is used on major proje

better integrate contract and project man

However, these initiatives are in the early 

is too soon to tell whether they will be eff

preventing cost and schedule overruns an

contractors fully accountable. Cost and sc

overruns have plagued DOE’s projects ove

and they continue to persist, as shown in 

examples:

• The National Ignition Facility, being bu

Lawrence Livermore National Laborato

the behavior of nuclear weapons witho

testing, was originally expected to cos

billion and be completed in 2002. DOE 

that this facility will eventually cost ab

and be completed in 2008—over a $1 b

increase in cost and 6 years later than 

estimated. As we reported in August 20

increases and schedule delays have be

to a combination of poor contractor m

and inadequate DOE oversight, includi

technical and managerial skills to over

project. We recommended that DOE ar

outside scientific and technical review 

facility’s remaining technical challenge

cost and schedule risks.

• At DOE’s Savannah River Site, the in-ta

precipitation process was selected in 1

preferred method for separating highly 
Page 42 GAO-01-246 DO

wastes from 34 million gallons of liquids 

tanks. In 1985, DOE estimated that it wou

about 3 years and $32 million to construct 

precipitation facility. In April 1999, we rep

after a decade of delays and spending alm

million, DOE suspended the project becau

not work safely and efficiently as designe

the factors contributing to this failure we

ineffectiveness of the contractor’s manag

of DOE’s oversight of the project. Problem

management may have continued in DOE

find an alternative method for waste sepa

According to a 2000 report by a committe

National Research Council, the committe

see a strong and technically informed man

place at the Savannah River Site. Further

committee noted that it became increasin

to determine who was in charge of mana

program over the course of the committe

In another example, DOE’s Office of Environ

Management started its privatization initiativ

reduce the cost of, and speed the cleanup of

contaminated sites and to improve the contr

performance. For large cleanup projects, thi

primarily an alternative contracting and fina

strategy that emphasized fixed-price contrac

private financing. We reported in June 2000 t

fixed price contracting had been successful 

projects with a known scope, privatization h

not accomplished DOE’s goals for complex c

projects.

15See Alternatives for High-Level Waste Salt Processing 

Savannah River Site, Committee on Cesium Processing 

for High-Level Waste at the Savannah River Site, Nation

Council (2000). The National Research Council, as the p

operating agency of the National Academy of Sciences 

National Academy of Engineering, provides the governm

and scientific and engineering communities with servic

research.
Page 43 GAO-01-246 

For example, DOE chose the privatization 

the Tank Waste Project at the Hanford site

involved treating about 5 million gallons o

radioactive wastes stored in underground 

contract to design, build, and operate the f

the wastes had an estimated price of $6.9 b

2000, the contractor submitted a revised p

of over $15 billion. DOE terminated the pr

contract because it was concerned about 

contractor’s performance and the rapidly e

estimates, as well as the full private finan

chosen by DOE. In October 1998, we conc

DOE should reassess the cost-effectivene

proposed approach to the project, includi

and financing alternatives to the privatized 

the basis of DOE’s assessment of the alter

Department has recompeted the project u

traditional cost-reimbursement-plus-incen

approach.

In 1993, DOE established a Contract Refo

in 1994 began implementing numerous ini

improve contract management. These init

increasing competition and switching to p

based contracts. For example, DOE revise

procurement regulations to make compet

normal practice and, overall, has increase

competition in awarding contracts. As of 

2000, 68 percent of DOE’s major contracts 

competitively compared with only 9 perce

contracts in 1990. However, some of DOE

contracts for operating its national labora

including ones that have a history of secu

project management problems, continue t

rather than competed.16 Deciding to exten

compete these contracts may weaken DO

position to use contracts to effect change

such problem areas as security and projec

management.
Page 44 GAO-01-246 DO

In another example, DOE revised its procure

regulations to shift to performance-based co

to hold its contractors more accountable. In 

DOE implemented a new fee policy that wou

contractor’s entire incentive fee at risk for p

performance in environment, safety, and hea

DOE also has initiatives to improve the perfo

incentives for contractors to align them mor

with DOE’s strategic goals for a site. As of Se

2000, DOE officials told us that all of their m

contracts to manage and operate the Depart

facilities are now performance-based contra

While performance incentives can better foc

contractors’ efforts in doing the work most c

achieving DOE’s missions, the performance 

are not always clearly linked to DOE’s objec

structured to focus on outcomes to be achie

thus, may not accomplish the desired results

example, in April 2000, DOE’s Office of Inspe

General reported that the performance-based 

at the Idaho National Engineering and Envir

Laboratory had not been fully successful in i

performance and reducing costs. Because of 

with structuring incentives to reward outcom

than process and with validating the contrac

performance, the Office of Inspector General 

$11.3 million in incentive fees paid to the con

Our May 1999 report on the use of performan

contracting at DOE’s national laboratories in

16DOE’s national laboratories are designated as federall

research and development centers and are not subject t

competitive procedures for their establishment or main

Nevertheless, DOE has competed the contracts for som

centers. 

17See Performance Incentives at the Idaho National Eng

Environmental Laboratory, Department of Energy (WR-

2000).
Page 45 GAO-01-246 

DOE did not know if this form of contract

achieving the intended results of improve

and lower costs. We recommended that D

the costs and benefits from using such co

national laboratories. In April 1999, we rep

of the factors contributing to DOE’s securi

the national laboratories was the lack of e

to security matters in the contractor’s per

incentives. For example, two of the contr

performance incentives for counterintellig

activities, and the performance incentive 

safeguarding classified documents and m

accounted for less than 1 percent in the c

performance evaluation.

Over the long term, DOE may resolve all o

in its contract management. Until then, D

problems can increase the government’s c

expose DOE to billions of dollars of finan

DOE’s Financial 

Management Could 

Be Improved

DOE’s Office of Inspector General reporte

concerns related to financial management 

DOE’s consolidated financial statements f

year ending on September 30, 1999.18 First

1998, DOE’s Western Area Power Adminis

markets and transmits electricity from mu

projects) implemented a new financial ma

system that has been unable to generate f

statements. As a result, DOE’s Office of In

General reported this as a material weakn

Western Area Power Administration had d

corrective action plan, and the Office of In

General recommended that DOE’s Chief F

Officer monitor the plan’s implementation

18See The U.S. Department of Energy’s Consolidated 

Statements for Fiscal Years 1999 and 1998, Departm

(DOE/IG-FS-00-01, Feb. 17, 2000).
Page 46 GAO-01-246 DO

November 2000, DOE’s Office of Inspector G

reported that the Western Area Power Admin

was still experiencing delays in the preparat

fiscal year 1999 financial information for aud

report noted that these delays could also aff

Inspector General’s audit of DOE’s fiscal yea

consolidated financial statements.

Second, DOE’s Office of Inspector General c

reportable condition related to the estimatio

for environmental liabilities. DOE used mod

estimate the majority of the $25 billion envir

liability for contaminated active and surplus f

portion of the $230 billion total estimated env

liability. This portion of the liability estimate 

facilities managed by ongoing programs that 

yet been transferred to DOE’s Office of Envi

Management but will ultimately require reme

The data used for these models were found t

unreliable. Of the 85 facilities selected for re

Office of Inspector General, errors were foun

data for 14 facilities, resulting in a 16-percen

These errors included incorrect facility mode

inclusion of facilities that were not contamin

exclusion of facilities that were contaminate

material errors in the square footage of the f

These errors occurred because facility mana

responsible for maintaining the facilities at s

14 sites were not directly involved in the dat

verification. The Office of Inspector General 

recommended that DOE’s Chief Financial Of

develop procedures for verifying data about 

facilities, which DOE management agreed to 

19See Management Challenges at the Department of Ene

Department of Energy (DOE/IG-0491, Nov. 28, 2000).
Page 47 GAO-01-246 

Key Contact Robert A. Robinson, Managing Director

Natural Resources and Environment Issue

(202) 512-3841

robinsonr@gao.gov
Page 48 GAO-01-246 

Maintaining 

Nuclear Weapons 

Capabilities

Nuclear Weapons: Management Improvem

to Effectively Implement the Stockpile Ste

Program (GAO-01-48, Dec. 14, 2000).

National Ignition Facility: Management an

Failures Caused Major Cost Overruns and 

Delays (GAO/RCED-00-271, Aug. 8, 2000).

Nuclear Weapons: Challenges Remain for 

Implementation of DOE’s Tritium Supply 

(GAO/RCED-00-24, Jan. 28, 2000).

Nuclear Weapons: DOE Needs to Improve 

the $5 Billion Strategic Computing Initiati

(GAO/RCED-99-195, June 28, 1999).

Nuclear Weapons: Key Nuclear Weapons C

Issues Are Unresolved (GAO/RCED-99-1, 

Correcting 

Security 

Weaknesses

Nuclear Security: Information on DOE’s R

for Protecting and Controlling Classified D

(GAO/T-RCED-00-247, July 11, 2000).

Department of Energy: National Security 

Contractors Traveling to Foreign Countrie

Strengthening (GAO/RCED-00-140, June 2

Information Security: Vulnerabilities in DO

for Unclassified Civilian Research (GAO/A

June 9, 2000).

Nuclear Security: Security Issues at DOE 

Created National Nuclear Security Admin

(GAO/T-RCED-00-123, Mar. 14, 2000).
Page 49 GAO-01-246 

Department of Energy: Views on DOE’s Pl

the National Nuclear Security Administrat

(GAO/T-RCED-00-113, Mar. 2, 2000).

Nuclear Security: Improvements Needed i

Safeguards and Security Oversight (GAO/

Feb. 24, 2000).

Department of Energy: Key Factors Unde

Problems at DOE Facilities (GAO/T-RCED

20, 1999).

Department of Energy: DOE Needs to Imp

Over Foreign Visitors to Weapons Laborat

(GAO/T-RCED-99-28, Oct. 14, 1998).

Meeting 

Nonproliferation 

Goals

Nuclear Nonproliferation: Limited Progre

Improving Nuclear Material Security in Ru

Newly Independent States (GAO/RCED/N

Mar. 6, 2000).

Weapons of Mass Destruction: U.S. Effort

Threats From the Former Soviet Union 

(GAO/T-NSIAD/RCED-00-119, Mar. 6, 2000

Nuclear Nonproliferation: Concerns With 

to Reduce the Risks Posed by Russia’s Un

Weapons Scientists (GAO/RCED-99-54, Fe

Cleaning Up 

Radioactive Wastes

Department of Energy: Uncertainties and 

Problems Have Hindered Cleanup at Two 

Sites (GAO/T-RCED-00-248, July 12, 2000)

Nuclear Waste: DOE’s Advanced Mixed Wa

Project—Uncertainties May Affect Perfor

Schedule, and Price (GAO/RCED-00-106, A
Page 50 GAO-01-246 DO

Nuclear Waste Cleanup: DOE’s Paducah Plan 

Uncertainties and Excludes Costly Cleanup A

(GAO/RCED-00-96, Apr. 28, 2000).

Low-Level Radioactive Wastes: Department 

Has Opportunities to Reduce Disposal Costs

(GAO/RCED-00-64, Apr. 12, 2000).

Nuclear Waste Cleanup: Progress Made but D

Management Attention Needed to Increase U

Innovative Technologies (GAO/T-RCED-99-1

1999).

Department of Energy: Accelerated Closure 

Flats: Status and Obstacles (GAO/RCED-99-1

1999).

Nuclear Waste: DOE’s Accelerated Cleanup S

Benefits but Faces Uncertainties (GAO/RCE

Apr. 30, 1999).

Nuclear Waste: Process to Remove Radioact

From Savannah River Tanks Fails to Work

(GAO/RCED-99-69, Apr. 30, 1999).

Nuclear Waste: Department of Energy’s Hanf

Waste Project—Schedule, Cost, and Manage

(GAO/RCED-99-13, Oct. 8, 1998).

Managing 

Performance and 

Contracts, and 

Other Issues

Observations on the Department of Energy’s 

1999 Accountability Report and Fiscal Year 2

Performance Plans (GAO/RCED-00-209R, Ju

Nuclear Waste: Observations on DOE’s Priva

Initiative for Complex Cleanup Projects

(GAO/T-RCED-00-215, June 22, 2000).
Page 51 GAO-01-246 

Observations on the Department of Energ

2000 Performance Plan (GAO/RCED-99-21

1999).

Department of Energy: Need to Address L

Management Weaknesses (GAO/T-RCED-9

1999).

National Laboratories: DOE Needs to Ass

of Using Performance-Based Contracts

(GAO/RCED-99-141, May 7, 1999).

Major Management Challenges and Progr

Department of Energy (GAO/OCG-99-6, Ja
Page 52 GAO-01-246 

Major Management Challenges and Progr

Governmentwide Perspective (GAO-01-24

Major Management Challenges and Progr

Department of Agriculture (GAO-01-242)

Major Management Challenges and Progr

Department of Commerce (GAO-01-243)

Major Management Challenges and Progr

Department of Defense (GAO-01-244)

Major Management Challenges and Progr

Department of Education (GAO-01-245)

Major Management Challenges and Progr

Department of Energy (GAO-01-246)

Major Management Challenges and Progr

Department of Health and Human Service

(GAO-01-247)

Major Management Challenges and Progr

Department of Housing and Urban Develo

(GAO-01-248)

Major Management Challenges and Progr

Department of the Interior (GAO-01-249)

Major Management Challenges and Progr

Department of Justice (GAO-01-250)

Major Management Challenges and Progr

Department of Labor (GAO-01-251)

Major Management Challenges and Progr

Department of State (GAO-01-252)
Page 53 GAO-01-246 

Major Management Challenges and Progr

Department of Transportation (GAO-01-25

Major Management Challenges and Progr

Department of the Treasury (GAO-01-254)

Major Management Challenges and Progr

Department of Veterans Affairs (GAO-01-2

Major Management Challenges and Progr

Agency for International Development (G

Major Management Challenges and Progr

Environmental Protection Agency (GAO-0

Major Management Challenges and Progr

National Aeronautics and Space Administ

(GAO-01-258)

Major Management Challenges and Progr

Nuclear Regulatory Commission (GAO-01

Major Management Challenges and Progr

Small Business Administration (GAO-01-2

Major Management Challenges and Progr

Social Security Administration (GAO-01-2

Major Management Challenges and Progr

U.S. Postal Service (GAO-01-262)

High-Risk Series: An Update (GAO-01-263
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