14266 Federal Register / Vol. 72, No. 58 / Tuesday, March 27, 2007 / Notices 

and outcomes of different internal 

arrangements and agency decisions. 

(d) Increased knowledge of ‘‘best VR 

practices’’ for prioritizing and providing 

services to individuals with the most 

significant disabilities. The RRTC must 

contribute to this outcome by 

conducting research on the extent to 

which individuals with the most 

significant disabilities are given priority 

for services from their respective State 

VR programs, and identifying best 

practices among the State VR programs 

in ensuring that individuals with the 

most significant disabilities receive 

services on a priority basis. Collection 

and analysis of data for this research 

must be coordinated with and informed 

by research on the disability 

employment service and VR structures 

described in paragraphs (b) and (c) of 

this priority. This coordination will 

allow ‘‘best practices’’ findings to be 

properly contextualized, and therefore 

more likely to be successfully applied in 

other States or agencies. 

(e) Increased knowledge of ‘‘best VR 

practices’’ for individuals with 

developmental disabilities (DD) and 

individuals with mental illness (MI). 

The RRTC must contribute to this 

outcome by conducting research on best 

practices for placing or retaining 

individuals with DD and individuals 

with MI in jobs. Collection and analysis 

of data for this best practices research 

must be coordinated with and informed 

by research on the disability 

employment service and VR structures 

described in paragraphs (b) and (c) of 

this priority. This coordination will 

allow ‘‘best practices’’ findings to be 

properly contextualized, and therefore 

more likely to be successfully applied in 

other States or agencies. 

(f) Enhancement of the knowledge 

base of State and Federal administrators 

of the VR program and other 

employment programs for individuals 

with disabilities, through disseminating 

research results and providing training 

and technical assistance based on the 

new knowledge about the disability 

employment service structures 

described in paragraphs (b) and (c) of 

this priority, and ‘‘best practices’’

knowledge described in paragraphs (d) 

and (e) of this priority. 

In addition, this RRTC must: 

• Collaborate with RSA’s technical 

assistance mechanisms to effectively 

disseminate best practices materials 

developed in the research component of 

this RRTC. 

• Coordinate its research, 

dissemination, training, and technical 

assistance efforts with grantees in 

NIDRR’s Employment domain, as 

appropriate. 

Executive Order 12866 

This notice of proposed priority has 

been reviewed in accordance with 

Executive Order 12866. Under the terms 

of the order, we have assessed the 

potential costs and benefits of this 

regulatory action. 

The potential costs associated with 

the notice of proposed priority are those 

resulting from statutory requirements 

and those we have determined as 

necessary for administering these 

programs effectively and efficiently. 

In assessing the potential costs and 

benefits—both quantitative and 

qualitative—of this notice of proposed 

priority, we have determined that the 

benefits of the proposed priority justify 

the costs. 

Summary of potential costs and 

benefits: The potential costs associated 

with this proposed priority are minimal 

while the benefits are significant. 

The benefits of the Rehabilitation 

Research and Training Centers have 

been well established over the years in 

that similar projects have been 

completed successfully. This proposed 

priority will generate new knowledge 

and technologies through research, 

development, dissemination, utilization, 

and technical assistance projects. 

Another benefit of this proposed 

priority is that the establishment of a 

new RRTC conducting research projects 

will support the President’s NFI and 

will improve the lives of persons with 

disabilities. This RRTC will generate, 

disseminate, and promote the use of 

new information that will improve the 

options for individuals with disabilities 

to perform regular activities in the 

community. 

Applicable Program Regulations: 34 

CFR part 350. 

Electronic Access to This Document 

You may view this document, as well 

as all other Department of Education 

documents published in the Federal 

Register, in text or Adobe Portable 

Document Format (PDF) on the Internet 

at the following site: http://www.ed.gov/ 

news/fedregister. 

To use PDF you must have Adobe 

Acrobat Reader, which is available free 

at this site. If you have questions about 

using PDF, call the U.S. Government 

Printing Office (GPO), toll free, at 1–

888–293–6498; or in the Washington, 

DC, area at (202) 512–1530. 

Note: The official version of this document 

is the document published in the Federal 

Register. Free Internet access to the official 

edition of the Federal Register and the Code 

of Federal Regulations is available on GPO 

Access at: http://www.gpoaccess.gov/nara/ 

index.html. 

(Catalog of Federal Domestic Assistance 

Number 84.133B, Rehabilitation Research 

and Training Centers Program.) 

Program Authority: 29 U.S.C. 762(g) and 

764(b)(2). 

Dated: March 22, 2007. 

John H. Hager, 

Assistant Secretary for Special Education and 

Rehabilitative Services. 

[FR Doc. E7–5590 Filed 3–26–07; 8:45 am] 

BILLING CODE 4000–01–P 

DEPARTMENT OF ENERGY 

Office of Management; Request for 

Public Comment on Department of 

Energy Contractor Employee Pension 

and Medical Benefits Challenge 

ACTION: Request for public comments. 

SUMMARY: The Department of Energy 

(DOE) is seeking public comments and/ 

or recommendations on how to address 

the challenge it faces due to increasing 

costs and liabilities associated with 

contractor employee pension and 

medical benefits. Under the 

Department’s unique Management and 

Operating (M&O) and other site 

management contracts, DOE reimburses 

its contractors for allowable costs 

incurred in providing employee pension 

and medical benefits to current 

employees and retirees who are eligible 

to participate in the contractors’ pension 

and medical benefit plans. DOE has 

established a Web site for the public to 

submit comments and/or 

recommendations on how it should 

address the financial challenge it faces 

on contractor employee pension and 

medical benefits. 

DATES: Comments are due on or before 

May 11, 2007. 

ADDRESSES: Interested parties may 

submit comments electronically, via 

traditional mail service, or by facsimile 

to the addresses identified below. The 

Internet address for the Web site is 

http://management.energy.gov/ 

request_for_comments.htm. E-mail 

comments to 

contractorpensions@hq.doe.gov. 

Transmit submissions by facsimile to 

Stephanie Weakley, Director, Office of 

Resource Management, at 202–287–

1305. Public comments and other 

information received from the public 

will be posted on this Web site. To the 

extent your comments contain 

proprietary or business sensitive 

information, please so indicate and 

include a redacted version of your 

comments. 

FOR FURTHER INFORMATION CONTACT: 

Stephanie Weakley, Office of 


sroberts on PROD1PC70 with NOTICES
Federal Register / Vol. 72, No. 58 / Tuesday, March 27, 2007 / Notices 14267 

Procurement and Assistance 

Management, U.S. Department of 

Energy, 1000 Independence Avenue, 

SW., Washington, DC 20585, telephone 

202–287–1645. 

SUPPLEMENTARY INFORMATION: 

I. Introduction 

Under the Department’s unique 

Management and Operating (M&O) and 

other site management contracts, DOE 

reimburses its contractors for allowable 

costs incurred in providing employee 

pension and medical benefits to current 

employees and retirees who are eligible 

to participate in the contractors’ pension 

and medical benefit plans. DOE intends 

to continue its approach to reimbursing 

costs incurred by its contractors for 

these benefits consistent with 

Government-wide rules on cost 

allowability; however, DOE believes an 

examination of its policies and practices 

is appropriate to ensure prudent fiscal 

management of taxpayer dollars. 

In FY 2006, DOE reimbursed 46 

contractors a total of $1.077 billion for 

contractor employee pension and 

medical benefits—more than a 226 

percent increase since FY 2000. In 

addition, the Department in its FY 2006 

financial statement reported $11.9 

billion in accrued unfunded liabilities 

for contractor employee pension and 

medical benefits—a 68 percent increase 

since FY 2000. Costs and liabilities 

associated with these benefits are 

projected to grow over the next several 

years at a rate that significantly exceeds 

likely increases in the Department’s 

budget. 

To address these rising costs and 

liabilities, on April 27, 2006, DOE 

issued Department of Energy Notice 

351.1, Contractor Employee Pension and 

Medical Benefits Policy. This Notice 

updated and revised the Department’s 

policy concerning reimbursement of 

M&O and site management contractor 

pension and medical benefit costs. On 

June 19, 2006, the Secretary of Energy 

suspended implementation of the 

revised policy to permit consultation 

with stakeholders. 

II. Challenge Presented by Increasing 

Departmental Obligations to Reimburse 

Contractor Employee Benefits 

The Department of Energy is faced 

with the growing challenge of 

determining how to best balance its 

responsibility for funding important 

national missions, including energy and 

nuclear security, scientific discovery 

and innovation and environmental 

clean-up—with providing contractors 

sufficient flexibility to offer benefits that 

will attract and retain highly qualified 

workers and to treat incumbent 

contractor employees, retirees and 

dependents fairly. 

A. Background 

The Department of Energy relies on 

contractors to manage and operate its 

specialized scientific, engineering, 

production and clean-up sites and 

facilities. DOE is the only Federal 

agency that uses these unique M&O 

contracts to conduct its missions. 

The Department obligates 

approximately 80 percent of its 

estimated annual $24 billion budget to 

46 major cost-reimbursement contracts 

for management of DOE sites and 

facilities in 20 states. Pension and post 

retirement benefit programs sponsored 

by contractors include 45 contractor 

defined benefit pension plans, 37 

contractor defined contribution pension 

plans, 23 contractor life insurance 

plans, and approximately 260 contractor 

medical benefit plans. These benefits 

are provided to approximately 100,000 

active employees and 100,000 retirees, 

dependents and beneficiaries. Although 

DOE reimburses its contractors for 

certain costs associated with contractor 

employee benefits, DOE contractors 

employ their own workforces and 

sponsor and serve as fiduciaries for all 

benefit plans. 

Most DOE M&O and site management 

contractors provide defined benefit 

plans that are supplemented by defined 

contribution plans and generously 

subsidized medical benefit plans. 

According to Department of Energy 

market comparisons, on average, the 

pension benefits received by DOE 

contractor employees are higher than 

the benefits earned by Federal or private 

sector employees. In addition, on 

average, DOE contractor employees 

contribute less for their medical benefit 

costs than Federal employees or private 

sector workers. 

The scope of DOE’s obligations for 

contractor employee benefit costs is 

significant and growing. In FY 2006, the 

Department’s accrued unfunded 

liabilities associated with contractor 

employee pension and medical benefits 

were $11.9 billion. In FY 2006, DOE 

reimbursed its contractors $1.077 billion 

for pension and medical benefit plans. 

Costs and liabilities for these benefits 

are projected to grow at a rate that 

significantly exceeds projected increases 

in the Department’s budget. Absent 

actions to control benefit escalation, 

contractor benefit cost reimbursements 

will continue to increase. Further, the 

volatility and unpredictability of 

contractor benefit cost reimbursements 

will continue to make it difficult for the 

Department to plan and execute 

budgets. The Pension Protection Act of 

2006 generally accelerates required 

contributions to defined benefit pension 

plans and is expected to increase the 

amount that DOE reimburses contractors 

for pension benefits over the next 5 to 

7 years. 

B. Description of DOE Notice 351.1 

In April 2006, the Department of 

Energy issued Notice 351.1 to address 

concerns about contractor employee 

pension and medical benefits. However, 

due to concerns raised about the policy, 

in June 2006, it was suspended pending 

consultation with stakeholders. 

The goals of the Notice were to 

improve the Department’s stewardship 

of taxpayer dollars by mitigating the 

cost growth associated with benefit 

liabilities, moderating the volatility and 

improving the predictability of the 

Department’s cost reimbursement 

obligations for benefits, ensuring that 

costs for contractor employee pension 

and medical benefits are more 

consistent with market trends, and 

ensuring fairness to incumbent 

contractor employees. 

The major provisions of the Notice 

included continuing to reimburse 

contractors for costs for current and 

retired contractor employee pension and 

medical plans under existing contract 

provisions; requiring market-based 

defined contribution pension plans and 

market-based medical plans for new 

employees, except where to do so would 

be inconsistent with the terms of a 

collective bargaining agreement; 

requiring the Secretary of Energy to 

approve the costs of contractor proposed 

benefit augmentations; and separately 

assessing the value of pension and 

medical benefits to ensure that both are 

market-based. The policy also provided 

for the continuation of pension and 

medical benefit commitments made by 

contractors through collective 

bargaining agreements. 

Issued in Washington, DC on March 19, 

2007. 

Ingrid A.C. Kolb, 

Director of Management, U.S. Department of 

Energy. 

[FR Doc. E7–5545 Filed 3–26–07; 8:45 am] 

BILLING CODE 6450–01–P 


sroberts on PROD1PC70 with NOTICES