DOE’s missions encompass energy resources, scientific and technological development, environmental cleanup, and nuclear security. DOE established EM in 1989 to carry out the mission to clean up radioactive wastes, spent nuclear fuel, excess plutonium and uranium, contaminated facilities, and contaminated soil and groundwater that resulted from nuclear weapons production and government-sponsored nuclear energy research. NNSA, a separately organized agency within DOE, has primary responsibility for ensuring the safety, security, and reliability of the nation’s nuclear weapons stockpile, including life extension programs for multiple weapon types in the U.S. stockpile, for promoting nuclear nonproliferation, and for naval reactor programs. In fiscal year 2013, EM and NNSA received about $17 billion to support these programs and related activities, which is approximately 60 percent of DOE’s total budget. Figure 1 shows the fiscal year 2013 funding for EM, NNSA, and other DOE programs and activities. Contractors operate DOE sites and often conduct their work under management and operating (M&O) contracts. These contracts provide the contractor with discretion in carrying out the mission of the particular contract. Currently, DOE spends 90 percent of its annual budget on contracts, making it the largest non–Department of Defense contracting agency in the government. As we have reported in the past decade, DOE continues to face challenges managing its major projects and programs, which have incurred significant cost increases and schedule delays in several instances. Some recent examples include: As we reported earlier this month, NNSA estimates that the project to build the Uranium Processing Facility (UPF) at the Y-12 National Security Complex in Oak Ridge, Tennessee, will cost between five and seven times more than previously thought and will be completed over a decade behind schedule. NNSA estimated in 2004 that the UPF would cost from $600 million to $1.1 billion to construct and would start operating in 2012. As of June 2012, estimates were revised to a cost range from $4.2 billion to $6.5 billion and a 2023 date for the start of operations. In June 2012, the Deputy Secretary of Energy approved the latter cost range and schedule and deferred significant portions of the original project scope. Two months later, the UPF contractor concluded that UPF’s roof would have to be raised 13 feet and that the start of construction would be further delayed, resulting in approximately $540 million in additional costs. As we reported, these problems occurred because the contractor did not adequately manage and integrate the design work subcontracted to four other contractors. Given these additional costs and DOE’s stated plan to pay for these additional costs from its contingency fund, it is unclear if the cost range estimate approved in June 2012 remains valid. In March 2013, we reported preliminary observations from our ongoing review of NNSA’s Plutonium Disposition Program that highlight the need for continued efforts by DOE to improve contract and project management. We reported DOE is currently forecasting an increase in the total project cost for the MOX Fuel Fabrication Facility at the Savannah River Site in South Carolina from $4.9 billion to $7.7 billion and a delay in the start of operations from October 2016 to November 2019. According to NNSA officials and the contractor for the MOX facility, inadequately designed critical system components, such as the gloveboxes to be used for handling plutonium and the infrastructure needed to support these gloveboxes, are among the primary reasons for the proposed cost increase and schedule delay. The performance baseline for the MOX facility was set several years before NNSA issued guidance in 2012 to set cost and schedule baselines only after design work is 90 percent complete. As part of our ongoing review of NNSA’s Plutonium Disposition Program, we are evaluating whether such guidance would have been useful for NNSA to apply to the MOX facility, as well as the potential impact this guidance might have had on mitigating cost increases and schedule delays. In December 2012, we reported that the estimated cost to construct the Waste Treatment and Immobilization Plant in Hanford, Washington, had tripled to $12.3 billion since its inception in 2000 and that the scheduled completion date had slipped by nearly a decade to 2019. We reported that DOE’s incentives and management controls were inadequate for ensuring effective project management, and DOE had in some instances prematurely rewarded the contractor for resolving technical issues and completing work. DOE generally agreed with the several recommendations we made to improve Waste Treatment and Immobilization Plant projects and contract management. In May 2013, we reported that significant technical challenges at the Waste Treatment Plant remained unresolved, contributing to uncertainty as to whether the project will operate safely and effectively. We also reported in December 2012 on progress by EM and NNSA in managing nonmajor projects (i.e., those costing less than $750 million). We found that of the 71 nonmajor projects that EM and NNSA completed or had under way from fiscal years 2008 to 2012, 21 met or are expected to meet their performance targets for scope, cost, and completion date. However, 23 projects did not meet or were not expected to meet one or more of those three performance targets. We also noted that, for 27 projects, many had insufficiently documented performance targets for scope, cost, or completion date, which prevented us from determining whether they met their performance targets. As a result, we recommended, among other things, that EM and NNSA clearly define, document, and track the scope, cost, and completion date targets for each of their nonmajor projects. EM and NNSA agreed with our recommendations. As we noted in our February 2013 high-risk update, we have shifted our focus to major contracts and projects, but we will continue to monitor the performance of nonmajor projects. In April 2010, we reported that weak management by DOE and NNSA had allowed the cost, schedule, and scope of ignition-related activities at the National Ignition Facility to increase substantially. We reported that, since 2005, ignition-related costs have increased by around 25 percent—from $1.6 billion in 2005 to over $2 billion in 2010—and that the planned completion date for these activities had slipped from the end of fiscal year 2011 to the end of fiscal year 2012 or beyond. We made several recommendations to address program management weaknesses—which NNSA agreed with—and we are currently monitoring their implementation. Ten years earlier, in August 2000, we had reported that poor management and oversight of the National Ignition Facility construction project at Lawrence Livermore National Laboratory had increased the facility’s cost by $1 billion and delayed its scheduled completion date by 6 years. In March 2009, we reported that NNSA and the Department of Defense had not effectively managed cost, schedule, and technical risks for the B61 nuclear bomb and the W76 nuclear warhead refurbishments. For the B61 life extension program, NNSA was only able to stay on schedule by significantly reducing the number of weapons undergoing refurbishment and abandoning some refurbishment objectives. We made a number of recommendations to improve the management of the nuclear weapons refurbishment process. NNSA agreed with these recommendations, and we are monitoring their implementation. We are currently assessing DOE cost estimating policies and practices and plan to issue a report based on this work later this year. DOE’s actions to improve project management appear promising, but their impact on meeting cost and schedule targets may not be clear. Because all ongoing major projects have been in construction for several years, neither EM nor NNSA has a major project that can yet demonstrate the impact of DOE’s recent reforms. As we testified before this Subcommittee in March 2013, reviews of the July 2012 security breach at the Y-12 National Security Complex identified numerous, long-standing, and systemic security issues across the nuclear security enterprise, and significant safety problems remain at DOE sites that have not been fully addressed. Some examples from our recent work include: With regard to security, as we testified in March 2013, investigations of the security breach at the Y-12 National Security Complex performed by NNSA, the DOE Office of Inspector General, and the DOE Office of Independent Oversight found problems with NNSA’s and its contractors’ performance, including problems with the complex’s physical security systems, such as alarms, and the training and response of the heavily armed guards supplied by NNSA’s protective force contractor. In addition, both a NNSA Security Task Force and an independent panel convened at the request of the Secretary of Energy and composed of three former executives from federal agencies and the private sector found systemic security issues across the nuclear security enterprise. Both the Secretary’s panel and the NNSA Security Task Force’s leader found deficiencies in DOE’s security culture and oversight, with some of these being closely matched to issues we identified a decade earlier. DOE took a number of actions in response to the security breach and the findings of the panel and task force. These actions included, among other things, immediate actions to repair security equipment, as well as longer-term actions that aim to improve NNSA and DOE oversight of security. As we testified in March 2013, in assessing DOE’s actions regarding security and NNSA’s new security oversight process, a central question will be whether they lead to sustained improvements in security at the Y-12 National Security Complex and across the nuclear security enterprise. We have ongoing work assessing DOE security reforms and plan to issue a report based on this work later this year. With regard to safety, in September 2012 we testified before this Subcommittee about NNSA management weaknesses that have contributed to persistent safety problems at NNSA sites, including lax attitudes toward safety procedures, inadequacies in identifying and addressing safety programs with appropriate corrective actions, and inadequate oversight by NNSA site offices.