DOE-EM lacks clear view of operating costs, GAO says

The GAO also noted that the DOE has not assessed whether its approach to awarding contracts for noncleanup work is cost effective.

The report, DOE Nuclear Cleanup: Clear Guidance on Categorizing Activities and an Assessment of Contract Cost Effectiveness Needed, was publicly released on September 28.

Budget guidance: DOE-EM’s work falls into two categories: “progress,” or, those activities that directly advance its cleanup mission; and “base operations,” or, activities that do not advance the cleanup mission and include such things as road and facility maintenance and administrative costs. Categorizing its work as either progress or base operations helps the DOE prioritize its funding needs as it formulates a budget.

How specific activities are categorized, however, varies among DOE-EM sites due to a lack of guidance with clear definitions, according to the GAO.

“Improving the consistency and comprehensiveness of EM’s budget guidance, such as by including clear definitions for categories of activities, would help provide a clearer picture of what activities are expected to contribute to cleanup progress and what activities are not. These improvements would allow EM to better weigh options for prioritizing funding and analyzing trends in base operations budgets,” the report states.

Contracts: To ensure that base operations are performed in a cost-effective manner, DOE-EM relies on a contract-based approach that includes guidance on contractor incentives. At several DOE-EM sites, however, some operations are performed under firm-fixed-price contracts, which do not typically include performance incentives, the GOA noted, adding that the DOE has not assessed whether its current approach is achieving the desired results.

“By assessing whether its contract-based approach is improving the cost effectiveness of base operations at its key sites, EM management would know whether changes are needed in their current approach in order to achieve further efficiencies that could allow for acceleration of cleanup progress,” the GAO said in its report.

Recommendations: The GAO report recommends that DOE-EM develop budget guidance that clearly defines base operations and progress activities and assess whether its contract-based approach is improving the cost-effective performance of base operations at major cleanup sites.

In its response to the report, DOE-EM concurred with both recommendations.