GAO-05-764, Nuclear Waste: Better Performance Reporting Needed to Assess DOE's Ability to Achieve the Goals of the Accelerated Cleanup Program


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DOE's Ability to Achieve the Goals of the Accelerated Cleanup Program' 
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Report to the Chairman and Ranking Minority Member, Subcommittee on 
Energy and Water Development, Committee on Appropriations, House of 
Representatives: 

United States Government Accountability Office: 

GAO: 

July 2005: 

Nuclear Waste: 

Better Performance Reporting Needed to Assess DOE's Ability to Achieve 
the Goals of the Accelerated Cleanup Program: 

GAO-05-764: 

GAO Highlights: 

Highlights of GAO-05-764, a report to Chairman Hobson and Ranking 
Minority Member Visclosky, Subcommittee on Energy and Water 
Development, Committee on Appropriations, House of Representatives: 

Why GAO Did This Study: 

In February 2002, following years of rising costs to its nuclear waste 
cleanup program, the Department of Energy (DOE) announced a new 
initiative—the accelerated cleanup plan—and committed to reduce costs 
of cleanup by $50 billion, shorten the cleanup schedule by 35 years, 
and reduce risks to human health and the environment. 

GAO reviewed (1) the progress DOE has made under its accelerated 
cleanup plan, (2) the likelihood DOE will achieve its estimated $50 
billion in cost reductions, and (3) whether DOE’s performance reporting 
allows for a full understanding of progress toward achieving the 
accelerated plan goals.

What GAO Found: 

Since implementing its accelerated cleanup plan, DOE’s progress in 
reducing environmental risks has been mixed. By March 2005, DOE was on 
track or ahead of schedule for many of the 16 cleanup activities it 
measures, including packaging nuclear materials for disposition, 
disposing of low-level waste, and removing buildings. In contrast, DOE 
was behind its accelerated schedule for 3 challenging and costly 
activities--disposing of transuranic and radioactive tank wastes and 
closing tanks that had contained radioactive wastes. These three 
cleanup activities had technical problems, such as developing waste 
separation technology, or regulatory issues, such as determining when a 
storage tank is clean enough to close. Furthermore, DOE has had 
problems with other treatment and disposal activities not reflected in 
its performance measures, such as delays in shipping plutonium from 
sites, resulting in additional costs to secure and store the material.

DOE is not likely to achieve the full $50 billion estimated cost 
reduction, a key goal of the accelerated cleanup plan. First, DOE’s 
method of calculating its $50 billion cost reduction likely overstated 
the potential reductions. Second, DOE based estimated cost reductions 
on assumed improvements that are highly uncertain, such as technology 
development, revised contracting strategies, and regulatory 
requirements. Third, while DOE expected cost reductions to come from 
most of its sites, key sites are already experiencing delays and, by 
the end of fiscal year 2004, had incurred cost increases. Recognizing 
these problems, DOE no longer cites its $50 billion estimate but still 
expects to achieve some cost reductions.

DOE performance reporting does not allow for an adequate understanding 
of its progress toward achieving overall cleanup goals because of 
limitations in how DOE uses its performance measures. First, in its 
performance reporting, DOE does not clearly link accomplishments with 
the incurred costs. Second, DOE does not clearly highlight critical 
activities, such as preparing radioactive tank waste for disposal, that 
have the greatest impact on progress toward meeting overarching cleanup 
goals.

Key Assumptions Contributing to DOE’s $50 Billion Estimated Cost 
Reduction: 

[See PDF for image] 

[End of figure]

What GAO Recommends: 

GAO recommends that DOE (1) improve the linkage between performance 
measures so that there is a clearer, discernable relationship between 
how much cleanup has been accomplished and costs incurred in doing the 
work and (2) identify and highlight in its progress reports to the 
Congress and others those performance measures that are the most 
critical to assessing overall progress toward meeting accelerated 
cleanup plan goals. In commenting on the report, DOE agreed with our 
recommendations.

www.gao.gov/cgi-bin/getrpt?GAO-05-764.

To view the full product, including the scope and methodology, click on 
the link above. For more information, contact Gene Aloise at (202) 512-
3841 or aloiseg@gao.gov.

[End of section] 

Contents: 

Letter: 

Results in Brief: 

Background: 

Progress in Accelerating Cleanup at DOE's Sites Has Been Mixed: 

DOE Is Unlikely to Achieve Its Estimated $50 Billion in Cost 
Reductions: 

DOE's Performance Reporting Does Not Clearly Reflect Progress Made 
toward Achieving the Overarching Goals of the Accelerated Cleanup Plan: 

Conclusions: 

Recommendations for Executive Action: 

Agency Comments and Our Evaluation: 

Appendix I: Scope and Methodology: 

Appendix II: DOE's Estimated Cost Reductions under the Accelerated 
Cleanup Plan: 

Appendix III: Comments from the Department of Energy: 

Appendix IV: GAO Contact and Staff Acknowledgments: 

Tables: 

Table 1: Types, Estimated Quantities, and Planned Treatment and 
Disposal Approach for DOE's Surplus Special Nuclear Materials and Waste 
Materials: 

Table 2: Cleanup Activities for Which DOE Was Ahead of Schedule as of 
March 2005: 

Table 3: Cleanup Activities for Which DOE Was Generally on Schedule as 
of March 2005: 

Table 4: Cleanup Activities for Which DOE Is Behind the Accelerated 
Schedule as of March 2005: 

Table 5: Selected Cleanup Activities Experiencing Problems That Are Not 
Included in DOE's Risk Reduction Measures: 

Table 6: Comparative Features of DOE's Risk Reduction Measures and Cost 
Performance Measures: 

Table 7: Performance Information on Idaho National Laboratory 
Transuranic Waste Shipments as of March 2005: 

Table 8: Accelerated Cleanup Estimates: 

Figures: 

Figure 1: Contributions of Key Assumptions to DOE's Estimated $50 
Billion in Cost Reductions: 

Figure 2: DOE's Expected Cost Reduction by Office: 

United States Government Accountability Office: 

Washington, DC 20548: 

July 29, 2005: 

The Honorable David L. Hobson: 
Chairman: 
The Honorable Peter J. Visclosky: 
Ranking Minority Member: 
Subcommittee on Energy and Water Development: 
Committee on Appropriations: 
House of Representatives: 

The Department of Energy (DOE) is responsible for one of the world's 
largest environmental cleanup programs. Decades of nuclear weapons 
production have left a legacy of chemical, hazardous, and radioactive 
wastes, including high-level and transuranic wastes[Footnote 1] to be 
cleaned up at sites across the United States. In 1989, DOE established 
the Office of Environmental Remediation and Waste Management (now the 
Office of Environmental Management) to address the cleanup of these 
wastes. In carrying out the cleanup program, DOE receives regulatory 
oversight from various federal agencies, including the Environmental 
Protection Agency, the Nuclear Regulatory Commission, and the 
Department of Transportation, and the states where DOE's sites are 
located. 

During the 1990s, we and others criticized DOE's nuclear waste cleanup 
program for being expensive, slow, and lacking in commitment and 
accountability. In response, DOE implemented or attempted to implement 
a number of management initiatives to improve its performance and 
address uncontrolled cost and schedule growth. These initiatives 
included launching a major reform to its contracting practices in 1994, 
establishing an initiative to privatize certain projects in 1995, and 
developing an approach to close sites on a compressed schedule in 1996. 
These initiatives affected how DOE approached the cleanup work, the 
agency's relationship with its contractors, and in some cases, the 
schedule for completing cleanup work. 

Despite these initiatives, DOE's cleanup program continued to 
experience cost and schedule growth. By 2001, DOE's estimates of the 
total cost and timeframes for completing its cleanup program had 
climbed to about $192 billion[Footnote 2] and up to 70 years to 
complete. DOE reported that after having spent over $60 billion 
(current dollars) on nuclear waste cleanup since 1989, little progress 
had been made toward reducing risks to the public and the environment. 
DOE concluded that without significant reform the cleanup program would 
continue to experience uncontrolled cost and schedule growth.[Footnote 
3]

To address this cost and schedule growth, the Assistant Secretary for 
Environmental Management announced a new initiative in February 2002, 
to improve management of the program. This initiative--known as the 
accelerated cleanup plan--had three main goals: rapidly reducing 
environmental risks, decreasing the projected time to clean up sites, 
and reducing the overall cost of the cleanup program. To implement the 
new initiative, DOE took a number of steps including realigning the 
program to focus on rapid reduction of environmental risks; improving 
contract management; and restructuring how DOE managed the cleanup 
program to better support an accelerated, risk-based approach. Other 
changes included implementing procedures that require more discipline 
in controlling costs and cleanup schedules and holding DOE managers 
more accountable for achieving results. 

DOE began implementing the accelerated cleanup plan late in 2002. In a 
March 2003 congressional testimony before a House Appropriations 
subcommittee, the department declared that its new strategy would 
reduce the total cost of the program by an estimated $50 
billion.[Footnote 4] DOE also committed to a strict schedule for timely 
completion of its cleanup activities by 2035, 35 years earlier than 
called for in previous plans. To expedite the acceleration of 
activities under this new plan, DOE said it would need increased 
funding for its cleanup program in the first 3 years of the accelerated 
approach--from fiscal years 2003 through 2005--after which funding 
would begin to decline. DOE estimated that by fiscal year 2008, it will 
have reduced its annual funding requirements by one-third, to 
approximately $4.5 billion per year (constant 2003 dollars), although 
the actual amounts requested in the budget would differ due to 
inflation. 

To improve performance monitoring and reporting on its cleanup 
activities, DOE developed and began reporting on progress toward 
reducing environmental risks primarily through 16 risk reduction 
measures that DOE refers to as "gold chart metrics." These measures 
track progress toward completing cleanup activities, such as the 
quantities of waste disposed of and the number of buildings demolished 
at each DOE site.[Footnote 5] DOE also uses an earned value management 
system to monitor progress of about 60 large cleanup projects. Earned 
value provides DOE managers with information about whether budgeted 
work was performed within cost and schedule parameters. Following 
findings by the Office of Management and Budget (OMB) in a performance 
review during fiscal year 2005 stating that DOE had not developed 
adequate annual cost and schedule performance measures to monitor 
progress towards completing the cleanup program, DOE has been working 
to more fully implement its earned value management system. This work 
includes ensuring all mission-related projects are covered by earned 
value management and monitoring these projects against their long-term 
costs, rather than the contract period, as DOE currently does. 

Given the significant cost of cleaning up DOE's wastes and the 
importance of effectively managing the cleanup effort, you asked us to 
review the progress DOE has made under its accelerated cleanup plan. 
Specifically, our report examines (1) the progress DOE has made in 
accelerating cleanup at its sites, (2) the likelihood that DOE will 
achieve its estimated $50 billion in cost reductions, and (3) whether 
DOE's performance reporting allows for a full understanding of progress 
toward achieving the accelerated cleanup plan goals. 

To determine what progress DOE has achieved under its accelerated 
cleanup plan, we obtained and analyzed DOE's cost, schedule, and earned 
value data for each site and each project. In addition, we determined 
how DOE developed its performance measures. We also obtained cost, 
schedule, and performance information on selected projects from five 
DOE sites chosen on the basis of location, cost, and type of waste--the 
Hanford Site in Washington state; the Savannah River Site in South 
Carolina; the Idaho National Laboratory in Idaho; the Miamisburg 
Closure Project in Ohio, and the West Valley Demonstration Project in 
New York state. To determine the basis of DOE's estimated $50 billion 
in cost reductions, we obtained and evaluated information regarding the 
changes that DOE made to its cleanup program and DOE's plan to 
implement those changes. We also obtained and analyzed DOE's cost 
estimates to determine how, where, and when DOE expects to reduce the 
cost and schedule for the cleanup work. We did not adjust the cost 
estimates to correct for the time value of money or the effect of 
inflation. To evaluate DOE's performance measures, we reviewed reports 
and studies on performance measurement and discussed with DOE officials 
how the department develops and uses its performance measures. We also 
reviewed and analyzed DOE's most recent performance reports and 
compared that information to the actual progress documented at various 
DOE sites. To assess the reliability of the data provided by DOE, we 
obtained and analyzed information about the methods for compiling cost, 
schedule and performance data, and steps taken to ensure its accuracy 
and completeness from the sites we included in our analysis. A more 
detailed description of our scope and methodology is presented in 
appendix I. We performed our work between June 2004 and July 2005 in 
accordance with generally accepted government auditing standards, 
including an assessment of data reliability. 

Results in Brief: 

DOE has made progress in the 2 years since it implemented the 
accelerated cleanup plan, but the most difficult cleanup challenges 
remain. Specifically, by March 2005, 13 of the 16 risk reduction 
measures--including packaging nuclear materials for disposition, 
removing buildings, and disposing of low-level and low-level mixed 
waste--had met, nearly met, or were ahead of the accelerated cleanup 
schedule. In contrast, DOE was behind its accelerated schedule for 3 
challenging and costly activities--disposing of transuranic waste, 
disposing of radioactive tank waste, and closing tanks that had 
contained radioactive wastes. These 3 cleanup activities often had 
technical problems, such as developing waste separation technology, or 
regulatory issues such as determining when a storage tank is clean 
enough to close. Furthermore, DOE has had problems with other treatment 
and disposal activities not reflected in its performance measures, such 
as delays in shipping plutonium from sites, resulting in additional 
costs to continue storing and securing the material until long-term 
storage issues are resolved. 

DOE will likely not fully achieve its projected $50 billion in cost 
reductions, a key goal of the accelerated cleanup plan, for three main 
reasons. First, DOE's method for calculating cost reductions does not 
take into account the time value of money. Considering the time value 
of money, the actual cost reduction from the accelerated plan, if 
implemented as intended, would likely be much lower. For example, in 
2004, we recalculated DOE's estimated cost reduction for the Hanford 
waste treatment plant, which DOE estimated to be $20 billion, not 
considering the time value of money. However, considering the time 
value of money, the estimated cost reduction was reduced by about 40 
percent to about $12 billion. Second, DOE based the estimated cost 
reductions on the assumption that there would be improvements in 
cleanup technology, revisions to contracting strategies, and changes in 
regulatory requirements that govern the level of required cleanup. 
However, evidence is mounting that some of the improvements and 
regulatory changes may not be realized. For example, some of the 
technologies, such as new methods for treating a portion of the tank 
waste at Hanford, are not fully tested and the costs to operate the 
technology are not known. Although ultimately these technologies may be 
effective in treating waste, it is uncertain whether anticipated cost 
reductions will be realized. Additionally, regulators--such as the 
state of New Mexico and the Environmental Protection Agency--have not 
yet approved some of DOE's proposed regulatory revisions, such as its 
plan to send certain types of tank waste now located at the Idaho 
National Laboratory to the Waste Isolation Pilot Plant in New Mexico. 
Third, DOE expected nearly all of the total cost reductions to come 
from accelerating cleanup at three major sites--Hanford in Washington 
state, Savannah River in South Carolina, and the Idaho National 
Laboratory. However, DOE is behind schedule in some of its cleanup 
activities at these sites and cost estimates for completing the work 
are rising. In addition, DOE's planned high-level waste repository at 
Yucca Mountain in Nevada is expected to be delayed at least 2 years, 
which could also increase cleanup costs. Recognizing the uncertainty of 
achieving the full $50 billion cost reduction it committed to achieving 
with its accelerated plan, DOE has recently stopped citing a specific 
estimate of potential cost reductions it believes it can achieve; 
however, the department still believes it will achieve some cost 
reductions with its accelerated strategy. 

DOE's performance reporting does not clearly reflect progress made 
toward the overall cleanup plan goals of a $129 billion total program 
cost and a 2035 completion date, because of two main shortcomings. 

* First, in reporting on its progress, DOE does not establish how 
accomplishments made in addressing wastes, which DOE measures through 
its risk reduction measures, are associated with the costs incurred, 
which DOE measures through its cost performance measures. This makes it 
difficult to clearly understand whether cleanup activities, such as the 
amount of waste disposed of, were accomplished within projected costs. 
For example, as of March 2005, DOE's Idaho National Laboratory was more 
than one year--or more than 1,000 shipments--behind the planned number 
of shipments of transuranic waste to a repository. However, DOE had no 
corresponding indicator to show how this delay has affected estimated 
costs. 

* Second, DOE's performance reporting does not clearly highlight that 
certain performance measures are more important than others in 
indicating whether DOE is on track toward achieving its overall 
performance goals. For example, DOE expects a significant portion of 
its cost reductions to result from improvements in addressing 
radioactive tank wastes and transuranic wastes. Radioactive tank wastes 
alone account for almost $30 billion of DOE's estimated $50 billion 
cost reductions--or 60 percent--under the accelerated plan. Although 
DOE's performance measures show that DOE has fallen behind in both 
transuranic and radioactive tank waste cleanup activities, its 
performance reporting does not highlight the relative significance that 
these critical measures have in providing a full understanding of 
overall progress toward the goals of the accelerated cleanup plan. 
Falling behind in these activities could significantly add to overall 
cleanup costs and, therefore, make it difficult for DOE to achieve its 
$129 billion overall cost target. 

* We are recommending that the Secretary of Energy ensure that DOE's 
performance reporting (1) includes a clearer, discernible relationship 
between cleanup accomplishments and cost and (2) highlights the status 
of performance measures that are the most critical to achieving cost 
and schedule goals. DOE agreed with our recommendations to ensure its 
performance reporting provides a clearer linkage between cleanup 
accomplishments and costs incurred, and highlights performance measures 
most critical to achieving its accelerated goals. 

Background: 

The Department of Energy's Office of Environmental Management is 
responsible for addressing nuclear and hazardous wastes, including some 
of the most dangerously radioactive wastes in the world, and special 
nuclear materials, such as plutonium, resulting from more than 50 years 
of nuclear weapons production. DOE has planned or implemented a variety 
of treatment and disposal approaches, depending on the nature and 
extent of the waste (see table 1). 

Table 1: Types, Estimated Quantities, and Planned Treatment and 
Disposal Approach for DOE's Surplus Special Nuclear Materials and Waste 
Materials: 

Description: Special nuclear materials: Enriched uranium; 
Estimate: 8,428 containers; 
Planned treatment and disposal approach: Blend high quality material 
into reactor fuel. 

Description: Special nuclear materials: Plutonium; Plutonium/uranium 
residues; 
Estimate: 5,850 containers; 107,782 kilograms; 
Planned treatment and disposal approach: Stabilize, package, and 
dispose in either the transuranic or high-level waste repositories. 

Description: Special nuclear materials: Depleted uranium and uranium; 
Estimate: 685,161 metric tons; 
Planned treatment and disposal approach: Convert to a stable form, 
package, and dispose as low-level waste or reuse. 

Description: Radioactive tank waste[A]: Liquid, saltcake, and sludges 
stored in tanks; 
Estimate: 88 million gallons; 
Planned treatment and disposal approach: Separate waste into high-level 
and low-activity portions. Stabilize the high- level portion in a 
glasslike material (vitrification) and package in canisters and then 
dispose in planned high-level waste repository. Treat low-activity 
portion and bury in near surface burial grounds, generally at sites 
where it is currently located. 

Description: Radioactive tank waste[A]: Sodium-bearing tank waste; 
Estimate: 900,000 gallons; 
Planned treatment and disposal approach: Treat, package, and dispose in 
a geologic repository. 

Description: Radioactive tank waste[A]: Vitrified waste; 
Estimate: 18,735 canisters; 
Planned treatment and disposal approach: Dispose of vitrified waste at 
planned high-level waste repository. 

Description: Radioactive tank waste[A]: Solidified low-activity waste; 
Estimate: About 1,000,000 cubic meters[B]; 
Planned treatment and disposal approach: Dispose in near surface burial 
grounds at sites where it is currently located. 

Description: Radioactive tank waste[A]: Dried high-level waste called 
calcine; 
Estimate: 4,400 cubic meters; 
Planned treatment and disposal approach: Treat, if necessary, repackage 
and dispose in planned repository. 

Description: Transuranic waste: Various types of materials contaminated 
with plutonium and other man-made elements and may also contain 
hazardous waste; 
Estimate: 141,892 cubic meters; 
Planned treatment and disposal approach: Treat and repackage, as 
necessary, and dispose in transuranic waste repository. 

Description: Low-level and low-level mixed waste: Various waste 
material including soil, building debris, operational by-products; 
Estimate: 1,190,463 cubic meters; 
Planned treatment and disposal approach: Treat, repackage and bury in 
DOE or commercial near surface disposal facilities. Actual techniques 
to be used depend on the material. 

Description: Hazardous waste: Chemicals, heavy metals and other 
materials; 
Estimate: No comprehensive measure; 
Planned treatment and disposal approach: Recycle, incinerate, or use 
other treatment approach and dispose at DOE or commercial facilities. 

Description: Spent nuclear fuel: Fuel rods stored in pools and dry 
storage casks; 
Estimate: 2,420 metric tons; 
Planned treatment and disposal approach: Prepare fuel, package, and 
dispose in planned high-level waste repository. 

Description: Facilities: Nuclear facilities such as reactors, 
processing facilities and storage buildings; Radioactive facilities 
such as labs, shops, and warehouses; Industrial facilities of many 
different types; 
Estimate: 515 facilities; ; 822 facilities; 3,103 facilities; 
Planned treatment and disposal approach: Decontaminate and decommission 
followed by demolition or reuse. 

Description: Facilities: Underground radioactive waste tanks; 
Estimate: 241 tanks; 
Planned treatment and disposal approach: Empty tanks and fill with 
grout or other material to prevent collapse. 

Description: Waste site: Burial grounds, dried ponds, spills and leaks, 
and many other types of sites; 
Estimate: 10,416 sites; 
Planned treatment and disposal approach: Depending on the nature and 
extent of contamination, approach varies from removal and disposal of 
waste material to release of site for reuse. 

Source: Compiled by GAO from DOE data. 

[A] DOE has traditionally managed all of the wastes in its tanks as 
high-level waste because the waste resulted primarily from the 
reprocessing of spent nuclear fuel and contains significant amounts of 
radioactivity. However, DOE based its approach to treatment and 
disposal of this waste on separating the high-activity portion from the 
low-activity portion, allowing DOE to use less costly treatment 
approaches for the majority of what is now managed as high-level waste. 
In this report, we refer to the tank waste--which DOE manages as high- 
level waste--as "radioactive tank waste."

[B] DOE's lifecycle estimate of solidified low-activity waste is based 
on anticipated separation efficiencies and treatment processes. 

[End of table]

Numerous legal and regulatory requirements govern various aspects of 
DOE's cleanup effort. Many of the cleanup activities are governed by 
the Comprehensive Environmental Response, Compensation, and Liability 
Act of 1980, as amended, and the Resource Conservation and Recovery Act 
of 1976, as amended, through various agreements with regulators. 
Additional laws affecting high-level waste and transuranic wastes are 
the Nuclear Waste Policy Act of 1982, as amended, which establishes the 
program to develop a geologic repository for storing high-level waste 
and spent nuclear fuel, and the Waste Isolation Pilot Plant Land 
Withdrawal Act, which establishes the requirements for operation of a 
repository for transuranic wastes. In addition, under the Federal 
Facility Compliance Act of 1992, DOE has entered into agreements with 
federal and state regulators that establish milestones for 
accomplishing specified cleanup activities and a mechanism to obtain 
approval to change priorities and approaches. For example, under the 
agreement at Hanford, 10 percent of the tank waste is to be processed 
by 2018 and a report on the plans for the remaining 90 percent was due 
to regulators in January 2005, but now has been extended to June 30, 
2006. 

DOE, under the direction of the Secretary of Energy, carries out its 
environmental cleanup program under the leadership of the Assistant 
Secretary for Environmental Management and in consultation with a 
variety of stakeholders. In addition to U.S. Environmental Protection 
Agency and state environmental and health agencies that have regulatory 
authority in states where the sites are located, stakeholders include 
county and local governmental agencies, DOE community advisory groups, 
and Native American tribes. DOE's Office of Environmental Management is 
primarily responsible for cleaning up the wastes, largely through the 
use of contractors overseen by DOE staff. In addition, DOE's Office of 
Civilian Radioactive Waste Management is responsible for the high-level 
waste repository being developed at Yucca Mountain in Nevada, which is 
the repository where DOE plans to dispose of spent nuclear fuel and 
high-level waste. DOE's Office of Legacy Management, created in 2003, 
is responsible for managing DOE's postclosure responsibilities at its 
former nuclear weapons production sites to ensure the continued 
protection of human health and the environment. 

Progress in Accelerating Cleanup at DOE's Sites Has Been Mixed: 

Over 2 years after implementing the accelerated cleanup plan, DOE has 
made progress in a number of areas, but the most difficult cleanup 
challenges remain. By March 2005, DOE was ahead or on its planned 
schedule in 13 of 16 risk reduction activities.[Footnote 6] Activities 
that had met or were ahead of the accelerated schedule included 
packaging nuclear materials for disposition, disposing of low-level and 
low-level mixed waste, and removing buildings. In some cases where DOE 
was meeting or exceeding current risk reduction targets, only a small 
percentage of the overall work had been accomplished. In contrast, DOE 
was behind its schedule for key activities that will have a major 
impact on DOE's overall cleanup goals. These activities involve some of 
the more complex cleanup activities, including disposing of transuranic 
waste, treating high-level liquid waste, and closing tanks that had 
contained radioactive wastes. These activities account for at least 30 
percent of the total expenditures DOE expects on cleanup and more than 
half of the cost reductions it hopes to achieve under the accelerated 
cleanup plan. Finally, DOE has had problems with other treatment and 
disposal activities not reflected in its performance measures, such as 
significant delays in shipping plutonium from sites to final storage 
locations, and delays in design and construction of key facilities. 
Taken together, these results suggest that DOE may already be at risk 
of not achieving its accelerated cleanup goals. 

Progress Has Been Made on Several Cleanup Activities, Such as Disposing 
of Low-Level Waste and Removing Buildings: 

DOE's cleanup was ahead of its planned accelerated schedule for several 
activities, and other activities appeared to be on track. As of March 
2005, DOE was ahead of schedule in 9 risk reduction measures that fell 
into the following cleanup categories[Footnote 7]--(1) tearing down and 
disposing of facilities, (2) packaging and disposing of special nuclear 
materials, (3) cleaning up low-level and low-level mixed waste, and (4) 
completing cleanup of specific locations where releases of 
contamination occurred. For example, in disposing of low-level and low- 
level mixed waste, DOE was more than 181,000 cubic meters--or 35 
percent--ahead of its accelerated target goal. Table 2 shows the 
progress DOE has made in four categories, as of March 2005. 

Table 2: Cleanup Activities for Which DOE Was Ahead of Schedule as of 
March 2005: 

Risk reduction measure (unit measured): Tearing down and disposing of 
facilities: Industrial facilities (number complete); 
Lifecycle total[A]: 3,103; 
Cumulative units planned as of March 2005: 734; 
Cumulative units completed as of March 2005: 985; 
Cumulative units ahead as of March 2005: 251. 

Risk reduction measure (unit measured): Tearing down and disposing of 
facilities: Nuclear facilities (number complete); 
Lifecycle total[A]: 515; 
Cumulative units planned as of March 2005: 27; 
Cumulative units completed as of March 2005: 44; 
Cumulative units ahead as of March 2005: 17. 

Risk reduction measure (unit measured): Tearing down and disposing of 
facilities: Radioactive facilities (number complete); 
Lifecycle total[A]: 822; 
Cumulative units planned as of March 2005: 180; 
Cumulative units completed as of March 2005: 219; 
Cumulative units ahead as of March 2005: 39. 

Risk reduction measure (unit measured): Special nuclear materials: 
Plutonium packaged (number of containers); 
Lifecycle total[A]: 5,850; 
Cumulative units planned as of March 2005: 5,724; 
Cumulative units completed as of March 2005: 6,314; 
Cumulative units ahead as of March 2005: 590. 

Risk reduction measure (unit measured): Enriched uranium packaged 
(number of containers); 
Lifecycle total[A]: 8,428; 
Cumulative units planned as of March 2005: 3,373; 
Cumulative units completed as of March 2005: 4,508; 
Cumulative units ahead as of March 2005: 1,135. 

Risk reduction measure (unit measured): Plutonium/uranium residues 
packaged (kilograms packaged); 
Lifecycle total[A]: 107,782; 
Cumulative units planned as of March 2005: 107,744; 
Cumulative units completed as of March 2005: 107,752; 
Cumulative units ahead as of March 2005: 8[B]. 

Risk reduction measure (unit measured): Depleted uranium and uranium 
packaged (metric tons); 
Lifecycle total[A]: 685,161; 
Cumulative units planned as of March 2005: 4,915; 
Cumulative units completed as of March 2005: 9,293; 
Cumulative units ahead as of March 2005: 4,378[C]. 

Risk reduction measure (unit measured): Low-level/low-level mixed 
waste: Low-level/low-level mixed waste disposed (cubic meters); 
Lifecycle total[A]: 1,190,463; 
Cumulative units planned as of March 2005: 524,981; 
Cumulative units completed as of March 2005: 706,587; 
Cumulative units ahead as of March 2005: 181,606. 

Risk reduction measure (unit measured): Areas of Contamination: 
Remediation complete (number of contamination areas[D]); 
Lifecycle total[A]: 10,416; 
Cumulative units planned as of March 2005: 5,425; 
Cumulative units completed as of March 2005: 5,605; 
Cumulative units ahead as of March 2005: 180. 

Source: Compiled by GAO from DOE data. 

[A] DOE's lifecycle totals are based on estimates of the total amount 
of material required to be cleaned up. In 2003, these estimates were 
placed under DOE's configuration control system--that is, the estimates 
cannot be changed unless approved by a DOE Environmental Management 
review board. 

[B] This measure was slightly ahead of schedule and nearly complete. 

[C] As of March 2005, DOE had packaged less than 2 percent of the 
lifecycle inventory for depleted uranium. A rapid increase in packaging 
is planned in 2009. 

[D] Contaminated areas include burial grounds, dried ponds, and spills. 

[End of table]

These risk reduction measures show that DOE has made progress at an 
accelerated pace for a variety of cleanup activities that often require 
more readily available technology or standard treatment processes. For 
example, facility disposal primarily involves decontaminating and 
tearing down a building, and disposing of the rubble at established 
disposal sites. In addition, DOE's measures show that it had nearly 
completed its activity to package plutonium and uranium residues, a 
highly dangerous activity due to the potential for a nuclear accident 
or worker exposure. 

While DOE has made progress in several areas, a significant part of the 
progress was due to accelerated activities at relatively few sites and 
reflects completion of only a small percentage of the overall work to 
be performed. For example, DOE's Rocky Flats site alone accounted for 
more than 180,000 of the total 181,600 cubic meters of low-level and 
low-level mixed waste that DOE disposed of ahead of schedule. 
Similarly, more than half of the progress made ahead of schedule in 
remediating potential contamination areas was due to work performed at 
Rocky Flats. And although DOE made progress on many of its risk 
reduction measures, some individual sites did not make progress at an 
accelerated pace. For example, although DOE was ahead of schedule in 
disposing of low-level and low-level mixed waste, both the Oak Ridge 
site and the Lawrence Livermore National Laboratory were slightly 
behind their site targets on this measure. In addition, DOE's progress 
in a few areas reflected achieving only a small portion of the overall 
work to be completed. The most extreme example shows that DOE was ahead 
in packaging depleted uranium; however, this reflects about 1 percent 
of the nearly 700,000 metric tons to be packaged. In tearing down and 
disposing of nuclear facilities, DOE had completed about 9 percent of 
the 515 facilities it has to clean up. 

In addition to areas in which DOE was ahead of schedule, cleanup 
progress was on track or nearly on track for four risk reduction 
measures in the following cleanup categories: (1) packaging high-level 
waste for disposal, (2) cleaning up special nuclear materials, (3) 
packaging spent nuclear fuel for disposal, and (4) eliminating 
geographic sites (see table 3). These cleanup activities involve 
difficult and hazardous work. 

Table 3: Cleanup Activities for Which DOE Was Generally on Schedule as 
of March 2005: 

Risk reduction measure (unit measured): Radioactive tank waste: High-
level waste packaged for disposition (number of containers)[B]; 
Lifecycle total[A]: 18,735; 
Cumulative units planned as of March 2005: 2,118; 
Cumulative units completed as of March 2005: 2,116; 
Status of cumulative units as of March 2005: -2. 

Risk reduction measure (unit measured): Special nuclear materials: 
Material access areas[C] eliminated (areas eliminated); 
Lifecycle total[A]: 14; 
Cumulative units planned as of March 2005: 7; 
Cumulative units completed as of March 2005: 8; 
Status of cumulative units as of March 2005: 1. 

Risk reduction measure (unit measured): Spent nuclear fuel: Spent 
nuclear fuel packaged for disposition (metric tons of heavy metal); 
Lifecycle total[A]: 2,420; 
Cumulative units planned as of March 2005: 2,129; 
Cumulative units completed as of March 2005: 2,125; 
Status of cumulative units as of March 2005: -4. 

Risk reduction measure (unit measured): Site closures: Geographic sites 
eliminated (entire site complete); 
Lifecycle total[A]: 114; 
Cumulative units planned as of March 2005: 76; 
Cumulative units completed as of March 2005: 75; 
Status of cumulative units as of March 2005: -1[D]. 

Source: Compiled by GAO from DOE data. 

[A] DOE's lifecycle totals are based on estimates of the total amount 
of material required to be cleaned up. In 2003, these estimates were 
placed under DOE's configuration control system--that is, the estimates 
cannot be changed unless approved by a DOE Environmental Management 
review board. 

[B] Work accomplished under this cleanup activity reflects the 
processing, vitrifying, and packaging of high-level waste sludge 
primarily at the Savannah River Site. 

[C] A material access area is a secure area that offers protection and 
control for a variety of special nuclear materials. 

[D] DOE was behind in closing the Salmon, Mississippi, site scheduled 
for 2003. Completion is expected in fiscal year 2005. 

[End of table]

Making progress on cleanup activities is an important step in reducing 
environmental risks and annual operating costs, and in demonstrating 
results under the accelerated cleanup plan. DOE officials told us that 
achieving cleanup results for these waste activities helps reduce 
future mortgage costs such as surveillance and maintenance of unneeded 
facilities, avoids potentially higher remediation costs in the future, 
and demonstrates actual cleanup progress. To achieve such progress in 
reaching its risk reduction goals, DOE took a number of steps including 
changing the sequence of some cleanup activities to complete tasks 
earlier than originally scheduled and reducing work scope where 
warranted for other activities. Site officials credited the 
achievements to remediating targeted areas such as contaminated burial 
grounds, waste sites, facilities, and plutonium production reactors 
along the Columbia River at Hanford and a variety of obsolete buildings 
at Idaho and Savannah River. According to DOE officials at these sites, 
many of these areas were scheduled for decommissioning and disposal in 
the future, but because they were no longer needed, they were disposed 
of earlier than originally planned. In addition, making progress in 
certain areas can free up funding for use on other, more complex 
projects. For example, at DOE's Idaho National Laboratory, officials 
told us that completing disposal of most of its low-level and low-level 
mixed waste 2 years ahead of schedule has allowed them to apply the 
funds originally planned for managing this waste to other cleanup 
activities at the site. 

Problems Have Occurred on Major Activities, Including Disposing of 
Transuranic Waste and Radioactive Tank Waste and Shipping Plutonium to 
Storage Locations: 

In contrast to progress on cleanup activities for which DOE is ahead of 
or on schedule, DOE is having difficulty with other cleanup work that 
could have a major impact on its accelerated cleanup goals. As of March 
2005, DOE was falling behind in three risk reduction measures under two 
cleanup categories that account for a significant portion of the 
potential cost reductions DOE was expecting--radioactive tank waste and 
transuranic waste. See table 4 for a list of cleanup activities for the 
two waste types on which DOE has fallen behind since implementing the 
accelerated cleanup plan. 

Table 4: Cleanup Activities for Which DOE Is Behind the Accelerated 
Schedule as of March 2005: 

Risk reduction measure (unit measured): Radioactive tank waste: Liquid 
waste eliminated (gallons)[B]; 
Lifecycle total[A]: Radioactive tank waste: 88,000,000; 
Cumulative units planned as of March 2005: 2,960,000; 
Cumulative units completed as of March 2005: 0; 
Cumulative units behind as of March 2005: -2,960,000. 

Risk reduction measure (unit measured): Radioactive tank waste: Liquid 
waste tanks closed (number of tanks); 
Lifecycle total[A]: Radioactive tank waste: 241; 
Cumulative units planned as of March 2005: 13; 
Cumulative units completed as of March 2005: 2; 
Cumulative units behind as of March 2005: -11. 

Risk reduction measure (unit measured): Transuranic waste. 

Risk reduction measure (unit measured): Transuranic waste disposed 
(number of cubic meters); 
Lifecycle total[A]: Radioactive tank waste: 141,892; 
Cumulative units planned as of March 2005: 30,926; 
Cumulative units completed as of March 2005: 24,461; 
Cumulative units behind as of March 2005: -6,465. 

Source: Compiled by GAO from DOE data. 

[A] DOE's lifecycle totals are based on estimates of the total amount 
of material required to be cleaned up. In 2003, these estimates were 
placed under DOE's configuration control system--that is, the estimates 
cannot be changed unless approved by a DOE Environmental Management 
review board. 

[B] While this cleanup activity is active at DOE's Savannah River Site, 
no liquid waste has yet been eliminated, primarily because technology 
has not been fully developed and regulatory issues have not been fully 
resolved. 

[End of table]

DOE efforts to treat and dispose of radioactive waste from its tanks 
are primarily at three DOE sites--Hanford, Idaho, and Savannah 
River.[Footnote 8] However, because the Hanford and Idaho sites have 
not yet begun to treat their liquid radioactive tank waste, the measure 
for eliminating liquid waste from underground tanks applies to the 
Savannah River Site. Although Savannah River has been processing 
radioactive tank waste sludge since 1996, it was behind in processing 
and eliminating from its tanks nearly 3 million gallons of liquid 
primarily because the site was still developing waste separation 
technology and lacked operational treatment facilities for disposing of 
liquid tank waste.[Footnote 9] While all three of DOE's sites had 
performance goals for closing radioactive waste tanks through March 
2005, no tanks have been closed since 1997.[Footnote 10] Plans to close 
tanks at the three sites have been delayed because DOE continues to 
work with regulators to reach agreement on closure requirements and due 
to a legal challenge to DOE's tank closure strategy. DOE's authority to 
proceed with its tank closure plans at its Savannah River Site and the 
Idaho National Laboratory was resolved by federal legislation enacted 
in 2004; however, the law excluded the Hanford Site.[Footnote 11] Even 
so, Savannah River and the Idaho National Laboratory are still behind 
schedule in preparing waste removal facilities and obtaining regulatory 
approval to close the tanks. Although DOE is preparing 12 of its 241 
radioactive waste tanks for closure, no tanks have actually been closed 
since the accelerated cleanup plan was implemented in 2003. 

Transuranic waste is present at several DOE sites, but lagging 
performance is due primarily to the Idaho National Laboratory. 
Disposing of transuranic waste involves specialized characterization 
and treatment, packaging, and shipping in specially designed containers 
to a repository in New Mexico. As of March 2005, DOE had fallen behind 
its accelerated schedule by about 6,500 cubic meters, achieving about 
80 percent of the goal. Delays in Idaho's transuranic waste disposal 
were primarily due to contractor performance problems in preparing the 
waste for shipment and difficulties in implementing a specially 
designed treatment technology. 

The activities and projects for which DOE was falling behind the 
accelerated schedule involve technically complex and costly cleanup 
activities, and usually require specialized treatment technologies. 
Radioactive tank waste, for example, involves treating highly 
radioactive waste generated from the reprocessing of reactor fuel that 
contains a mix of hazardous and radioactive constituents, and requires 
relatively complex treatment technologies such as waste separation and 
vitrification. Cleaning up radioactive tank waste accounts for about 30 
percent--or almost $40 billion--of DOE's estimated total cleanup costs. 
To date, key facilities DOE needs to use to treat and dispose of this 
waste are still being designed and built, and waste treatment 
technologies continue to be developed and tested. Similarly, some of 
the greatest risks, cleanup costs, and technical challenges involve the 
disposal of transuranic waste. This waste often requires an extensive 
retrieval, characterization, and treatment process as well as 
repackaging in containers before it can be shipped to and disposed of 
in the designated geologic repository for transuranic waste in New 
Mexico. Transuranic waste disposal is behind schedule and DOE will have 
difficulties catching up if this activity continues to fall behind. 

In addition to the cleanup activities that DOE measures, other cleanup 
activities not included in DOE's risk reduction measures are 
experiencing problems further impacting overall cleanup progress. 
Although no comprehensive list of these cleanup activities was 
available from DOE, we found several examples, some of which are listed 
below, that involve constructing facilities critical to DOE's cleanup 
mission and relocating certain wastes or nuclear materials (see table 
5). 

Table 5: Selected Cleanup Activities Experiencing Problems That Are Not 
Included in DOE's Risk Reduction Measures: 

Sites: Hanford; 
Project or activity: Shipment of plutonium to offsite location; 
Problem or uncertainty: Planned shipping of plutonium to designated 
site has been deferred while long-term storage issues are resolved; 
Potential impact on future progress: Increased costs for extended 
onsite storage and security requirements. 

Sites: Hanford; 
Project or activity: Construction of waste treatment plant; 
Problem or uncertainty: Delays primarily due to contractor performance 
problems and design changes to comply with seismic requirements; 
Potential impact on future progress: Increased construction costs, 
extension of facility startup beyond 2011. 

Sites: Idaho National Laboratory; 
Project or activity: Storage of spent nuclear fuel; 
Problem or uncertainty: Construction of storage facility is behind 
schedule; 
Potential impact on future progress: At least a 3-year schedule delay 
in facility construction and operation and potential cost increases. 
Delays may be offset by delay in opening the planned disposal 
repository. 

Sites: Miamisburg; 
Project or activity: Cleanup of landfill; 
Problem or uncertainty: Disagreement with local community over further 
cleanup of landfill; 
Potential impact on future progress: Increased cleanup costs. 

Sites: West Valley; 
Project or activity: Decommissioning of contaminated process facility; 
Problem or uncertainty: Dispute over who is responsible; 
Potential impact on future progress: Increased costs and extension of 
schedule beyond 2012. 

Source: Compiled by GAO from DOE data. 

[End of table]

These cleanup activities can involve significant technical and 
operational problems. Even though DOE does not track the status of 
these problems in its risk reduction measures, DOE officials are aware 
of these problems and are working to resolve them. However, because 
these problems remain unresolved and their potential impact on the 
accelerated cleanup plan is uncertain, DOE may already be at risk of 
not achieving the kind of progress it predicted under its accelerated 
cleanup plan. For example, the Hanford Site must construct key 
facilities and test complex technologies before it can treat 55 million 
gallons of radioactive tank waste. Recently, work on this project has 
been delayed due to engineering and contractor performance problems, 
leading DOE to reevaluate its ability to complete the project under 
current cost and schedule constraints. DOE expects to revise project 
cost and schedule goals in fiscal year 2006. Despite these problems, 
DOE does not have a risk reduction measure that shows the progress of 
these activities or their potential impact on overall cleanup progress. 
Consequently, DOE will not be able to quantify progress in treating 
radioactive tank waste at Hanford until facilities are operational--now 
planned for 2011, or later. Similarly, DOE's strategy under the 
accelerated cleanup plan to consolidate Hanford's plutonium offsite has 
been deferred while long-term storage issues are being resolved. DOE 
Hanford officials estimate that if the plutonium remains on-site, the 
additional costs to continue storing and securing the material may 
amount to more than $2 billion. Despite this problem, DOE's plutonium 
risk reduction measure, which focuses on completing stabilization and 
packaging of the material, shows that this cleanup activity was ahead 
of schedule. 

When considered together, the results of DOE's risk reduction measures 
for two main types of cleanup activities--radioactive tank waste and 
transuranic waste, which are behind schedule and require additional 
cleanup activities--suggest that DOE may already be at risk of not 
achieving its overall risk reduction goals. Each of these problems 
represents a significant obstacle to DOE successfully completing 
cleanup activities under its accelerated plan. Success hinges on DOE's 
ability to continue reducing risks by making cleanup progress and 
keeping costs and schedules within the constraints of DOE's plan. 

DOE Is Unlikely to Achieve Its Estimated $50 Billion in Cost 
Reductions: 

DOE's accelerated plan is unlikely to achieve the $50 billion cost 
reduction goal for three main reasons. First, DOE's method for 
calculating cost reductions has limitations that raise questions about 
its reliability. The actual cost reduction from the accelerated cleanup 
plan, if implemented as intended, would likely be much lower. Second, 
the accelerated plan is based on a number of key assumptions about 
improvements to the cleanup approach--such as shortened schedules and 
technology improvements--that may not occur as planned. Third, the 
three sites that account for most of the cost reduction are already 
facing challenges and have either increased their cost estimates or 
plan to increase their funding requests, raising doubts about DOE's 
ability to achieve its full expected cost reductions. While DOE 
believes the accelerated cleanup plan will reduce costs, the actual 
amount of those cost reductions is uncertain. 

DOE Estimates Overstated Potential Cost Reductions: 

DOE calculated its estimated $50 billion in cost reductions by 
comparing its fiscal year 2001 cost estimate for the program--the last 
cost estimate before DOE implemented its accelerated strategy--with its 
fiscal year 2003 cost estimate for the program--the first complete cost 
estimate under the new accelerated strategy.[Footnote 12] DOE's 2001 
cost estimate for the program was $192 billion, reflecting its prior 
approach to cleaning up its radioactive and hazardous wastes by 
2070.[Footnote 13] The 2001 estimate represented forecasts generated by 
DOE's field staff at each of its sites and for each of its activities. 
Aggregating these site-developed estimates, DOE arrived at its 2001 
cost estimate for the program. In contrast, to develop its 2003 
estimate--reflecting an accelerated approach--DOE provided several of 
the sites with target costs that the sites were to work towards 
meeting.[Footnote 14] These target costs were based on assumptions from 
the headquarters officials about how and when the work should be 
completed. Under this new strategy, DOE's 2003 estimate for completing 
the cleanup work was $142 billion. DOE subtracted the 2003 estimate for 
the new strategy ($142 billion) from the 2001 estimate under the 
original strategy ($192 billion) to arrive at its $50 billion cost 
reduction estimate.[Footnote 15]

However, DOE's estimated $50 billion in cost reductions from 
accelerating cleanup at its sites may not be fully reliable for several 
reasons: 

* Pre-acceleration baseline cost estimate may be unreliable. In a 
February 2002 review of the cleanup program, DOE specifically 
acknowledged that its cost estimate of the program did not provide a 
reliable estimate of project costs. DOE officials explained that the 
site-level estimates of cleanup work were based on calculations that 
were highly uncertain beyond the life of the contracts. We and others 
have previously raised concerns that DOE's cleanup cost estimates may 
not be fully reliable. In our prior work, we noted that in preparing 
baseline cost estimates, DOE lacked a standard methodology for sites to 
use.[Footnote 16] Further, in the past, DOE's Office of Inspector 
General and the National Research Council have raised similar concerns 
about DOE's estimates being incomplete and unreliable.[Footnote 17]

* Estimates did not include contingency costs. Because of the high 
uncertainty surrounding the cleanup work, DOE computes additional 
uncertainty costs--called contingency estimates[Footnote 18]--which are 
added to the overall cleanup estimates in its annual financial 
statements. These costs are intended to cover any underestimated or 
unforeseen cleanup work. In 2001, DOE estimated that because of 
uncertainty related to the cleanup, it would add a contingency estimate 
equal to an additional 17 percent of its cleanup cost estimate. In 
contrast, following implementation of the accelerated plan, DOE 
estimated in 2003 that increased uncertainty called for nearly doubling 
the contingency estimate to 29 percent of the cleanup cost estimate. 
However, when calculating its expected cost reduction under the 
accelerated plan, DOE did not include either of these contingency 
estimates in its comparison of the two estimates. Doing so would likely 
have lowered the estimated cost reductions to below $50 billion. 

* No present value analysis was performed. DOE's estimate of potential 
cost reductions did not consider the time value of money. As we noted 
in our previous report,[Footnote 19] according to standard economic 
analysis and guidance developed by OMB,[Footnote 20] cost-comparison 
analyses should be based on lifecycle costs of competing alternatives 
with future costs discounted to present value; that is, adjusted both 
for inflation and the time value of money.[Footnote 21] According to 
OMB's cost-estimating guidance, DOE should have first converted the 
annual expected costs of cleanup for both its 2001 and its 2003 
estimates to their present value in 2003, and then compared the two 
present-value costs. While DOE's comparison of its estimates is based 
on values that are expressed in constant 2003 dollars (to account for 
inflation), DOE did not adjust its figures to account for the time 
value of future costs.[Footnote 22] Had DOE compared present value 
estimates for 2001 and 2003, the resulting cost reduction would likely 
have been much lower. For example, when we adjusted DOE's estimated $20 
billion cost reduction for the Hanford waste treatment project to 
consider the time value of money, the potential cost reduction 
decreased by about 40 percent--to about $12 billion. 

Cost Reductions Were Based on Assumed Performance Improvements That May 
Not Occur: 

As part of its plan to reduce the expected cost of the cleanup and 
eliminate risks more quickly, DOE made several assumptions about ways 
to improve the cleanup work. These assumptions included (1) developing 
new technologies, such as a technology to allow more efficient 
vitrification of some wastes; (2) implementing new acquisition 
strategies that encourage and reward contractor efficiencies, such as 
performance-based contracts; (3) revising site cleanup agreements to 
simplify treatment and disposal requirements, such as reclassifying 
some wastes allowing for disposal on site rather than remotely; and (4) 
completing work sooner than planned thereby eliminating out-year costs. 

Assumed improvements in DOE's cleanup approach resulted in DOE's 
estimated $50 billion in cost reductions (see figure 1). 

Figure 1: Contributions of Key Assumptions to DOE's Estimated $50 
Billion in Cost Reductions: 

[See PDF for image]

[A] When DOE collected its cost reduction data from each site, some of 
the improvements related to finishing cleanup work sooner were also 
closely tied to the other assumed improvements resulting in some 
overlap among the categories. 

[End of figure]

The assumptions enabled DOE to develop revised cleanup cost estimates 
at most sites that reflected cost reductions (see figure 2). 

Figure 2: DOE's Expected Cost Reduction by Office: 

[See PDF for image]

[A] Includes both the Office of River Protection and the Richland 
Operations office. 

[B] DOE did not estimate large cost reductions from Rocky Flats because 
that site had already implemented many of the accelerated strategies 
and reduced its cost estimate before 2001. 

[C] Includes Headquarters and Program Direction costs. 

[D] Because of work transfers within the Office of Environmental 
Management, some costs changed in 2003 at sites that closed before 
2003. 

[End of figure]

Although these assumed improvements may have the potential to reduce 
cleanup costs, many of them are still uncertain and may not occur. For 
example,

* Technology improvements. DOE assumed that significant cost reductions 
would result from improved technologies that would allow treatment and 
disposal of waste faster and at lower costs. Nearly all of the 
estimated cost reduction pertains to improvements in the technologies 
at the Idaho National Laboratory and Hanford sites. For example, DOE 
expected a $4.7 billion cost reduction at the Idaho National Laboratory 
by using a technology for separating a portion of the tank waste, but 
that technology has still not been successfully tested and implemented 
on DOE tank waste. Similarly, at the Hanford site, DOE is testing a 
technology that officials estimated would speed up the stabilization of 
some low-activity wastes reducing costs by an estimated $8.9 billion. 
However, the technology has not been fully implemented or tested on 
Hanford's unique waste, and costs of operating the new technology are 
not yet known, so the extent of cost reductions DOE assumed could be 
incorrect. For example, an official for the contractor developing the 
pilot plant to test this technology said the project is already 
projecting cost increases and is currently estimated to begin operating 
about 6 months late. 

* Contract reform. DOE estimated that revised contracting strategies 
would also result in significant cost reductions. However, at two of 
DOE's largest sites--Savannah River and Hanford--DOE will not award 
some major new contracts until 2006. Until then, the final price of 
DOE's new contracts and any potential cost reductions associated with 
them are uncertain. For example, DOE has assumed it will reduce overall 
costs by more than 20 percent under its new Savannah River Site 
contract. However, the details and final cost of the contract will not 
be finalized until the contract is awarded. External auditors 
acknowledged this uncertainty at Hanford in their assessment of DOE's 
fiscal year 2004 environmental liabilities estimate, noting that it was 
"not appropriate" to assume cost reductions from future contracts since 
those reductions are "neither probable nor susceptible of reasonable 
estimation."

* Revisions to cleanup agreements. DOE estimated additional cost 
reductions would result from revising site-specific waste cleanup 
agreements with federal and state regulators. However, regulators have 
not agreed to or are resisting revisions to agreements that accounted 
for most (at least 75 percent) of these expected cost reductions. For 
example, DOE expected to be able to determine that some radioactive 
tank waste is not high-level waste but transuranic waste, thereby 
allowing DOE to ship the treated waste to the Waste Isolation Pilot 
Plant for permanent disposal and reducing costs by $1.5 billion. 
However, in late 2004, the head of New Mexico's Environment Department-
-the state regulator for the repository--said the state would refuse to 
accept DOE's tank waste for disposal at the repository because New 
Mexico considers that waste to be high-level, not transuranic, waste. 
In addition, because of the uncertainty about the disposal path for 
this radioactive tank waste, the state of Idaho--which has a regulatory 
agreement with DOE to treat and dispose of the waste out of the state-
-prefers that DOE apply more extensive high-level waste treatment 
technologies. 

* Work completed sooner. DOE also expected cost reductions resulting 
from completing work sooner through improvements that, in many cases, 
also depend on the assumptions discussed above. Because of the 
uncertainty surrounding assumed improvements in its cleanup operations, 
DOE's anticipated cost reductions from completing work sooner are also 
in jeopardy. For example, DOE estimated approximately $2.8 billion in 
cost reductions at its Savannah River Site from accelerating the 
cleanup of radioactive tank waste. However, that reduction depends on 
implementing a new waste treatment technology that has not yet been 
fully tested outside a laboratory. As a result, the uncertainties 
surrounding technological improvements raise doubts about DOE's ability 
to accelerate its schedule. In addition, several of the projects that 
DOE expects to complete in less time are already experiencing problems. 
For example, DOE estimated that an approximately $2.8 billion cost 
reduction would result, in part, from revising its schedule for 
shipping transuranic waste to the repository in New Mexico. However, as 
we noted above, transuranic waste packaging and shipping is already 
behind schedule. 

Nearly All of the Cost Reductions Were to Occur at Three Sites Where 
DOE Is Having Significant Technical, Regulatory, or Management 
Challenges: 

DOE expected cost reductions to occur at nearly all of its cleanup 
sites, but most of the total estimated cost reduction was expected from 
3 sites that account for the largest portion of DOE's overall cleanup 
costs--Hanford, Savannah River, and Idaho National Laboratory. However, 
these sites are already facing challenges to their cleanup efforts 
which may jeopardize DOE's ability to achieve its estimated $50 billion 
cost reduction. Although it is impossible to precisely predict the 
impact that these challenges will have on DOE's overall cleanup costs, 
any cost increases at these sites could offset cost reductions at other 
sites and lower the potential for overall cost reductions from the 
accelerated plan. 

The types of challenges that could increase cleanup costs at these 
three DOE sites include the following: 

* Delays in disposing of highly radioactive wastes. In early 2005, DOE 
reported that a slip in the scheduled opening of DOE's planned 
repository at Yucca Mountain, Nevada would delay shipment of waste by 
at least 2 years--and possibly for as long as 7 years--due to technical 
and regulatory issues. As a result, sites now storing high-level waste 
and spent nuclear fuel have been reevaluating their waste disposal 
plans and associated cost and schedule estimates. The sites potentially 
affected include Hanford, Idaho National Laboratory, Savannah River, 
and West Valley. Most sites expect costs to increase as disposal 
schedules slip. In its fiscal year 2006 budget request, DOE estimated 
that a five year delay in opening the Yucca Mountain repository could 
increase costs by as much as $720 million at its three largest sites. 
This includes building additional storage buildings and added operating 
costs. 

* Legal obstacles preventing DOE from implementing aspects of its 
cleanup approach. DOE faces challenges to its planned treatment 
strategy at the Hanford Site that could potentially increase costs. A 
2002 lawsuit challenged DOE's plans to separate and determine that a 
portion of its waste could be treated and disposed of as other than 
high-level waste, and to DOE's plans to close tanks leaving some 
radioactive residual in the tanks. In October 2004, a federal appeals 
court overturned a district court ruling against DOE and held that it 
was premature to rule on the matter until DOE implemented its 
strategy.[Footnote 23] Federal legislation passed in October 2004 
provided authority for DOE to carry out its acceleration completion 
strategy at its Savannah River Site and Idaho National Laboratory. 
However, the law excluded the Hanford Site.[Footnote 24] If similar 
authority is not provided for the Hanford Site, costs at the site could 
increase significantly--up to $67 billion, according to DOE's estimate. 
Similarly, uncertainty surrounds Hanford's ability to accept waste from 
other DOE sites as the result of two ongoing lawsuits: one involving a 
challenge by the state of Washington to DOE's plan to ship low-level, 
low-level mixed, and transuranic waste into the state,[Footnote 25] and 
one concerning a recent Washington state citizens' initiative that 
could prohibit Hanford from accepting additional waste until existing 
waste is cleaned up.[Footnote 26] Although DOE believes it will 
ultimately prevail in these lawsuits, some cleanup activities at the 
other sites may face delays and increased storage costs until the issue 
is resolved. 

* Other pressures increasing costs at key sites. By the end of fiscal 
year 2004, the total cost estimate of the cleanup work at two of DOE's 
largest sites had already increased above cost targets established in 
2003. At the Savannah River Site and Idaho National Laboratory overall 
cleanup estimates in 2004 were over $2.0 billion higher than in 2003. 
Similarly, officials at DOE's Hanford Site indicated in recent public 
meetings that they are requesting cleanup funding above previously 
established funding targets for fiscal year 2007, which, if approved, 
will also add to the plan's total cost. According to the site 
officials, the additional funds are being requested primarily to 
address higher than expected waste management and treatment costs. 

Because of the limitations and uncertainties discussed above, DOE's $50 
billion cost reduction goal is unlikely to occur. Recognizing that 
achieving the full $50 billion in cost reductions may be in jeopardy, 
DOE officials recently stopped citing any specific estimate in 
connection with the accelerated plan. However, DOE continues to believe 
it will achieve some cost reductions with its accelerated strategy. 

DOE's Performance Reporting Does Not Clearly Reflect Progress Made 
toward Achieving the Overarching Goals of the Accelerated Cleanup Plan: 

DOE's performance reporting does not present a clear understanding of 
progress toward meeting the $129 billion cost target and 2035 
completion date of the accelerated cleanup plan. While DOE performance 
measures, as discussed earlier in this report, provide useful 
information about the current status of cleanup activities, there are 
two main shortcomings in the way DOE uses these measures to report its 
progress toward meeting the overarching goals of the accelerated plan. 
First, in reporting on its performance, DOE does not clearly relate 
cleanup accomplishments with their associated costs. Second, DOE 
reports its performance in a way that does not highlight key cleanup 
activities or events that have significant implications for achieving 
overall cleanup goals. These shortcomings make it difficult for the 
Congress and the public to fully understand how likely DOE will be able 
to achieve its accelerated cleanup cost target and completion date. 

Performance Reporting Practices Make It Difficult to Clearly Understand 
the Relationship Between Cleanup Progress and Cost Performance: 

We and others have emphasized the importance of ensuring that reporting 
on program performance allows a clear understanding of how well a 
program is meeting goals; that is, linking performance goals with 
program costs. In a February 2005 study, we noted that federal 
accountability laws--the Government Performance and Results Act of 1993 
(GPRA) and the Chief Financial Officers Act of 1990--emphasize the 
importance of linking program performance information with financial 
information as a key feature of sound management and an important 
element in presenting to the public a useful and informative 
perspective on federal spending.[Footnote 27] Additionally, OMB 
indicated to federal agencies that annual performance budgets should 
clearly link performance goals with costs for achieving those goals, 
both long-term and annual performance goals.[Footnote 28]

DOE's performance reporting does not provide for a clear understanding 
of how well the cleanup program is performing. In reporting on its 
progress, DOE does not establish how accomplishments made in addressing 
wastes--which DOE measures through its risk reduction measures--are 
associated with the costs incurred--which DOE measures through its cost 
performance measures. Rather, DOE reports separately on the waste 
treatment and disposal goals it has achieved using one measure and 
reports on whether cleanup activities are being performed within cost 
parameters using another measure. These separate measures are organized 
around different categories and have different units of measure, making 
it difficult to link the information the two measures provide (see 
table 6). 

Table 6: Comparative Features of DOE's Risk Reduction Measures and Cost 
Performance Measures: 

Comparative features: Organization of measure; 
Risk reduction measures: Organized around 16 specific categories or 
outcomes; 
Cost performance measures: Organized around 7 project categories. 

Comparative features: Information included; 
Risk reduction measures: May have more than one measure for the same 
waste type, for example, radioactive tank waste has 3 risk reduction 
outcomes; 
Cost performance measures: May include costs associated with more than 
one cleanup activity, such as packaging transuranic waste and disposing 
of low-level waste. 

Comparative features: Time period measured; 
Risk reduction measures: Measures progress against the lifecycle plan; 
Cost performance measures: Measures against costs in contract period. 

Comparative features: Type of measurement; 
Risk reduction measures: Scored as a positive or negative variance, 
indicating number of units ahead/behind the target; 
Cost performance measures: An overall score indexed to 1.0, where 
greater than 1 is on or ahead of schedule and below 1 is behind 
schedule. 

Comparative features: Scope limitations; 
Risk reduction measures: Does not cover all activities associated with 
a waste group, for example radioactive tank waste measures do not 
include shipping activities; 
Cost performance measures: Does not cover all costs related to specific 
waste activities, for example, does not cover security costs. 

Source: GAO analysis. 

[End of table]

The difficulty of understanding the relationship between cleanup 
accomplishments and cost performance can be illustrated by comparing 
the performance information available on transuranic waste. DOE's risk 
reduction measure provides useful information about how much 
transuranic waste was processed and disposed of, but DOE does not 
separately report cost information related to transuranic waste 
accomplishments. Instead, DOE includes costs associated with 
transuranic waste activities as part of a larger project category 
titled "solid waste stabilization and disposition." Therefore, DOE and 
others generally do not have a complete picture of performance for this 
activity, such as the impact on cost and schedule of falling behind in 
processing and disposing of the waste. For example, as of March 2005, 
DOE's Idaho National Laboratory was more than one year--or more than 
1,000 shipments--behind its planned number of shipments of transuranic 
waste to the federal repository. However, DOE reports no corresponding 
cost performance measure to indicate the impact of this delay on cost 
and schedule (see table 7). During the same time period, Idaho's solid 
waste stabilization and disposition cost performance score indicated 
the project category was "green," or remaining within cost and schedule 
goals. However, because of the delays in transuranic waste shipments, 
DOE is significantly behind schedule, has recently ended the contract, 
and is now in the process of determining the cost impact of these 
delays. 

Table 7: Performance Information on Idaho National Laboratory 
Transuranic Waste Shipments as of March 2005: 

Risk reduction performance: Total units to ship overall; 66,139 cubic 
meters; 
Cost performance: Total lifecycle cost; Not separately reported. 

Risk reduction performance: Planned units shipped to date; 14,581 cubic 
meters; 
Cost performance: Planned cost to date; Not separately reported. 

Risk reduction performance: Actual units shipped to date; 4,160 cubic 
meters; 
Cost performance: Actual cost to date; Not separately reported. 

Risk reduction performance: Variance; -10,421 cubic meters; 
Cost performance: Variance; Not separately reported. 

Source: DOE. 

[End of table]

The importance of directly linking progress on cleanup with cost 
performance has been recognized by OMB. In a fiscal year 2005 program 
review of DOE, OMB found that DOE's cleanup program had not developed 
annual cost and schedule performance measures to monitor progress 
towards completing the cleanup mission. OMB officials said that better 
linking cleanup progress and cost performance in DOE's performance 
reporting would allow for tracking DOE's performance against its long 
term goals. 

DOE acknowledged that its performance reporting practices currently do 
not directly link progress on cleanup with performance against cost and 
schedule targets. According to a senior DOE adviser to the Principal 
Deputy Assistant Secretary for Environmental Management, the 
Department's earned value management system could eventually provide 
this linkage, but DOE is still working to fully implement the system 
and to ensure that it provides reliable data. He said that DOE's earned 
value management system will eventually produce information on the 
cost, schedule, and work completed over the lifecycle of all projects 
related to its cleanup mission, and may eventually provide an aggregate 
earned value score for the entire cleanup program. 

While these steps may be useful, for DOE's performance reporting using 
earned value to provide for a full understanding of cleanup 
performance, DOE will need to also report on the linkage between cost, 
schedule, and performance data by (1) generating comparable cost, 
schedule, and performance data at an activity level, such as processing 
and disposing of transuranic waste and (2) ensuring that the cost data 
is reported in relation to lifecycle cost targets, not just for a 
specific year or contract period. While DOE is working toward including 
lifecycle cost targets and performance in its earned value data, it is 
not taking steps to directly link risk reduction measures with cost 
performance at the activity level. According to a senior adviser to the 
Principal Deputy Assistant Secretary for Environmental Management, the 
department has been focused on ensuring that site cost estimates are 
reliable and that all mission-related projects are covered under the 
earned value system. However, unless this linkage is established, DOE 
performance reporting will not provide for a full understanding of 
progress being made by individual cleanup activities or whether it is 
on track with its overall $129 billion cost target for completing the 
cleanup program. 

Performance Reporting Does Not Highlight Critical Activities that Are 
Best Indicative of Overall Performance: 

Performance reporting should provide for a clear understanding by the 
Congress and the public of how an agency is progressing in achieving 
its program goals. In assessing how various government agencies 
reported on their progress, we noted in a 2004 report that agencies 
need to consider the needs of the information's user and best tailor 
performance information so that a clear picture of the agency's 
progress is presented. We found that an agency's performance data can 
have real value only if the data are used to highlight actual 
performance against an agency's planned goals.[Footnote 29]

DOE publicly reports on its progress toward achieving accelerated 
cleanup plan goals through various means, including providing 
information to the Congress in annual budget submissions, reporting 
progress against selected annual goals in the agency's annual 
performance and accountability report, and making information 
accessible on the department's Web site. In all three cases, DOE 
primarily relies on the risk reduction measures as the indicator of 
cleanup progress. For example, in its fiscal year 2006 budget request 
to the Congress, DOE provided information on all 16 risk reduction 
measures, including the amount of work estimated to be completed 
through fiscal year 2006, such as number of buildings torn down, and 
the estimated total amount of work to accomplish. In the budget 
request, DOE also included a variety of other program information, such 
as general cleanup achievements to date, and identified 7 risk 
reduction measures it would use to assess progress at the end of the 
fiscal year. Similarly, in accordance with federal reporting 
requirements, DOE provides performance information each year in its 
annual performance and accountability report that accompanies the 
department's annual financial statement. In the performance and 
accountability report, DOE describes the general goals of the cleanup 
program, external factors that could affect DOE's ability to achieve 
those goals, and its progress against selected performance goals for 
the year. Finally, on its Web site, DOE provides descriptive 
information for its 16 risk reduction measures, including how much work 
has been accomplished to date for each measure and the estimated total 
amount of work to accomplish for each measure. 

Although this information is useful, DOE's performance reporting does 
not present a complete picture of progress toward accelerated cleanup 
plan goals. For example, DOE has, up to now, reported on its progress 
as measured against annual goals, rather than its progress in meeting 
its overall $129 billion cost target and 2035 completion date. By doing 
so, DOE provided a different picture of the department's progress than 
if progress was compared with longer term goals. Two examples from the 
agency's performance reporting in its 2004 Performance and 
Accountability Report illustrate this point. In its 2004 report, DOE 
reported it met less than 80 percent of its annual goal of closing 9 
liquid waste tanks in fiscal year 2004. In fact, DOE met 0 percent of 
its goal, has closed no tanks since 1997, and is currently 
significantly behind its estimated lifecycle target for this activity. 
To regain its performance schedule, DOE would need to complete the 
regulatory process and close 19 waste tanks by the end of fiscal year 
2005. However, this is an unlikely achievement given the length of time 
of remediation and regulatory work that is required before the tanks 
can be closed. In a second example, DOE reported it had met less than 
80 percent of its annual planned target for packaging plutonium and 
uranium residues because it was 175 kilograms behind its accelerated 
schedule. However, calculating DOE's performance for this activity 
against the estimated lifecycle target indicates that DOE was actually 
33 kilograms ahead of its cumulative goal by the end of 2004. According 
to a senior DOE adviser to the Principal Deputy Assistant Secretary in 
the Office of Environmental Management, DOE plans to begin reporting 
its progress against lifecycle goals in the department's fiscal year 
2005 performance and accountability report. 

Another area of concern is that DOE's performance reporting does not 
highlight performance on critical cleanup activities that could best 
provide information about whether the department is on track to meet 
its $129 billion cost target. Among DOE's various performance measures, 
certain ones are more important for indicating whether DOE is on track 
with its overall accelerated cost and schedule goals, and may provide a 
different picture of progress than DOE is currently reporting. In the 
longer term, to provide an indication of progress toward overall 
accelerated goals, projects that account for a large portion of DOE's 
spending--and correspondingly contribute the most towards cost 
reductions--can serve as key indicators of progress. For example, DOE 
expects a significant portion of accelerated plan cost and schedule 
reductions to be achieved from two waste types that are the most 
difficult to address--radioactive tank waste and transuranic waste. 
DOE's radioactive tank waste program alone accounts for nearly 60 
percent--almost $30 billion--of DOE's estimated cost reductions under 
the accelerated plan. Highlighting performance in these areas would 
provide a better indication of how well DOE is progressing toward its 
longer term accelerated cleanup goals. As previously discussed, both 
radioactive tank waste and transuranic waste are the two areas where 
DOE's progress has fallen behind. In three of four risk reduction 
measures the department uses to track progress of its radioactive tank 
waste and transuranic waste activities, DOE has experienced delays that 
could impact cost. Furthermore, work on DOE's $5.7 billion waste 
treatment construction project at Hanford--an activity not tracked by a 
risk reduction measure--has been delayed, creating potentially 
significant cost and schedule increases. While DOE includes radioactive 
tank waste and transuranic waste in its performance reporting, the 
department does not identify the significance of these cleanup 
activities for meeting overall cleanup cost and schedule goals. 

In the short term, closure sites and key activities that are 
contributing to planned budget declines over the next few years may 
provide a good indication of whether DOE is currently on track to meet 
its planned accelerated cost target. DOE's accelerated plan calls for a 
decrease in annual funding requirements between 2005 and 2008. That is, 
DOE's annual funding requirement is planned to drop from about $7.3 
billion in fiscal year 2005, to about $4.5 billion by 2008--or a 
decline of about $2.8 billion. Almost 90 percent of this decline is 
attributable to 10 sites scheduled to be closed in 2006, and progress 
on eight key projects. Currently, the indicators for these sites and 
projects show that at least half are behind in some or all cleanup 
activities. For example, DOE's Miamisburg, Fernald, and Lawrence 
Livermore Laboratory sites--all scheduled to complete cleanup by 2006-
-are behind in at least one risk reduction activity. Similarly, DOE's 
spent nuclear fuel project at Hanford was in danger of exceeding its 
cost target as of April 2005. Providing aggregate information on the 
potential cost increases or schedule delays in this group of sites 
could help gauge DOE's ability to achieve a funding decline over the 
next few years. 

It is not clear what impact the challenges DOE faces will have on its 
overall ability to achieve near-term or longer-term cost reduction 
goals. However, DOE's performance reporting does not highlight this 
information nor does DOE report which activities are the most 
significant to achieving its overall cost and schedule goals. DOE 
officials said that, in their view, the department's current reporting 
of its performance in the annual performance and accountability report 
and in its budget submission is sufficient to provide an understanding 
of progress towards the program's long-term goals. DOE officials also 
noted that, internally, senior DOE managers use a variety of 
performance measures to monitor more critical elements of the program 
that are not included in any public reporting of accelerated cleanup 
progress. Nevertheless, because DOE reporting methods do not identify 
critical indicators such as progress on key cleanup activities, the 
department is not providing the Congress and the public the basis for a 
full understanding of its progress toward achieving the goals of the 
accelerated cleanup plan. 

Conclusions: 

DOE expected that its accelerated cleanup plan would allow it to clean 
up contaminated sites faster and at significantly lower cost than 
previously planned. While DOE has made progress toward its cleanup 
goals, important challenges remain and DOE is not likely to achieve its 
original goal of $50 billion in estimated cost reductions. While DOE's 
performance reporting provides information on some aspects of cleanup 
progress, it does not provide for a full understanding of how the many 
uncertainties DOE faces could affect achieving cleanup goals and does 
not include a meaningful analysis of the significance of the data. 
Furthermore, because DOE's reporting methods do not directly correlate 
cleanup results with the associated costs and fail to identify critical 
indicators, such as progress on key cleanup activities, DOE is not 
providing an adequate picture of its overall progress toward staying 
within the $129 billion total program cost and 2035 completion date 
goals. We believe that improving DOE's performance reporting to address 
these limitations would provide more complete information and allow for 
a more accurate assessment of DOE's progress toward achieving 
accelerated cleanup plan goals. 

Recommendations for Executive Action: 

To help DOE and the Congress monitor progress toward meeting DOE's 
accelerated cleanup plan cost and schedule goals, we recommend that the 
Secretary of Energy take the following two actions: 

* Improve DOE's performance reporting so that there is a clearer, 
discernable relationship at the activity level between cleanup 
accomplishments and the costs incurred in doing the work and 

* Identify in DOE's performance reporting to the Congress and others 
those performance measures that are the most critical to achieving cost 
and schedule goals, and summarize the progress on these measures and 
the potential impact of any problems that could affect achieving 
accelerated cleanup plan goals. 

Agency Comments and Our Evaluation: 

We provided a draft of this report to DOE for review and comment. In 
written comments, DOE's Principal Deputy Assistant Secretary for 
Environmental Management agreed with the report's recommendations. The 
Principal Deputy Assistant Secretary also provided technical comments 
as an enclosure to the letter. We have incorporated these comments as 
appropriate. DOE's written comments on our draft report are included in 
appendix III. 

Regarding the report's two recommendations, DOE agreed to improve its 
performance reporting so that there is a clearer, discernable 
relationship between cleanup accomplishments and the costs incurred in 
doing the work. DOE also agreed to identify and highlight in its 
progress reports to the Congress and others those performance measures 
that are the most critical to achieving cost and schedule goals, and 
summarize the progress on those measures and the potential impact of 
any problems that could affect achieving the goals. To aid in 
implementing these recommendations, DOE said it will continue to 
improve its earned value management system to serve as a link between 
performance measures and cost. 

In technical comments to us accompanying the letter, DOE disagreed with 
our discussion in the report that it should use present value analysis 
in calculating the estimated cost reduction it expects to achieve under 
its accelerated cleanup plan. DOE stated that we have misinterpreted 
OMB Circular A-94, Guidelines and Discount Rates for Benefit-Cost 
Analysis of Federal Programs, regarding the use of present value 
analysis. DOE said that present value calculations are more applicable 
to cost-benefit analyses, particularly when attempting to analyze the 
costs and benefits to various options or alternatives. DOE emphasized 
that its cost estimating methodology was developed solely for the 
purpose of estimating the program's environmental liability, and its 
cost reduction estimate is simply the difference between fiscal year 
2001 and fiscal year 2003 environmental liability estimates. DOE 
believes that since it was not attempting to calculate benefits, a 
present value analysis is not appropriate. 

In our view, our interpretation of the OMB circular is correct and, in 
fact, is supported by DOE's own guidance, which recommends using 
present value analysis as a standard methodology for cost comparisons 
of different alternatives. OMB Circular A-94 (revised October 29, 
1992), standard economic analysis, and DOE's guidance (Report to 
Congress, July 2002, Appendix A-Lifecycle Cost Analysis) recommend 
present value analysis as the appropriate technique for analysis of 
alternative options even if the benefits from different approaches are 
the same or a comparison of the benefits is not possible. As we 
previously reported, although using current dollar estimates may be 
appropriate for budget purposes, present value analysis is the standard 
methodology to be used for comparing costs of different alternatives 
that occur at different times, such as comparing DOE's accelerated and 
baseline cleanup alternatives. 

We are sending copies to other interested congressional committees and 
to the Secretary of Energy. We will also make copies available to 
others upon request. In addition the report will be available at no 
charge on the GAO Web site at http://www.gao.gov. 

If you or your staff have any questions on this report, please call me 
on (202) 512-3841. Contacts points for our Office of Congressional 
Relations and Public Affairs may be found on the last page of this 
report. Other staff contributing to this report are listed in Appendix 
IV. 

Signed by: 

Gene Aloise: 
Director, Natural Resources and Environment: 

[End of section]

Appendix I: Scope and Methodology: 

To determine what progress DOE has achieved under its accelerated 
cleanup plan, we identified the measures DOE uses to monitor and report 
its performance. We found that DOE uses two primary measures to monitor 
progress: its "Gold Chart" metrics (risk reduction measures) and earned 
value metrics. For DOE's risk reduction measures, we discussed with DOE 
officials--both at headquarters and at specific sites--how these 
measures were developed. We also discussed how these measures are used 
by DOE--both internally and for external reporting. We obtained and 
analyzed DOE's current risk reduction measures to determine both 
current status and implications of out year requirements for the 
overall cleanup. In reviewing DOE's efforts to develop earned value 
data, we reviewed various reports on DOE's earned value system, 
including a recent GAO report discussing the data and a 2004 National 
Academy of Sciences report.[Footnote 30] We reported in March 2005, 
that for several major projects, earned value management principles had 
not been properly implemented at the department to measure cost and 
schedule performance. In addition, the National Research Council 
reported in 2004 that the quality of earned value management in the 
department was inconsistent and may not be completely accurate. We also 
discussed DOE's earned value measures with DOE officials in its 
Environmental Management, Office of Performance Assessment and with DOE 
officials in the Office of Engineering and Construction Management. In 
part due to the concerns raised by GAO and others about the reliability 
of information from DOE's earned value system and in part because DOE 
had not completed addressing these concerns by more fully implementing 
its earned value management system, we did not report on earned value 
data as a measure of DOE's progress in achieving its accelerated goals. 

To determine how DOE implemented its accelerated strategy, we reviewed 
several documents at DOE headquarters providing the status of 10 
restructuring initiatives implemented when the accelerated initiative 
was started. We reviewed DOE policy and procedure documents, and 
discussed DOE's strategy to implement its accelerated plan with DOE 
headquarters officials in its Office of Environmental Management. We 
further reviewed site performance management plans--a document laying 
out each site's strategy for implementing the accelerated initiative. 

To understand how the accelerated cleanup plan was being implemented at 
the site level and progress made, we selected a nonprobability sample 
of 5 sites to review, based on several criteria.[Footnote 31] We 
started with a list given to us by DOE that contained all DOE cleanup 
sites, each site's expected completion date, each site's 2003 estimated 
lifecycle target, and each site's contribution to cost reductions under 
the accelerated initiative. We eliminated from consideration any site 
that (1) had completed cleanup by 2004; (2) had a 2003 estimated 
lifecycle target less than $1 billion, and (3) contributed less than 
$100,000 in cost reductions to DOE's overall $50 billion estimated cost 
reductions from implementing its accelerated initiative. This gave us a 
list of sites, which we placed into three categories, based on DOE's 
budget accounts: (1) sites expected to close by 2006, (2) sites 
expected to close by 2012, and (3) sites expected to close by 2035. We 
selected a minimum of one site from each category. In making our 
selection, we considered the following factors: geographic dispersion 
of the sites, the site's estimated contribution to DOE's annual budget, 
the diversity of waste types represented at the site, and contribution 
to DOE's estimated $50 billion cost reduction from acceleration. 
Applying these criteria, we selected the following five sites: Hanford 
Site--both DOE's Office of River Protection and Richland Operations 
Office; Savannah River Site; Idaho National Laboratory; the West Valley 
Demonstration Project, and DOE's Miamisburg Closure Project. For each 
site we selected, we reviewed and obtained information regarding cost, 
schedule, and performance under DOE's risk reduction measures. We 
independently verified, to the extent possible, the dollar figures and 
waste cleanup performance data provided to us by DOE, by taking various 
steps. For example, we analyzed budget formulation documents, 
documented waste cleanup assumptions, and obtained information on cost 
validation procedures. We determined that these data were sufficiently 
reliable for purposes of this report. In addition, at each site, we 
discussed with site officials implementation of the accelerated cleanup 
plan, progress toward meeting cost and performance goals, and any 
obstacles to meeting those goals. 

To develop information on the key assumptions underlying the Department 
of Energy's accelerated cleanup plan, we analyzed information and 
documents provided by DOE officials and contractors at DOE headquarters 
and various sites. For many of the sites, we reviewed the performance 
management plans to assess how their approach to site cleanup would 
change under the accelerated plan. To determine how those assumptions 
affected achieving the accelerated cleanup goals, we evaluated site 
estimates of how the proposed changes under acceleration would impact 
site cleanup activities. Analyzing the reports provided by DOE, we 
determined the key contributors to the planned cost reductions. We then 
assessed through review of various reports and interviews with 
responsible officials the status of the key initiatives. We also 
discussed the progress of the plan with state regulators and 
Environmental Protection Agency officials, DOE headquarters officials, 
including the acting Assistant Secretary for Environmental Management, 
and officials from other headquarters offices. 

In order to assess the reliability of the gold chart metrics and the 
cost and schedule data provided to us by DOE, we took several steps. 
First, we obtained and reviewed selected site baselines. These included 
reviews by DOE's Office of Engineering and Construction Management, as 
well as DOE's Office of Environmental Management. We also obtained and 
examined the review of DOE's fiscal year 2004 environmental liability 
estimate by DOE's independent auditor, KPMG. KPMG audits DOE's 
environmental liability estimate as part of its annual audit of DOE's 
financial statements. In addition to these steps, for the sites we 
visited, we obtained information on data reliability procedures from 
site and contractor officials to determine internal controls used to 
ensure accurate, complete, and timely data. Finally, we developed and 
administered a data reliability form to each site we reviewed, 
obtaining information including what types of tests are administered in 
database systems to ensure the accuracy and completeness of data 
entered into the system, if and how frequently data are reviewed by 
independent parties, and how DOE ensures risk reduction measures are 
independently verified. The forms were completed by DOE and contractor 
officials. We asked follow-up questions whenever necessary. Based on 
the information we obtained and our analysis of the information 
provided, we determined that the reliability of the data provided was 
adequate for the purposes of this report. As we noted throughout the 
report, we found methodological problems with DOE's reporting of cost 
data and estimation of cost reductions. In reporting its cost data, DOE 
incorrectly added cost numbers in actual (current) dollars for years 
prior to 2001 to cost numbers in constant 2003 dollars for years post- 
2001. DOE also incorrectly estimated cost reductions of $50 billion 
without adjusting for the time value of money. Since in our previous 
work we demonstrated the effect of these problems by correcting and re- 
estimating DOE's cost reductions, we did not do so again in this 
report.[Footnote 32] Therefore, we used DOE's estimates throughout as 
reported by DOE with no further correction. We conducted our review 
from June 2004 through July 2005 in accordance with generally accepted 
government auditing standards. 

[End of section]

Appendix II: DOE's Estimated Cost Reductions under the Accelerated 
Cleanup Plan: 

Table 8: Accelerated Cleanup Estimates: 

Dollars in thousands (2003 constant). 

Office: Albuquerque: 

Site/Program: Kansas City Plant; 
Closure date change from FY01: -1 year; 
Cost change from FY01(includes long-term stewardship)[A]: $1,440; 
FY03 Lifecycle Cost (does not include long- term stewardship)[B]: 
$28,199. 

Site/Program: Los Alamos Laboratory; 
Closure date change from FY01: 0; 
Cost change from FY01(includes long-term stewardship)[A]: - $726,528; 
FY03 Lifecycle Cost (does not include long-term stewardship)[B]: 
$1,436,564. 

Site/Program: Operations; 
Closure date change from FY01: -; 
Cost change from FY01(includes long-term stewardship)[A]: $256,797; 
FY03 Lifecycle Cost (does not include long-term stewardship)[B]: 
$437,280. 

Site/Program: Pantex; 
Closure date change from FY01: -9; 
Cost change from FY01(includes long-term stewardship)[A]: $23,220; 
FY03 Lifecycle Cost (does not include long-term stewardship)[B]: 
$186,539. 

Site/Program: Sandia National Laboratory; 
Closure date change from FY01: -3; 
Cost change from FY01(includes long-term stewardship)[A]: - $39,887; 
FY03 Lifecycle Cost (does not include long-term stewardship)[B]: 
$228,846. 

Office: Carlsbad: 

Site/Program: Waste Isolation Pilot Plant; 
Closure date change from FY01: -4; 
Cost change from FY01(includes long-term stewardship)[A]: -$3,697,077; 
FY03 Lifecycle Cost (does not include long-term stewardship)[B]: 
$4,967,519. 

Office: Chicago: 

Site/Program: Argonne National Laboratory; 
Closure date change from FY01: 6; 
Cost change from FY01(includes long-term stewardship)[A]: 
-$28,120; 
FY03 Lifecycle Cost (does not include long-term stewardship)[B]: 
$62,239. 

Site/Program: Brookhaven National Laboratory; 
Closure date change from FY01: 3; 
Cost change from FY01(includes long-term stewardship)[A]: $83,469; 
FY03 Lifecycle Cost (does not include long- term stewardship)[B]: 
$362,166. 

Site/Program: Operations; 
Closure date change from FY01: -; 
Cost change from FY01(includes long-term stewardship)[A]: $36,833; 
FY03 Lifecycle Cost (does not include long-term stewardship)[B]: 
$97,649. 

Office: Idaho[C]: 

Site/Program: Idaho National Laboratory; 
Closure date change from FY01: -35; 
Cost change from FY01(includes long-term stewardship)[A]: -$10,936,713; 
FY03 Lifecycle Cost (does not include long-term stewardship)[B]: 
$11,599,306. 

Office: Nevada[C]: 

Site/Program: Nevada Test Site; 
Closure date change from FY01: -2; 
Cost change from FY01(includes long-term stewardship)[A]: - $54,657; 
FY03 Lifecycle Cost (does not include long-term stewardship)[B]: 
$1,940,373. 

Office: Oak Ridge: 

Site/Program: Oak Ridge Reservation; 
Closure date change from FY01: 2; 
Cost change from FY01(includes long-term stewardship)[A]: 
-$1,503,154; 
FY03 Lifecycle Cost (does not include long-term stewardship)[B]: 
$6,883,568. 

Office: Oakland: 

Site/Program: Energy Technology Engineering Center; 
Closure date change from FY01: 0; 
Cost change from FY01(includes long-term stewardship)[A]: -$2,044; 
FY03 Lifecycle Cost (does not include long- term stewardship)[B]: 
$198,982. 

Site/Program: Lawrence Berkeley National Laboratory; 
Closure date change from FY01: 2; 
Cost change from FY01(includes long-term stewardship)[A]: -$24,611; 
FY03 Lifecycle Cost (does not include long-term stewardship)[B]: 
$33,165. 

Site/Program: Laboratory Energy-related Health Research; 
Closure date change from FY01: -1; 
Cost change from FY01(includes long-term stewardship)[A]: -$846; 
FY03 Lifecycle Cost (does not include long- term stewardship)[B]: 
$40,464. 

Site/Program: Lawrence Livermore National Laboratory; 
Closure date change from FY01: -1; 
Cost change from FY01(includes long-term stewardship)[A]: $30,473; 
FY03 Lifecycle Cost (does not include long- term stewardship)[B]: 
$504,405. 

Site/Program: Operations; 
Closure date change from FY01: -; 
Cost change from FY01(includes long-term stewardship)[A]: -$2,066; 
FY03 Lifecycle Cost (does not include long-term stewardship)[B]: 
$49,461. 

Site/Program: Stanford Linear Accelerator Center; 
Closure date change from FY01: 2; 
Cost change from FY01(includes long-term stewardship)[A]: $7,477; 
FY03 Lifecycle Cost (does not include long- term stewardship)[B]: 
$20,139. 

Site/Program: Separations Process Research Unit; 
Closure date change from FY01: 0; 
Cost change from FY01(includes long-term stewardship)[A]: 
-$5,085; 
FY03 Lifecycle Cost (does not include long-term stewardship)[B]: 
$207,881. 

Office: Ohio: 

Site/Program: Ashtabula Environmental Management Project; 
Closure date change from FY01: 0; 
Cost change from FY01(includes long- term stewardship)[A]: -$44,921; 
FY03 Lifecycle Cost (does not include long-term stewardship)[B]: 
$154,977. 

Site/Program: Columbus Environmental Management Project; 
Closure date change from FY01: 0; 
Cost change from FY01(includes long-term stewardship)[A]: -$2,504; 
FY03 Lifecycle Cost (does not include long- term stewardship)[B]: 
$161,095. 

Site/Program: Fernald Environmental Management Project; 
Closure date change from FY01: -4; 
Cost change from FY01(includes long-term stewardship)[A]: -$55,294; 
FY03 Lifecycle Cost (does not include long-term stewardship)[B]: 
$3,329,720. 

Site/Program: Miamisburg Environmental Management Project; 
Closure date change from FY01: 0; 
Cost change from FY01(includes long-term stewardship)[A]: -$128,648; 
FY03 Lifecycle Cost (does not include long-term stewardship)[B]: 
$1,304,317. 

Site/Program: Operations; 
Closure date change from FY01: -; 
Cost change from FY01(includes long-term stewardship)[A]: $453,820; 
FY03 Lifecycle Cost (does not include long-term stewardship)[B]: 
$453,820. 

Site/Program: West Valley Demonstration Project; 
Closure date change from FY01: -29; 
Cost change from FY01(includes long-term stewardship)[A]: -$326,532; 
FY03 Lifecycle Cost (does not include long- term stewardship)[B]: 
$1,109,463. 

Office: Paducah: 

Site/Program: Paducah Gaseous Diffusion Plant; 
Closure date change from FY01: 20; 
Cost change from FY01(includes long-term stewardship)[A]: $3,827,024; 
FY03 Lifecycle Cost (does not include long-term stewardship)[B]: 
$3,476,147. 

Office: Portsmouth: 

Site/Program: Portsmouth Gaseous Diffusion Plant; 
Closure date change from FY01: 6; 
Cost change from FY01(includes long-term stewardship)[A]: $7,539,895; 
FY03 Lifecycle Cost (does not include long-term stewardship)[B]: 
$4,469,936. 

Office: Richland: 

Site/Program: Hanford Site; 
Closure date change from FY01: - 15; 
Cost change from FY01(includes long-term stewardship)[A]: - $5,695,324; 
FY03 Lifecycle Cost (does not include long-term stewardship)[B]: 
$20,380,244. 

Office: River Protection: 

Site/Program: Office of River Protection; 
Closure date change from FY01: -18; 
Cost change from FY01(includes long-term stewardship)[A]: -$16,710,839; 
FY03 Lifecycle Cost (does not include long-term stewardship)[B]: 
$24,309,630. 

Office: Rocky Flats: 

Site/Program: Rocky Flats Environmental Technology Site; 
Closure date change from FY01: 0; 
Cost change from FY01(includes long- term stewardship)[A]: -$223,022; 
FY03 Lifecycle Cost (does not include long-term stewardship)[B]: 
$6,949,013. 

Office: Savannah River: 

Site/Program: Savannah River Site; 
Closure date change from FY01: -13; 
Cost change from FY01(includes long-term stewardship)[A]: -$14,089,347; 
FY03 Lifecycle Cost (does not include long-term stewardship)[B]: 
$23,725,375. 

Other: 

Cost change from FY01(includes long-term stewardship)[A]: [Empty]; 
FY03 Lifecycle Cost (does not include long-term stewardship)[B]: 
[Empty]. 

Sites closed before 2003[D]: 

Cost change from FY01(includes long-term stewardship)[A]: -$701,188; 
FY03 Lifecycle Cost (does not include long- term stewardship)[B]: 
$203,757. 

Environmental Management-wide costs[E]: 

Cost change from FY01(includes long- term stewardship)[A]: -$6,545,128; 
FY03 Lifecycle Cost (does not include long-term stewardship)[B]: 
$9,655,527. 

Costs transferred out in 2003: 

Cost change from FY01(includes long-term stewardship)[A]: -$723,818; 
FY03 Lifecycle Cost (does not include long- term stewardship)[B]: $0. 

Total: 

Cost change from FY01(includes long-term stewardship)[A]: - 
$50,006,905; 
FY03 Lifecycle Cost (does not include long-term stewardship)[B]: 
$128,967,766. 

Source: DOE. 

[A] Because of the difficulty in separating long-term stewardship and 
cleanup activities from the pre-accelerated cost estimates, DOE 
included both when calculating the cost change under the new plan. 

[B] The FY03 lifecycle cost estimate includes cleanup costs only since 
most long-term stewardship costs were transferred to other offices 
under the accelerated plan. 

[C] Includes operations office costs. 

[D] Because of work transfers within Environmental Management, some 
costs changed in 2003 at sites that closed before 2003. 

[E] Includes Headquarters and Program Direction costs. 

[End of table]

[End of section]

Appendix III: Comments from the Department of Energy: 

Department of Energy: 
Washington, DC 20585: 

July 18, 2005: 

Mr. Gene Aloise: 
Director: 
Natural Resources and Environment: 
U.S. Government Accountability Office: 
Washington, D.C. 20548: 

Dear Mr. Aloise: 

Thank you for your June 30, 2005, letter to the Secretary of Energy 
providing the draft report, Better Performance Reporting Needed to 
Assess DOE's Ability to Achieve the Goals of the Accelerated Cleanup 
Program, and requesting written comments from the Department of Energy 
(DOE). Your draft report contains two recommendations that DOE: (1) 
improve the linkage between performance measures so that there is a 
clearer, discernable relationship between how much cleanup has been 
accomplished and costs incurred in doing the work, and (2) identify and 
highlight in its progress reports to Congress and others those 
performance measures that are the most critical to assessing overall 
progress toward meeting accelerated cleanup plan goals. 

The Department agrees with the overall conclusion and accepts the 
recommendations. We provided comments to your staff on the draft 
Statement of Findings and appreciate the fact that many of our comments 
were incorporated into the draft report. However, we believe the draft 
still contains some inaccuracies and statements that could be 
misinterpreted. Enclosed are detailed comments that we respectfully 
request be considered as you finalize your report. 

As discussed in the report, the Office of Environmental Management's 
(EM) earned value management system (EVMS) is an important tool in 
measuring and monitoring scope, schedule, and cost. To aid in 
implementing the Government Accountability Office's (GAO) 
recommendations and to address the observations in the report, EM will 
continue to improve its implementation of EVMS to serve as a link 
between performance measures (risk reduction scope and schedule) and 
cost. In addition, EM will be emphasizing project risk management as a 
method to better manage the uncertainties associated with achieving 
mission goals. 

If you have any further questions, please contact me at (202) 586-7709 
or Mr. Mark W. Frei, Deputy Assistant Secretary for Business Operations 
at (202) 586-8754. 

Signed by: 

Charles E. Anderson: 
Principal Deputy Assistant Secretary for Environmental Management: 

Enclosure: 

[End of section]

Appendix IV: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Gene Aloise (202) 512-3841: 

Staff Acknowledgments: 

In addition to the individual named above, Chris Abraham, John 
Delicath, Doreen Eng, Doreen Feldman, Nancy Kintner-Meyer, Jeffrey 
Larson, Gregory Marchand, Mehrzad Nadji, Judy Pagano, Thomas Perry, and 
Bill Swick made key contributions to this report. 

FOOTNOTES

[1] Radioactive waste includes liquid, sludge, and solid waste. 
Radioactive tank waste--which DOE manages as high-level waste--is 
largely liquid waste and sludge resulting from the reprocessing of 
spent nuclear fuel and containing highly radioactive fission products, 
long-lived isotopes, hazardous chemicals, and heavy metals. DOE intends 
to dispose of the high-level constituents of this waste in a geologic 
repository now under development at Yucca Mountain in Nevada. DOE 
intends to dispose of the remaining waste constituents at its sites. 
Transuranic waste includes equipment, tools, and clothing contaminated 
with plutonium or other elements with atomic numbers higher than 
uranium. DOE disposes of its transuranic waste in a geologic repository 
in New Mexico. 

[2] DOE reports cost estimates that add actual (current) dollars for 
pre-2001 values, and constant 2003 dollars for values reported past 
2001, which DOE calls "2003 constant dollars." Unless otherwise noted, 
the numbers are reported in DOE's 2003 constant dollars and without any 
adjustments. 

[3] U.S. Department of Energy, A Review of the Environmental Management 
Program (Washington, D.C.: Feb. 4, 2002). 

[4] According to DOE, the department's adjusted cost estimates of both 
cleanup and long-term stewardship work in 2001 and 2003, were $192 
billion (before accelerated strategy) and $142 billion (under its 
accelerated strategy), in DOE's "2003 constant dollars," respectively, 
and resulted in the $50 billion cost reduction. Although DOE's $50 
billion estimate was not adjusted for the time value of money, it is 
the cost reduction estimate that DOE has cited publicly, such as in a 
November 2002 public meeting of the Environmental Management Advisory 
Board in Washington, D.C., and a March 2003 congressional testimony 
before the House Appropriations Committee, Subcommittee on Energy and 
Water Development, so it is used throughout this report. When it 
implemented its accelerated strategy, DOE was managing to a $129 
billion lifecycle cost, which is the 2003 estimate of $142 billion 
without long-term stewardship costs. 

[5] DOE's risk reduction measures address the following 16 cleanup 
activities: packaging plutonium, packaging enriched uranium, packaging 
plutonium and uranium residues, packaging depleted uranium, packaging 
high-level solid wastes, packaging spent nuclear fuels, eliminating 
liquid tank wastes, closing waste tanks, disposing of transuranic 
wastes, disposing of low-level and low-level mixed wastes, remediating 
release sites, eliminating material access areas, removing nuclear 
facilities, removing radioactive facilities, removing industrial 
facilities, and closing geographic sites. 

[6] As previously noted, DOE also uses an earned value management 
system to monitor large projects' progress toward cost and schedule 
goals. An earned value system, when fully implemented, is intended to 
provide managers the ability to examine cost, schedule and performance 
accomplishments on a project. We do not discuss DOE's earned value as a 
measure of progress in this report for two reasons. First, DOE has not 
fully implemented its earned value management system to measure all of 
its mission-related projects against a lifecycle cost estimate. In 
response to OMB recommendations noted above, DOE is currently working 
toward this goal. Second, we and others have raised concerns about the 
reliability of DOE's earned value data. For example, the National 
Research Council reported in 2004 that the Department's earned value 
management information may not be completely accurate. See National 
Academy of Sciences, Progress in Improving Project Management at the 
Department of Energy: 2003 Assessment (2004) (Washington, D.C.: 2004). 
In addition, we reported in March 2005 that for several major projects, 
earned value management principles had not been properly implemented to 
measure cost and schedule performance. See U.S. Government 
Accountability Office, Department of Energy: Further Actions Are Needed 
to Strengthen Contract Management for Major Projects, GA0-05-123 
(Washington, D.C.: Mar. 18, 2005). 

[7] For purposes of this report, we grouped DOE's 16 risk reduction 
measures into eight broad categories. 

[8] DOE's West Valley site completed treatment of its high-level tank 
waste in 2002. 

[9] As part of its radioactive tank waste treatment and disposal 
strategy, DOE plans to eliminate a large volume of low-activity waste 
in the tanks in its Salt Stone Facility where the waste is permanently 
immobilized on site using a concrete material called grout. However, 
efforts to operate this facility have been delayed. 

[10] The Savannah River Site closed two tanks in 1997. DOE planned to 
close 11 additional tanks through March 2005. However, this has been 
delayed due to legal and regulatory issues, discussed in this 
paragraph. 

[11] Pub. L. No. 108-375, § 3116 authorizes DOE to pursue activities 
that would allow tank closure at its Savannah River Site and the Idaho 
National Laboratory, subject to certain criteria, existing cleanup 
orders and agreements, and monitoring by the Nuclear Regulatory 
Commission. Section 3116 states that the authority does not apply to 
sites in the state of Washington, where the Hanford Site is located. 

[12] DOE began implementing the accelerated plan in 2002, but the 
accelerated cost estimates were not in place until fiscal year 2003. 

[13] In 2001, when the estimate was developed, the scope of work 
included both waste cleanup activities and postcleanup stewardship 
activities at the sites once the cleanup work is complete. 

[14] According to DOE officials, sites were allowed to request a higher 
target cost estimate, but had to have this approved by the Assistant 
Secretary. Four sites did make this request for their 2003 cost 
estimate. 

[15] To make these figures comparable, DOE made some adjustments. For 
example, DOE subtracted approximately $10 billion from its 2001 cleanup 
estimate of $202 billion to account for work that was included in its 
pre-accelerated scope but had not yet been included in 2003, and added 
approximately $13 billion of long-term stewardship work to its 2003 
cleanup estimate of $129 billion. DOE currently manages to the $129 
billion cost estimate. For comparison purposes, the adjusted estimates 
of both cleanup and long-term stewardship work in 2001 and 2003 were 
$192 billion and $142 billion, in DOE's stated "2003 constant dollars," 
respectively. See also footnote 2. 

[16] U.S. General Accounting Office, Nuclear Waste: Challenges to 
Achieving Potential Savings in DOE's High-Level Waste Cleanup Program, 
GAO-03-593 (Washington, D.C.: June 17, 2003). 

[17] U.S. Department of Energy Office of Inspector General, Audit of 
the U.S. Department of Energy's Consolidated Financial Statements for 
Fiscal Year 1998, IG-FS-99-01 (Germantown, Md: Feb. 25, 1999). See also 
National Research Council, Improving Project Management in the 
Department of Energy (Washington, D.C.: June 1999). 

[18] As defined in DOE's fiscal year 2004 financial statements, 
contingency estimates are intended to account for the uncertainties 
associated with the technical cleanup scope of the program. 

[19] U.S. General Accounting Office, Nuclear Waste: Absence of Key 
Management Reforms on Hanford's Cleanup Project Adds to Challenges of 
Achieving Cost and Schedule Goals, GAO-04-611 (Washington, D.C.: June 
9, 2004). 

[20] OMB Circular No. A-94, Guidelines and Discount Rates for Benefit- 
Cost Analysis of Federal Programs (Washington, D.C.: Oct. 29, 1992). 

[21] DOE's own guidance requires a present value analysis to discount 
future dollars to reflect the time value of money. Present value 
analysis is a method used to evaluate alternative expenditures that 
occur at different times and put them on a common basis for comparison. 
It goes beyond adjusting the values for inflation, which is a 
correction for changes in the purchasing power of the dollar. 
Therefore, conducting a present value analysis goes beyond computing 
cost estimates in constant year dollars. 

[22] In addition, DOE's cost estimate includes actual (current) dollars 
for pre-2001 values, rather than calculating these in constant 2003. As 
a result, DOE's 2001 and 2003 baselines do not fully reflect constant 
2003 dollars. 

[23] Natural Resources Defense Council v. Abraham, 388 F.3d 701 (9th 
Cir. 2004). 

[24] Pub. L. No. 108-375, § 3116 (2004). 

[25] State of Washington v. Bodman, No. CV-03-5018-AAM (E.D. Wash.) 

[26] Washington state voters passed Initiative 297, the Cleanup 
Priority Act, now codified in chapter 70.105E of the Revised Code of 
Washington (RCW), in November 2004. Its scope and constitutionality are 
currently being litigated in the federal district court and in the 
Supreme Court of Washington. United States v. Hoffman, No. CV-04-5128- 
AAM (E.D. Wash., filed Dec. 1, 2004), certified to Washington state to 
address interpretation of state law, United States v. Hoffman, No. 
76629-1 (Wash. Feb 8, 2005). 

[27] U.S. Government Accountability Office, Performance Budgeting: 
Efforts to Restructure Budgets to Better Align Resources with 
Performance, GAO-05-117SP (Washington, D.C.: Feb. 2005). 

[28] Executive Office of the President, Office of Management and 
Budget, OMB Circular No. A-11 (2004), Part 6, Section 220-1--Preparing 
and Submitting Performance Budgets (Washington, D.C.: July 2004). 

[29] U.S. Government Accountability Office, Results-Oriented 
Government: GPRA Has Established a Solid Foundation for Achieving 
Greater Results, GAO-04-38 (Washington, D.C.: Mar. 10, 2004). 

[30] U.S. Government Accountability Office, Department of Energy: 
Further Actions Are Needed to Strengthen Contract Management for Major 
Projects, GAO-05-123 (Washington, D.C.: Mar. 18, 2005), and National 
Academy of Sciences, Progress in Improving Project Management at the 
Department of Energy: 2003 Assessment (2004) (Washington, D.C.: 2004). 

[31] Results from nonprobability samples cannot be used to make 
inferences about a population, because in a nonprobability sample some 
elements of the population being studied have no chance or an unknown 
chance of being selected as part of the sample. 

[32] U.S. General Accounting Office, Nuclear Waste: Absence of Key 
Management Reforms on Hanford's Cleanup Project Adds to Challenges of 
Achieving Cost and Schedule Goals, GAO-04-611 (Washington, D.C.: June 
9, 2004). 

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