Research and Development: DOE Activities and Costs to Oversee Investments
Published: 2017-02-14T00:00:00

Fast Facts:
The Department of Energy invested $7.36 billion in civilian research and development at national laboratories, universities, and private companies in fiscal year 2015—supporting R&D in areas such as fundamental science, renewable energy, and nuclear energy.
How did it oversee these investments?
We found that Energy spent around $650 million in 2015 to help manage and oversee civilian R&D investments. Those funds paid for employees in headquarters, research, and site offices who conduct oversight activities, such as identifying research priorities, and monitoring and reviewing R&D projects via periodic assessments, site visits, and meetings.

Highlights:
section_title: Why GAO Did This Study
paragraphs: In fiscal year 2015, five DOE program offices and ARPA-E invested $7.36 billion for civilian R&D in DOE national laboratories as well as in universities, industry, and other entities. These civilian R&D investments (investments not related to nuclear security) supported diverse science and energy research areas, including energy efficiency, renewable energy, and nuclear energy. The five program offices and ARPA-E also obligated funds for staff to oversee these R&D investments—referred to as staff costs in this report—and include federal staff salaries and benefits, travel, support services, and other costs.
GAO was asked to review DOE's oversight of its civilian R&D investments. This report discusses (1) the activities selected DOE offices use to oversee investments in civilian R&D, and (2) staffing levels and costs associated with DOE oversight of civilian R&D.
GAO obtained staffing and obligations data from the five DOE program offices and ARPA-E that funded civilian R&D for fiscal years 2011-2015, the most recent years for which data was available; examined DOE policies, plans, and guidance; and interviewed DOE officials. GAO selected three of the five program offices for detailed review because they oversee nearly 90 percent of DOE's civilian R&D investments and 12 of the 13 national laboratories that primarily conduct civilian R&D. GAO used a broad definition of oversight, including any activity that directly or indirectly supported DOE's R&D mission. In commenting on a draft of this report, DOE generally agreed with GAO's findings.
section_title: What GAO Found
paragraphs: Three Department of Energy (DOE) program offices that GAO selected for detailed review—the offices of Energy Efficiency and Renewable Energy, Nuclear Energy, and Science—use various activities to oversee civilian research and development (R&D) investments.
Activities to identify research priorities . The program offices obtain input from multiple sources to help determine the areas in which DOE invests in research at its national laboratories, as well as in universities and industry. For example, the Office of Nuclear Energy sponsored workshops in 2015 that sought to identify ideas for advancing nuclear energy technologies.
Activities to oversee investments at national laboratories . The program offices require that the laboratories they oversee develop strategic plans to help ensure DOE investments in these laboratories support national R&D priorities. They also monitor and review individual laboratory R&D projects. For example, in fiscal year 2015, the Office of Science oversaw over 1,600 new or ongoing laboratory projects that received $3.67 billion in obligations. Finally, the program offices annually assess each laboratory contractor's scientific, technological, managerial, and operational performance.
Activities to oversee investments in universities, industry, and other entities . To help determine where DOE invests in civilian R&D, the program offices review R&D proposals from universities, industry, and other entities. According to data provided by DOE, in fiscal year 2015 the three program offices conducted or managed more than 5,600 proposal reviews—with each review including as many as 3 to 4 individual reviewers—and selected 1,490 proposals for new financial assistance awards. The program offices then monitored and periodically reviewed the awarded proposals.
Staffing levels for oversight of civilian R&D decreased by 11.0 percent from fiscal year 2011 to fiscal year 2015 in five DOE program offices—those noted above, plus two others that oversee a smaller percentage of DOE's civilian R&D investments—and in the Advanced Research Projects Agency-Energy (ARPA-E). At the same time, obligations for staff costs and civilian R&D investments increased by 2.4 percent and 3.8 percent, respectively, without adjusting for inflation (obligations declined slightly when adjusted for inflation). Staffing levels and costs changed to varying degrees among the offices and ARPA-E. For example, staff costs increased in three of the offices and ARPA-E but decreased in the other two offices. Obligations for staff costs made up 7.6 percent of total obligations (R&D and non-R&D obligations) in fiscal year 2015; they also varied among program offices and ARPA-E, ranging from 3.6 percent to 21.4 percent.

section_title: Letter
paragraphs: In fiscal year 2015, the Department of Energy (DOE) obligated $7.36  billion for civilian research and development (R&D) in diverse science and  energy research areas, including fundamental scientific research on  energy, energy efficiency, renewable energy, nuclear energy  technologies, fossil energy, energy security, and electricity infrastructure.  Of this $7.36 billion, $5.14 billion was obligated to 17 national laboratories  to conduct R&D and manage scientific facilities. DOE obligated the  remaining $2.22 billion in contracts, research grants and other forms of  financial assistance for R&D conducted by universities, industry, and  other entities, such as nonprofit organizations and state governments.
To ensure appropriate management of R&D at laboratories, universities,  and industry, DOE employs federal staff who oversee its investments.  These staff provide strategic direction on research priorities; solicit,  review, and award research proposals; monitor and evaluate research  projects; work to ensure that DOE laboratories and their scientific facilities  are managed appropriately by the laboratory contractors; monitor the  construction of scientific facilities; and administer contracts for  laboratories and financial assistance for universities, industry, and other  entities.
You asked us to review DOE’s oversight of its civilian R&D investments.  This report identifies (1) the activities that selected DOE offices use to  oversee civilian R&D investments, and (2) the staffing levels and costs  associated with DOE oversight of civilian R&D investments.
The scope of our review included the five DOE program offices within the  Office of the Under Secretary for Science and Energy that fund and  oversee civilian R&D, as well as the Advanced Research Projects  Agency-Energy (ARPA-E), a separate DOE agency that also funds and  oversees civilian R&D. The five program offices are:  the Office of Electricity Delivery and Energy Reliability,  the Office of Energy Efficiency and Renewable Energy,  the Office of Fossil Energy,  the Office of Nuclear Energy, and  the Office of Science.
For the purpose of identifying the oversight activities that these program  offices and ARPA-E use, and the associated staffing levels and costs, we  defined oversight broadly to include all activities that support the program  offices’ R&D missions. These included direct oversight activities, such as  oversight of individual R&D projects, as well as activities that indirectly  support DOE’s management of R&D, such as contract and financial  management and intellectual property legal counsel.
To identify activities that DOE program offices and ARPA-E use to  oversee civilian R&D investments, we reviewed documentation and  interviewed officials from all five program offices and ARPA-E. In  particular, we reviewed broad planning documents, such as DOE’s 2016  Science and Energy Plan, as well as documents specific to individual  program offices, such as Office of Science guidance for laboratory plans  and the Office of Energy Efficiency and Renewable Energy’s guidance for  funding university and industry projects. In addition, we selected three of  the program offices—the offices of Science, Energy Efficiency and  Renewable Energy, and Nuclear Energy—for detailed review because  they represent diverse energy and science research programs as well as a range in the technological maturity of the R&D that the offices support.  These three program offices oversee 12 of the 13 national laboratories  that primarily support civilian R&D, and they provide financial assistance  to universities and industry. In fiscal year 2015, these three offices  oversaw R&D that accounted for $6.58 billion, or about 90 percent, of the  total $7.36 billion in obligations for civilian R&D from the five program  offices and ARPA-E. For the three program offices we selected for  detailed review, we reviewed relevant regulations, orders, guidance  documents, and budget documents covering fiscal year 2011 to fiscal  year 2015. We cannot generalize the results of our detailed review of  these three program offices to ARPA-E, the Office of Electricity Delivery  and Energy Reliability, or the Office of Fossil Energy because the latter  three offices make much smaller investments in R&D, have significantly  fewer staff, or have a different management structure. To gain additional  context about DOE oversight activities at the national laboratories, we  visited a nongeneralizable sample of 4 of the 14 DOE site offices  collocated with national laboratories—specifically the Argonne and Fermi  site offices in Illinois; the Thomas Jefferson site office in Virginia; and the  Office of Science’s Integrated Support Center, which is collocated with  the Argonne National Laboratory in Illinois. Additionally, we interviewed  DOE site office officials and the contractors that manage the selected  laboratories. In particular, we obtained information from the officials about  the site offices’ role and primary responsibilities with respect to the  national laboratories, the practices the offices use to oversee contractors,  and the types of staff employed at the site offices. We selected the site  offices to obtain information representing a range in the sizes of  laboratories overseen by the offices. We also interviewed DOE officials or  otherwise obtained information from three site offices that we did not visit:  the National Renewable Energy Laboratory in Colorado; the Idaho  National Laboratory; and the National Energy Technology Laboratory,  which has locations in Oregon, Pennsylvania, and West Virginia.
To identify the staffing levels and costs associated with DOE oversight of  civilian R&D investments, we developed a data collection instrument  (DCI)—a structured set of data requests and related questions—that we provided to the five program offices that oversee civilian R&D and to  ARPA-E. The DCI included data requests and questions for the research  offices within the five program offices and ARPA-E and for the 14 site  offices collocated with DOE national laboratories. Before distributing the  DCI, we met with officials from each program office and ARPA-E to  discuss the clarity of our questions and the availability of the data we  requested, and we modified the DCI based on officials’ comments. In  requesting data from DOE, we defined oversight broadly to include any  DOE activities that support its R&D mission and that help ensure that  DOE’s R&D investments are efficient, effective, and appropriately  managed. The DCI requested information for fiscal year 2011 to fiscal  year 2015 on staffing levels and obligations for staff costs, as well as  information on investments in R&D. We also requested more detailed  information for fiscal year 2015 because that was the most recent year  with complete data; this information included details about the types of  staff employed in the offices at the end of the fiscal year, and on  laboratory work and financial assistance awarded during the fiscal year.  We assessed the reliability of the data we obtained from the DCI by  checking for obvious errors in accuracy and completeness and by  comparing the data with other sources of information, such as DOE  budget documents. We resolved data inconsistencies we found through  e-mail and phone communications with officials from the program offices  and ARPA-E. We determined that the data were sufficiently reliable for  reporting on DOE staffing levels and costs.
We conducted this performance audit from September 2015 to February  2017 in accordance with generally accepted government auditing  standards. Those standards require that we plan and perform the audit to  obtain sufficient, appropriate evidence to provide a reasonable basis for  our findings and conclusions based on our audit objectives. We believe  that the evidence obtained provides a reasonable basis for our findings  and conclusions based on our audit objectives.
subsections: section_title: Background
paragraphs: DOE invests in a wide range of civilian R&D programs that are managed  by five program offices within the Office of the Under Secretary for  Science and Energy, or by ARPA-E, which reports directly to the  Secretary of Energy. These offices have the goal of enhancing U.S.  security and economic growth through transformative scientific and  technological innovation, and through market solutions to overcome  science, energy, and environmental challenges that the United States  faces. These program offices and ARPA-E fund R&D that is conducted by  DOE national laboratories, universities, industry, nonprofit organizations,  state governments, and other federal laboratories. Each program office  and ARPA-E may fund R&D at any of the national laboratories. For  example, the Office of Science funds civilian R&D at all 17 of DOE’s  national laboratories, including the national laboratories sponsored by the  National Nuclear Security Administration (NNSA). Similarly, national  laboratories may receive funding from any of the program offices and  ARPA-E, as well as from other governmental agencies and  nongovernmental entities. The five program offices and ARPA-E fund  and oversee civilian R&D that aligns with their missions, as described  below:
The Office of Electricity Delivery and Energy Reliability’s mission is to  strengthen, transform, and improve U.S. electricity infrastructure and  to provide leadership to ensure that U.S. energy delivery systems are  secure, resilient, and reliable. The office does not oversee a national  laboratory but it is supported by staff located at the Office of Fossil  Energy’s National Energy Technology Laboratory.
The Office of Energy Efficiency and Renewable Energy’s mission is to  create and sustain American leadership in the transition to a global  clean energy economy. The office oversees the National Renewable  Energy Laboratory in Colorado.
The Office of Fossil Energy’s primary mission is to ensure reliable  fossil energy resources for clean, secure, and affordable energy while  enhancing environmental protection. The office oversees the National  Energy Technology Laboratory—with locations in Oregon,  Pennsylvania, and West Virginia—which is the only DOE national  laboratory operated by the government rather than a contractor.
The Office of Nuclear Energy’s primary mission is to advance nuclear  power as a resource capable of meeting the nation’s energy,  environmental, and national security needs by resolving technical,  cost, safety, proliferation resistance, and security barriers. The office  oversees the Idaho National Laboratory.
The Office of Science’s mission is to deliver scientific discoveries and  major tools that transform our understanding of nature and advance  the energy, economic, and national security in the United States. This  office is the nation’s single largest funding source for basic research in  the physical sciences, and supports research in energy sciences,  advanced scientific computing and other fields. The office oversees  10 of DOE’s national laboratories.
ARPA-E’s mission is to sponsor high-potential, high-impact energy  technologies that are considered too early for private-sector  investment. ARPA-E does not oversee a national laboratory.
Of the five program offices noted above, four consist of several types of  offices that manage and oversee DOE’s R&D investments; these four are  the offices of Energy Efficiency and Renewable Energy, Fossil Energy,  Nuclear Energy, and Science. First, each of these program offices has a  headquarters office in the Washington, D.C. area that includes senior  leadership and that may include offices that provide support across the  program office, such as policy development and oversight, budget, public  relations and congressional outreach, and technical assistance programs  as well as other administrative and support units. According to DOE  officials, the extent to which staff functions are centralized in  headquarters offices varies across program offices. Second, the program  offices include research offices, generally collocated with headquarters  offices, that manage particular scientific areas and research portfolios and  provide strategic direction for these areas. For example, the Office of  Science includes six research offices that steward different scientific  areas. Third, the program offices have site offices—collocated with each  national laboratory—that manage the laboratory contracts, oversee  federal facilities at the laboratories and, in some cases, manage financial  assistance awards to universities and industry, as well as other  contracts.
ARPA-E and the other program office—the Office of Electricity Delivery  and Energy Reliability—make smaller R&D investments, have  significantly fewer staff, and do not oversee a national laboratory. As a  result, they are organized differently from the other four program offices.  According to an ARPA-E official, all ARPA-E staff are located at a central  office, and research projects are organized around individual program  directors. In the case of the Office of Electricity Delivery and Energy  Reliability, the office has one suboffice that is dedicated to research and  development; other suboffices are dedicated to regulatory or coordination  functions.
Figure 1 lists ARPA-E and the five program offices we reviewed, along  with research offices and site offices within those program offices.
Figure 2 shows the locations of the 13 national laboratories that primarily  conduct civilian R&D under the oversight of the program offices we  reviewed. This figure does not include the 4 other DOE national  laboratories that may also conduct civilian R&D for the offices we  reviewed.
Of the 13 national laboratories that primarily focus on civilian R&D for  DOE, 12 are owned by the federal government and are operated by  management and operating (M&O) contractors. The R&D funded by  DOE is carried out under the department’s direction and is managed by  scientists, engineers, and others employed by the laboratory contractor.  The remaining national laboratory—the National Energy Technology  Laboratory—is operated by DOE. Therefore, the scientists and engineers  who conduct the R&D at this laboratory are primarily federal employees.
In addition to M&O contracts that DOE enters into for the operation of the  national laboratories, DOE program offices and ARPA-E provide financial  assistance—primarily grants and cooperative agreements—to support  R&D at universities, industry, and other entities. Under the Federal  Grant and Cooperative Agreement Act, an agency is to use a grant  agreement when the principal purpose of the relationship is to transfer a  thing of value to the recipient to carry out a public purpose authorized by  law, and substantial involvement by the agency is not expected. For  grants, an agency’s involvement is essentially administrative, and  includes standard federal stewardship responsibilities such as reviewing  performance to ensure that the objectives, terms, and conditions of the  grant are met. In contrast, cooperative agreements differ from grants in  that an agency expects to be substantially involved in the project through  tasks such as reviewing and approving one stage of a project before work  can begin on a subsequent stage.
section_title: DOE Uses Various Activities to Oversee Investments in Civilian R&D at National Laboratories, Universities, and Industry
paragraphs: The three program offices we selected for detailed review—the offices of  Energy Efficiency and Renewable Energy, Nuclear Energy, and  Science—use various activities to oversee DOE civilian R&D investments  in national laboratories, universities, industry, and other entities: these  investments totaled $7.36 billion in obligations in fiscal year 2015. The  activities these three offices used included activities to:  identify research priorities and help determine where to invest in R&D, help ensure that national laboratories conduct R&D in alignment with  DOE priorities and that M&O contractors manage the research and  federally owned properties at the laboratories safely and efficiently,  and help ensure that universities, industry, and other entities are meeting  research goals as defined in financial assistance agreements.
subsections: section_title: DOE Activities to Identify Research Priorities and Help Inform Investment Decisions
paragraphs: For all investments, including those in DOE’s national laboratories,  universities, industry, and other entities, the three selected program  offices engage in activities to obtain input from multiple sources to identify  research priorities and to help inform where DOE invests in R&D.
To help identify specific research priorities, these three program offices  review objectives established in the DOE strategic plan and other DOE  documents, such as the Quadrennial Energy Review and the Quadrennial  Technology Review. These DOE documents are in turn influenced by  national policies such as the President’s Climate Action Plan of 2013. For  example, one of the objectives of DOE’s strategic plan is to advance  sustainable hydropower technologies in order to help double renewable  energy generation in the United States between 2012 and 2020, a goal of  the President’s Climate Action Plan.
Additionally, the program offices hold scientific and technical workshops  with the scientific community—scientists and researchers in universities,  industry, and government—to help identify priority research areas that, if  supported, could contribute to overcoming barriers to advancing particular  energy technologies. For example, the Office of Nuclear Energy  sponsored a series of workshops in 2015 that sought to identify ideas for  advancing nuclear energy technologies.
Furthermore, the program offices have established federal advisory  committees that provide expert input on particular knowledge gaps or  infrastructure needs at the national laboratories. For example, in 2014 a  panel of the federal advisory committee for the High Energy Physics  research office issued a long-term plan for supporting particle physics,  including recommending upgrades at a number of accelerator facilities,  such as at the Fermi National Accelerator Laboratory.
DOE program offices also engage in other activities to help develop  research priorities, such as attending conferences, regularly reviewing  published literature, regularly meeting with national laboratory staff, and  engaging with interagency working groups. In addition, according to DOE  officials, new ideas often come from the scientific community in the form  of proposals submitted in response to solicitations from the program  offices.
section_title: DOE Oversight Activities for R&D Investments in National Laboratories
paragraphs: To help ensure that DOE civilian R&D investments in national laboratories  ($5.14 billion in obligations in fiscal year 2015) align with DOE priorities,  and that M&O contractors manage research and federally owned  properties safely and efficiently, the offices of Energy Efficiency and  Renewable Energy, Nuclear Energy, and Science carry out three broad  types of activities for their respective national laboratories. We identified  these activities through reviews of DOE documents and interviews with  officials from DOE’s program offices and site offices.
First, the three program offices conduct planning activities to help ensure  that DOE investments in the laboratories support national R&D priorities.  For example, the program offices require that each M&O contractor that  operates a national laboratory develop a long-term strategic plan for its  laboratory. The DOE program offices and the relevant site office staff  review the plans and provide feedback to the laboratory contractor. These  plans can identify the laboratory’s vision for the future, core capabilities,  major initiatives, and laboratory infrastructure needs, among other things.
The three program offices conduct this process with their laboratories on  an annual basis. Complementary to this, program offices may also  develop their own strategic planning documents. For example, within the  Office of Energy Efficiency and Renewable Energy, research offices  develop strategic “roadmaps” that establish a vision with broad and long- range goals to provide overall program direction. Some offices also  develop multi-year program plans, which are operational guides for how  research offices will manage their activities.
Second, research offices and site offices conduct various oversight  activities of the new and ongoing R&D projects and scientific facilities that  DOE invests in at the national laboratories.
As of the beginning of fiscal year 2016, the  offices of Energy Efficiency and Renewable  Energy, Nuclear Energy, and Science  supported and oversaw 32 designated user  facilities that were primarily located at national  laboratories. A designated user facility is a  federally sponsored research facility available  for external use to advance science or  technology. These facilities are open to  researchers and scientists without regard to  nation of origin or institutional affiliation.  Potential users may be allocated time in the  facilities after a merit review of the proposed  work. Users of the facilities are not charged a  fee if they publish research results in open  literature; for proprietary work that is not  disclosed publicly, the user is charged full cost  recovery.   Each of these designated user facilities  represents a significant investment of federal  funds. For example, according to DOE  documents, the Advanced Photon Source, one  of four designated user facilities at the  Argonne National Laboratory in fiscal year  2015, was completed in 1995 at a cost of $812  million. Since then, DOE has funded more  than $100 million in upgrades. The facility  produces x-rays that allow scientists to  conduct research on the structure and function  of materials—for example, to aid in the  development of new pharmaceuticals.
Research offices solicit research proposals from national  laboratories. This proposal solicitation helps the offices determine  where to invest DOE funds. The national laboratories submit work  proposals for new and ongoing projects, and research office staff  review these proposals and hold merit reviews—often with outside  experts— to help determine which laboratory projects to invest in.  According to information provided by the Office of Science, research  offices conduct in-depth merit reviews for new laboratory work  proposals, and most research offices review about one-third of  ongoing laboratory projects each fiscal year; these reviews generally  consist of three or more individual peer reviewers. For example,  according to the Basic Energy Sciences research office, which is one  of the Office of Science’s six research offices, in fiscal year 2015  research office staff reviewed approximately 132 of 395 ongoing  laboratory projects, in addition to 64 new work proposals.
Research office staff monitor project performance. These staff  conduct this monitoring through other periodic reviews, site visits, and  regular meetings or phone calls with laboratory management and  project staff, according to DOE officials. DOE officials told us that a  significant portion of research office activities involved overseeing the  large number of ongoing projects at the national laboratories. For  example, according to information provided by the Office of Science,  in fiscal year 2015, its research office staff oversaw more than 1,600  new or ongoing projects that received $3.67 billion in obligations that  fiscal year. Project size, risk, technological maturity, and other factors  can influence how often research office staff review these laboratory  projects or meet with project staff. For example, according to officials  in the Office of Nuclear Energy, contractors must submit quarterly  project reports, and the office holds formal monthly reviews in which  laboratory projects are evaluated against performance metrics.  Likewise, for Office of Science construction projects, research offices  collaborate with site office staff and review projects to ensure they  meet their technical, cost, scope and schedule milestones, according  to DOE officials.
Site offices ensure that laboratory M&O contractors meet  contract requirements. For example, one such requirement is that  the contractor have a contractor assurance system to oversee its  performance and to self-identify and correct potential problems.  Each M&O contractor must establish a contractor assurance system  that includes management systems and processes to generate the  information needed to manage and improve the contractors own  performance. Site office staff are responsible for reviewing,  monitoring, and assessing the effectiveness of the system to ensure it  is working and meets contract requirements. A contractor assurance  system also allows site office staff to monitor the contractors own  internal assessments and reviews, thereby reducing the number of  reviews that the site office otherwise might conduct. For example,  Argonne site office officials told us that the Argonne National  Laboratory M&O contractor self-identified and corrected a radiation  inventory problem at a laboratory building and kept site office staff  informed of laboratory actions.
Site office staff conduct independent and joint reviews. These  staff conduct their own independent reviews, as well as joint reviews  with contractor staff, of laboratory facilities to ensure federal  properties are being managed safely and efficiently. For example,  according to information provided by the Golden Field Office, in fiscal  year 2015, site office staff conducted 366 safety and health reviews at  the National Renewable Energy Laboratory. Examples of these  reviews include construction project safety inspections; laboratory  inspections, readiness verifications, compliance visits, and risk  assessments of the laboratory safety and health programs; and  assessment of lab performance. Site office staff also conducted  hundreds of other reviews in areas such as environmental oversight,  physical and cyber-security, and financial oversight.
Site offices are responsible for administering the M&O contracts.
This responsibility includes taking actions such as modifying the  contract to add funding for laboratory work or to incorporate new  applicable directives from DOE and the Office of Management and  Budget. According to site office staff we interviewed, the incorporation  of new directives into an M&O contract is an ongoing effort that  requires coordination with the contractor and often negotiation about  the terms added to the contract. For example, according to officials at  one site office, to address a new DOE order that called for particular  safety management procedures at DOE facilities, officials tailored  the contract so that the new contract language would apply to only the  scientific user facility with the highest risk at the laboratory—this  action reduced the number of safety management procedures  required of the contractor while complying with the new order.
Site offices must have specific staff to oversee construction and  upgrades. These staff—referred to as federal project directors— oversee the construction of any new scientific facilities or upgrades to  existing facilities. These federal project directors also may be  assigned from a site office or from the Office of Science’s Integrated  Support Center to a project site other than a national laboratory. For  example, according to DOE officials, a federal project director at the  Integrated Support Center is responsible for overseeing construction  of the Facility for Rare Isotope Beams at Michigan State University, a  $730 million project.
Site offices may conduct other activities to provide centralized  support to other site offices and the larger program office. Areas  of support include intellectual property and other legal services,  procurement, human resources, information technology, and safety  and security. Within the Office of Science, many of these activities are  provided by the Integrated Support Center. The Idaho Operations  Office and the Golden Field Office provide many of these services to  the Office of Nuclear Energy and the Office of Energy Efficiency and  Renewable Energy, respectively.
Third, at the end of each fiscal year, program offices use a performance  evaluation and measurement plan to assess each laboratory contractor’s  scientific, technological, managerial, and operational performance. The  plan is developed collaboratively by the responsible program office,  including the site office, and the laboratory M&O contractor before each  fiscal year, and it helps form the basis for the evaluation of the laboratory  contractor at the end of the year. Research office staff are responsible  for evaluating laboratory mission-related areas of the plan, including the  contractor’s ability to deliver science and technology to meet DOE  missions. Site office staff evaluate the contractor’s operations at the  laboratory, including the use of the contractor assurance system,  according to DOE documents and officials. Results from this performance  evaluation inform the contractor’s award fee determination as well as the  possibility of earning additional years on the contract through an award  term extension.
section_title: DOE Oversight Activities for R&D Investments in Universities, Industry, and Other Entities
paragraphs: The offices of Energy Efficiency and Renewable Energy, Nuclear Energy,  and Science use various processes to help oversee DOE’s civilian R&D  investments in universities, industry, and other entities ($2.22 billion in  obligations in fiscal year 2015). Research office staff in these three  program offices develop solicitations—also referred to as funding  opportunity announcements—for R&D proposals from universities,  industry, and other entities. They then conduct or manage merit reviews  of submitted proposals, an activity that generally includes independent  reviews from technical, subject matter experts. Research office staff  identify and recruit teams of experts for these merit reviews. According to  DOE officials, program managers take these expert reviews into  consideration, along with factors such as portfolio balance and available  funds, before making funding recommendations to DOE leadership.  According to data provided by DOE, research office staff in the five  program offices and ARPA-E conducted or managed more than 6,600  proposal reviews—with reviews consisting of as many as 3 or 4 individual  reviewers—to select 1,691 new financial assistance awards in fiscal year  2015.
In addition to overseeing new proposals from universities and industry,  research office staff oversee thousands of projects that were awarded in  previous years, also known as continuing awards. As shown in table 1  below, in fiscal year 2015, DOE research offices oversaw 4,921  continuing awards (projects).
Research offices may oversee projects differently, depending on factors  such as the maturity of the science or technology, the size and complexity  of the work, the size and makeup of the awardees (single institution vs.  multi-institution), and the risk of the project, according to DOE officials.  Research office staff tailor the level of oversight to the size, scope, and  complexity of the project to ensure awardees are meeting research goals  as defined in the proposal award agreement. Office of Science officials  told us they generally receive annual reports from awardees and have  annual project reviews for small financial assistance awards. These  officials told us that for larger and more complex grants and cooperative  agreements, there may be significantly more oversight, such as through a  greater frequency of meetings and progress reports. The Office of Energy  Efficiency and Renewable Energy and the Office of Nuclear Energy,  which primarily invest in applied research and development projects,  typically use cooperative agreements instead of grants, as cooperative  agreements allow substantial federal involvement in the projects to help  ensure that projects meet specific program office technology goals. These  program offices may use a range of oversight activities to help ensure  projects succeed. For example, according to Office of Energy Efficiency  and Renewable Energy officials, program and project managers follow  guidance that requires quarterly project reviews, annual site visits,  frequent in-person meetings, and bi-annual peer reviews of the entire  project portfolio—a more active management and oversight level than  required for small grants. In addition, all financial assistance projects in  the Office of Energy Efficiency and Renewable Energy are required to  meet certain milestones, and projects that do not meet these milestones  could lose funding.
To complement project oversight by research office staff, site office staff  provide administrative support for financial assistance awards.  Specifically, the Golden Field Office in the Office of Energy Efficiency and  Renewable Energy, the Idaho Operations Office in the Office of Nuclear  Energy, and the Integrated Support Center in the Office of Science  administer awards through activities such as preparing solicitations,  negotiating award terms with recipient institutions, and closing out  awards, among other things. According to information provided by  these program offices, in fiscal year 2015, the offices managed $1.82  billion in obligations for thousands of new and continuing financial  assistance awards. DOE officials indicated that financial assistance  awards that did not receive obligations also required support. For  example, according to information provided by the Office of Energy  Efficiency and Renewable Energy, in addition to managing obligations for  new and continuing financial assistance awards in fiscal year 2015, the  Golden Field Office administered another 1,625 awards that had  previously received obligations as well as awards that were completed  and were in the process of closing out.
section_title: DOE Staffing Levels to Oversee Civilian R&D Investments Declined from Fiscal Year 2011 to Fiscal Year 2015, and Staff Costs Increased Slightly
paragraphs: From fiscal year 2011 to fiscal year 2015, DOE staffing levels for  oversight of civilian R&D investments declined by 11.0 percent, while  obligations for the civilian R&D that the staff oversaw increased by 3.8  percent. The obligations for staff costs of DOE oversight of civilian R&D  increased by 2.4 percent overall from fiscal year 2011 to fiscal year 2015,  and these costs varied among the five program offices and ARPA-E. DOE  obligations for staff costs decreased 4.0 percent over this period when  adjusted for inflation.
subsections: section_title: Staffing Levels for DOE Oversight of Civilian R&D Declined from Fiscal Year 2011 to Fiscal Year 2015 as Obligations for Such R&D Increased
paragraphs: From fiscal year 2011 to fiscal year 2015, DOE staffing levels for  oversight of civilian R&D—including staff in the five DOE program offices  and ARPA-E—declined from 2,937 to 2,613 full-time equivalent  employees, a decrease of 11.0 percent. Four of the five DOE program  offices accounted for the entire decline in staffing levels. In contrast,  ARPA-E staffing levels increased over this period as the agency  expanded (see fig. 3 below). Appendixes I and II present further data on  staffing levels in the five program offices and ARPA-E, as well as data on  staff costs and R&D obligations.
According to information provided by DOE, a number of factors  contributed to staffing level declines. For example, according to  information provided by the Office of Energy Efficiency and Renewable  Energy, the completion of projects associated with the American  Recovery and Reinvestment Act (ARRA) resulted in a reduction in staff  brought on board to manage these projects. Other offices attributed  changes in staffing to causes such as budgetary pressures and voluntary  separation programs. One site office we visited reported that as  employees left or retired, the office did not fill open billets; instead, the  office spread the responsibilities among remaining staff. Office  reorganizations also contributed to staffing declines. For example, Office  of Science officials reported to us that the office consolidated many of its  support functions, including human resources and legal services, which  resulted in a 10 percent reduction in staff over several years, with further  reductions planned for fiscal year 2016.
As staff levels decreased overall, the five DOE program offices and  ARPA-E were responsible for overseeing and implementing civilian R&D  obligations that increased from $7.09 billion in fiscal year 2011 to $7.36  billion in fiscal year 2015, an increase of 3.8 percent. Civilian R&D  obligations from the program offices changed by varying degrees over  this period, ranging from a decrease of 23.3 percent in the Office of  Electricity Delivery and Energy Reliability (a decrease of 28.1 percent  when adjusted for inflation) to an increase of 8.8 percent in the Office of  Nuclear Energy (an increase of 1.9 percent when adjusted for inflation).  ARPA-E’s civilian R&D obligations experienced a more than 100-fold  increase because the agency, which was founded and initially funded in  2009, grew significantly during the period under review.
section_title: Overall Obligations for Staff Costs of DOE Oversight of Civilian R&D Increased Slightly from Fiscal Year 2011 to 2015, and Varied among Program Offices and ARPA-E
paragraphs: Total obligations for staff costs to oversee DOE’s civilian R&D  investments increased from $632.9 million in fiscal year 2011 to $647.9  million in fiscal year 2015—an increase of 2.4 percent during the period  under review (a decrease of 4.0 percent when adjusted for inflation).  Staff costs include salaries and benefits, travel, support services, and  other costs, such as contributions to DOE’s working capital fund for  common administrative services such as building occupancy and network  and telephone services. The extent of the change in staff costs varied  among the five DOE program offices and ARPA-E from fiscal year 2011  to fiscal year 2015. Over this period, the change in obligations for staff  costs in DOE’s five program offices ranged from a decrease of about 8  percent each at the Offices of Nuclear Energy and Science (a decrease of  about 14 percent when adjusted for inflation), to an increase of 16.0  percent at the Office of Electricity Delivery and Energy Reliability (an  increase of 8.8 percent when adjusted for inflation). ARPA-E’s obligations  for staff costs more than doubled and staff levels increased.
The overall increase in obligations for staff costs would have been greater  if DOE had received the full amount it requested in appropriations,  according to DOE officials. According to these officials, while staff costs are determined by DOE offices based on staffing plans and estimated  staffing needs, the appropriations provided by Congress establish an  upper limit to staff costs and may not represent DOE budget requests for  the program offices and ARPA-E. For example, in fiscal year 2015, DOE  requested $189.4 million for staff costs for the Office of Science and was  appropriated $183.7 million.
Of the $647.9 million that DOE obligated for staff costs in fiscal year  2015, $179.9 million (27.8 percent) was for headquarters office staff,  $173.5 million (26.8 percent) was for research office staff, and $294.6  million (45.5 percent) was for site office staff, as shown in table 2 below.  For further information about the functions performed by these staff, see  appendix I.
The obligations for total staff costs as a percentage of total obligations  (R&D and non-R&D obligations) varied among the program offices and  ARPA-E (see fig. 4). For example, in fiscal year 2015, the percentage  ranged from 3.6 percent in the Office of Science to 21.4 percent in the  Office of Electricity Delivery and Energy Reliability. Staff costs as a  percentage of total obligations across all the program offices and ARPA-E  was 7.6 percent in fiscal year 2015.
DOE officials did not identify discrete causes for variations in obligations  for staff costs as a percentage of R&D obligations, but we identified  several factors that can contribute to such variations through our  discussions with DOE officials and a review of DOE documents. These  factors include:
The extent to which an office uses cooperative agreements  instead of grants. As discussed above, cooperative agreements are  to be used when an agency anticipates that substantial federal  involvement in performance or project activities may be necessary.  DOE officials said that cooperative agreements may incur higher staff  costs than grants because of this increased involvement. According to  DOE officials, program offices that invested primarily in applied R&D  typically used cooperative agreements.
The extent to which an office supports non-R&D activities.
Obligations for non-R&D activities, such as regulatory support, come  out of staff costs and may have limited or no corresponding R&D  obligations, thus increasing staff costs’ share of the total. For  example, the Office of Electricity Delivery and Energy Reliability  issues permits for construction of electrical transmission lines that  cross national boundaries, and the office coordinates with the  Department of Homeland Security on electrical grid issues in  emergency planning. In fiscal year 2015, 64.5 percent of the office’s  total obligations were for R&D activities ($86.5 million of $134.1  million in total obligations); in contrast, 36.7 percent of obligations for  staff costs was to oversee R&D ($10.5 million of $28.7 million  obligated in staff costs).
Other factors unique to certain offices. For example, ARPA-E  obligations for staff costs in fiscal year 2015 included support for 52  federal staff as well as 49 support services contractors, a greater  proportion of contractors than in the five program offices. In addition,  fiscal year 2015 obligations for staff costs in the Office of Energy  Efficiency and Renewable Energy supported ARRA projects, even  though there were no R&D obligations for these projects during this  period. In particular, program office staff continued to manage and  close out ARRA awards until the end of fiscal year 2015.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this report to DOE for its review. DOE provided  written comments, which we have reprinted in appendix III. DOE also  provided technical comments, which we incorporated as appropriate  throughout our report.
In its written comments, DOE stated that it generally agreed with the  summarized statements in the draft report. In addition, DOE stated that its  program offices and ARPA-E are structured differently to address their  unique mission needs and oversight responsibilities, and that it is not  appropriate to make staff comparisons across the different offices as staff  functions vary. We believe that side-by-side analyses of the number of  staff and staff functions across the DOE program offices and ARPA-E are  appropriate as we requested similar data from all of the DOE program  offices and ARPA-E. Moreover, where we did compare data, we did not  draw conclusions from the comparisons, and we explained the  differences in office structures to provide context. For further context, we  added clarifications and details as suggested to us by DOE officials.
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If you or your staff have any questions about this report, please contact  me at (202) 512-3841 or neumannj@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on  the last page of this report. GAO staff who made key contributions to this  report are listed in appendix IV.
section_title: Appendix I: Staff Oversight Functions in DOE Headquarters, Research, and Site Offices, Fiscal Year 2015
paragraphs: Program office and Advanced Research Projects Agency-Energy (ARPA- E) activities to oversee civilian research and development (R&D)  investments were split among staff in headquarters offices, research  offices, and site offices, where the staff performed various functions.
subsections: section_title: Site Office Staffing and Functions
paragraphs: The role of the site offices is to manage the management and operating  (M&O) contracts with laboratories and oversee federal facilities. The  composition of site office staff varies depending on the characteristics of  the laboratory and the responsibilities of the individual site office; this  composition can range from contracting officers to federal project  directors and environmental, health, and safety inspectors. For example,  the Idaho Operations Office is responsible for 331 federal properties at  the Idaho National Laboratory, including overseeing the safety and  management of 17 nuclear facilities and the storage of nuclear materials.  DOE guidelines require a risk determination for such facilities that in turn  dictates the number of federal representatives who are assigned to  conduct health and safety oversight at each facility. These factors  contributed to the Idaho Operations Office having 44 environmental,  health, safety, and quality staff, out of 188 total staff. In contrast, the  Office of Energy Efficiency and Renewable Energy reported that it had a  similar number of total staff at the Golden Field Office and the National  Energy Technology Laboratory but fewer environmental, health, safety,  and quality staff.
In addition, site offices also include other staff who indirectly support  oversight. For example, the Golden Field Office, the Idaho Operations  Office, and the Integrated Support Center include significant numbers of  staff who provide contract and finance support or information technology  support, or who are intellectual property lawyers (see table 4).
section_title: Appendix II: Data on R&D Obligations, Staff Totals, and Obligations for Staff Costs for DOE Offices, Fiscal Years 2011-2015
paragraphs: To learn about staffing levels and costs associated with Department of  Energy’s (DOE) offices that oversee research and development (R&D)  investments, we developed a data collection instrument that we sent to  the five program offices and the Advanced Research Projects Agency- Energy (ARPA-E). The data collection instrument asked for information  on program office obligations for R&D, obligations for federal staff, and  the composition of program office staffs. The DOE program offices  provided the data in the tables below.
The tables below show data by program office and ARPA-E from fiscal  year 2011 to fiscal year 2015, including obligations for R&D provided to  (1) the national labs and (2) universities and private industry, as well as  the number of full-time equivalent staff in each office and staff costs.
Advanced Research Projects Agency–Energy (ARPA-E)
section_title: Appendix III: Comments from the Department of Energy
section_title: Appendix IV: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Joseph Cook (Assistant Director),  Matthew J. Ambrose, and David Messman made key contributions to this  report. Also contributing to this report were Camilo Flores, Justin S.  Fisher, Richard Johnson, Mae Liles, Cynthia Norris, and Dan C. Royer.