ATOMIC ENERGY DEFENSE ACCOUNTS, 06/10/1993, Testimony
- Basis Date:
- 19930830
- Chairperson:
- J. Exon
- Committee:
- Senate Armed Services
- Docfile Number:
- T93AH200
- Hearing Date:
- 19930610
- DOE Lead Office:
- DP/IS
SUB
- Committee:
- Nuclear Deterrence, Arms Control and Defense Intelligence
- Hearing Subject:
- ATOMIC ENERGY DEFENSE ACCOUNTS
- Witness Name:
- H. O'Leary
-
Hearing Text:
-
Statement of Hazel R. O'Leary
Secretary of Energy
U. S. Department of Energy
Before the
Committee on Armed Services
Subcommittee on Nuclear Deterrence Arms Control
and Defense Intelligence
United States Senate
June 10, 1993
I. INTRODUCTION
Mr. Chairman and members of the Committees I am pleased to appear
before you today to discuss the Department of Energy's Fiscal Year 1994
budget request for Atomic Energy Defense Activities. I would like
to present the Department's priorities and plans for meeting our
national security responsibilities; providing for the health and safety
of all our workers and the communities which host our activities;
mitigating impacts on workers and communities due to decreased defense
work; improving our Nation's economic future, and fulfilling our
environmental restoration and waste management responsibilities.
Evolving international events have provided the Department of Energy an
opportunity to mobilize and redirect resources to respond to the
changing needs of our Nation and our Administration. We are firmly
committed to meeting this challenge.
II. BUDGET OVERVIEW
The FY 1994 request for Defense Programs activities totals $4.7
billion in "new budget authority that is allocated among the following
programs: Weapons Research, Development, and Testing -- $1.74
billion; Stockpile Support $1.62 billion; Materials Support -- $795
million; Reconfiguration $123 million; Weapons Program Direction -- $284
million; and Worker Training and Adjustment -- $100 million. The
request also includes $100 million for separation payments and
outplacement assistance under Weapons Program Direction. In FY 1994,
the Department also proposes to apply a total of $696 million of prior
year unobligated balances and credits to the $4.7 billion in new budget
authority to reduce the amount of new funding required for our Defense
Programs activities.
In addition to the $4.7 billion for Defense Programs, the budget
request includes $1.3 billion for activities such as Naval Reactors,
and the Office of Intelligence-and National Security.
The Department's FY 1994 budget request for Intelligence and National
Security is $538.7 million, a six percent increase from the FY 1993
appropriation. This increase will support nuclear nonproliferation
activities and strengthen the Department's assessments of worldwide
nuclear weapons proliferation. In addition, the request will enhance
the Department's role in export controls, international safeguards, and
other policy countermeasures.
This request focuses on improving analyses of intelligence on nuclear
supplier nations and their attendant procurement networks; on worldwide
nuclear material production technology; and on proliferating
countries' efforts to match warhead designs to delivery systems. The
Intelligence and National Security budget request also supports 456
full-time-equivalents and includes $22.7 million for capital equipment.
The Department's FY 1994 budget proposal for Environmental Restoration
and Waste Management totals $6.5 billion. of this amount, $5.5 billion
constitutes the Defense Environmental Restoration and Waste Management
request. The Department will continue many Federal facility cleanup
activities, initiate new projects, and complete a number of other
environmental management activities. This request represents an
increase of approximately $600 million, 12 percent above the amount
appropriated in 1993 for defense atomic energy activities.
Specifically, this increase includes $373.7 million of transfers
associated with shutdown of Defense Programs facilities.
III. DOE SAFETY AND HEALTH INITIATIVE
Our Administration has solidified its commitment to protect the health
and safety of workers, the public, and the environment. Last month I
announced a comprehensive nuclear and occupational safety initiative to
deliver on this commitment. The initiative includes a clear
articulation of expectations for safety and health through: 1)
the development of a Departmental Safety and Health Policy and 2)
acceleration of issuance of the Price-Anderson nuclear safety rules. We
have clarified the roles of independent oversight by enhancing the
authority of the Assistant Secretary for Environment, Safety and Health
to force cessation of unsafe operations and by rescinding the 60-day
notice requirement for assessment of our facilities by this office. We
have established a policy to establish meaningful Employee Safety and
Health Committees at DOE sites, and we have initiated a comprehensive
strategy for continuous improvement. This comprehensive strategy
includes: 1) transition to external regulation of DOE by the
Occupational Safety and Health Administration; 2) a comprehensive
classification review of environment, health and safety data to enhance
the free and timely flow of information to the workers and public in
accord with legitimate national security interests; 3) providing an
occupational safety and health program for DOE federal employees; 4) a
prompt amendment to the existing accident investigation process to
improve the independence and effectiveness of investigations in
response to fatalities and other serious incidents; and 5) commitment to
a process which involves experts from the public and private sectors
who are knowledgeable in the management of nuclear safety, occupational
safety and health, and environmental protection to determine how the
Department can continue to improve its oversight and management
functions including definition of expectations, development of
performance measures and mechanisms to ensure accountability.
Our immediate goals and comprehensive strategy are designed to arrive
at lasting improvement in the Department's safety and health
performance.
IV. MANAGEMENT AND CONTRACTING IMPROVEMENTS
In addition to our environment, safety and health initiatives, I have
recently established a series of teams, comprised of policy-level and
career officials throughout the Department, to address cross-cutting
Departmental priorities. These teams include a focus on: Environment;l
Restoration; Defense Conversion; Nuclear Waste; Applied Research and
Technology Development; Infomation Management; Human Resource Strategy;
Outreach; Correspondence Improvement; Climate Change/Global Environment
Review; Conventional Fuels; Energy Policy Act Implementation; Energy
Taxes/Economic Stimulus; International Priorities; and the Mission
of the Laboratories.
This latter team will examine the roles, missions, and core competencies
of the multiprogram laboratories and the major program-dedicated
laboratories. The team will focus on how these laboratories can be
utilized to achieve the Department's priorities Emphasis will be placed
on viewing the laboratory system as a whole, with an eye toward
maximizing the system's benefit to the Department and the Nation,
while reducing redundancy and cost. The laboratories will be full
participants in this review.
We cannot carry out our commitments effectively and efficiently
without also improving our contract management. If we are to make real
progress in contract management, we must aggressively change the way
DOE conducts its business to ensure that there are clear expectations,
accurate performance measurements and careful contract monitoring.
Although there have been some improvements, DOE continues to suffer
from what, the General Accounting Office terms "systemic contract
management weaknesses". Essentially, there is concern both inside ind
outside the Department that the unique contracting system that built
the nation a nuclear arsenal of unsurpassed power, needs a major
overhaul to accomplish the changing mission of cleaning up after the
Cold War, managing the remaining warheads, strengthening our
nonproliferation efforts, and pursuing critical science and energy
missions efficiently and effectively.
Last month I announced a series of short and long-term initiatives to
improve contract management. The short-term initiatives are designed to
produce real cost savings for taxpayers and to send a strong signal to
contractors, Congress, and the public that we are serious about putting
our financial house in order. The long-term initiatives are designed to
make fundamental structural and functional improvements in the
Department's approach to contracting.
The short-term contracting initiatives include: 1) a freeze on
contractor salaries for one year; 2) a reduction in the use of support
services contractors; 3) an increase in contractor accountability for
civil penalties; 4) improved control over indirect costs; and 5)
improved acquisition regulations.
The long-term contracting initiatives include: 1) the establishment of
a DOE-wide, contract reform team to recommend specific administrative,
financial and legislative improvements to contracting mechanisms and
practices to increase accountability, stimulate competition and
simplify administration; and 2) improvement of contracting through a
major Departmental realignment which, among other things, established
the Office of the Associate Deputy Secretary for Field Management.
This office will coordinate the activities of DOE's eight multi-purpose
operations offices, each of which has direct responsibility for
contracting. Through this office, we will be able to impose greater
discipline where necessary, on the contracting practices of the
Department. Other long term initiatives include: 3) a review of the
potential to increase the ratio of federal to contractor employees to
reduce costs; 4) improved and more frequent communication with
organized labor on contract issues and 5) providing quality training
to employees to improve contract management.
Taken collectively, these initiatives and the involvement and
commitment of the employees, contractors, and stakeholder of the
Department, will help assure we can meet our critical missions in an
efficient and effective manner.
V. DEFENSE PROGRAMS MISSION
The diminishing strategic military threat, due to the end of the Cold
War and break-up of the Soviet Union, has provided the opportunity to
redirect funds from weapons production activities to other DOE critical
missions. For the future, the main tasks of the nuclear weapons complex
will be the dismantlement of weapons, the protection of nuclear
materials, the maintenance and surveillance of the residual nuclear
weapons stockpile and reconfiguration of the complex to one which is
smaller, less diverse, and less expensive to operate. As we address
these changes and consolidate the nuclear weapons complex we will
provide the necessary safeguards program to support the nuclear
deterrent.
Our Defense Programs activities will maintain the nuclear weapons
stockpile with a focus on safety and security of existing weapons;
research, development, and testing; weapons dismantlement, effective
emergency response capabilities and the effective management of nuclear
materials. We remain committed to assuring that all of our operations
and activities in Defense Programs are carried out in a manner which
assures the continued protection of the environment and the health and
safety of our workers and host communities. We will continue to
make progress in our environmental, safety and health (ES&H) programs
and to work with the Defense Nuclear Facilities Safety Board (DNFSB) in
assuring improvements to our operations. In addition we will work
with the Environmental Protection Agency (EPA) and states to review the
scope and priority of ES&H projects in light of the reductions in
planned defense work and related changes in the FY 1994 budget. The
FY 1994 budget provides more than a billion dollars directly related
to ES&H projects across the Defense Programs complex.
VI. RESEARCH AND DEVELOPMENT
With the dissolution of the Soviet Union, the potential proliferation
of weapons of mass destruction has become an increasingly important
security threat. Recent events in North Korea, Iraq, and the other
parts of the world remind us that nuclear uncertainties still exist in
four important areas: proliferation; arms control; dismantlement, and
nuclear terrorism. Research and development at the laboratories is
required to develop and maintain technologies to support our interests
in all these areas.
Even with a much smaller nuclear weapons stockpile, research and
development is still required to ensure its continued safety, security,
and reliability. Research and development will also reassure our allies
that this Nation remains committed to its leadership role of nuclear
deterrence and nonproliferation. The Departments' weapons laboratories
will play a key role in helping assure an effective safeguards program
for the Nation's nuclear weapons program and in the reconfiguration of
the weapons complex to meet the challenges of the future.
The DOE defense laboratories are the principal repositories of the
technical knowledge and technologies required to control proliferation
of nuclear weapons and weapons of mass destruction. In addition, their
expertise in verification and safeguards technologies, including
satellite and earth-based detection and monitoring, are critical to
international efforts to monitor and control nuclear materials and/or
device testing.
The Lawrence Livermore, Los Alamos, and Sandia National Laboratories,
while originally chartered for their nuclear weapons mission, also
serve other defense and non-defense needs of our Nation. The defense
laboratories contain a wealth of technologies, facilities, and
expertise applicable to virtually every area of science and technology.
It is the scientists, engineers, and technicians at the defense
laboratories who provide the advances in, among other things,
computational sciences, material sciences, physics, chemistry,
systems engineering and production processes. These technologies
not only contribute towards maintaining the viability of this Nation's
nuclear deterrent but also represent a vast technological resource that
can and is being transferred to the civilian sector to stimulate
long-term economic growth.
VII. TECHNOLOGY TRANSFER
The Defense Programs technology transfer program leverages the skills
and limited research and development dollars of the weapons
laboratories with those of American industry to benefit both our
defense needs and Nation's economic needs.
The weapons laboratories have traditionally worked on the leading edge
of advanced technologies necessary to maintain the Nation's nuclear
deterrent. Among others, these technologies include: microelectronics
and photonics, precision engineering and manufacturing, computational
modeling of processes and products, high performance computing,
advanced materials development and processing, and the development of
nondestructive analytical tools. All of these technologies have
application to American industry and are critical to competitive
industrial activities.
The Defense Programs technology transfer initiative capitalizes on
these advances by investing in dual-use technologies that are critical
to our Atomic Energy Defense Activities, but also have industrial
applications. These dual use technologies either appear in
the list of critical technologies included in the annual Defense
Critical Technologies Plan or the biennial National Critical
Technologies Report. To ensure that Defense Program funds are
effectively invested in technologies critical to our defense needs
while also supporting U.S. industrial needs, Defense Programs has
established a Laboratory Coordinating Board consisting of the
Directors of the Offices of Research and Technology Applications at the
three weapons laboratories. The Board helps to ensure that all
technology transfer projects provide a benefit to the Nation's security
and are dual use in nature.
Having started from zero in FY 1991, Defense Programs now has over 125
cost shared CRADAs (Cooperative Research and Development Agreements) in
place with a total value of government and industry investment of over
$400 million. Defense Programs expects to have a portfolio of over 200
CRADAs at the close of FY 1994. During the most recent proposal
phases the requests exceeded Defense Programs funding availability by
seven to one.
By all indicators, industry's interest in the scientific and technical
capabilities of the Department's laboratories--and particularly its
three weapons laboratories--is at an all time high. The reasons for
this are clear. First, because the investments that have been made in
these institutions over the past fifty years have resulted in core
capabilities, unique facilities, and multi-disciplinary research teams
that cannot be found easily, or at all, elsewhere in society. And
second, because the laboratories are recognized leaders in a full range
of technology areas that are critical to private sector needs,
including advanced materials, biotechnology, information systems, and
advanced manufacturing. In each of these areas, the Department
currently has major dual - use collaborations underway, and has
identified additional efforts that would contribute markedly toward
both the defense needs of the nation and the competitive needs of the
private sector. The support provided by your Committee will help the
Department reach the potential that these important collaborations
offer.
The power behind much of the Department's technology transfer
activities is the creative genius of the scientists and engineers at
the laboratories. While it may be easy for me to say that these
personnel are creative, it is better to listen to others with a more
independent perspective. For example, I would point to the fact that
the Department of Energy laboratories as a whole, and the three
weapons laboratories in particular, receive more of the "R&D 100
Awards" announced each year by R&D Magazine than any other group of
scientists in the nation, public or private.
Our vision gives the Department a more focused direction that will
strengthen the Nation's preeminence in scientific institutions.
This can be achieved by structuring our research and development
activities to support not only mission- oriented defense, science, and
energy research, but long-term benefits to the United States public in
Jobs and quality of life.
VIII. NUCLEAR TESTING
The FY 1993 Energy and Water Appropriations Act places restrictions on
nuclear testing, which include a test ban beginning October 1, 1996.
The legislation allows the Department to conduct up to 15 tests, during
the period July 1, 1993, to September 30, 1996. This testing is
permitted only after the President submits an annual testing plan and
90 legislative days have passed without congressional disapproval.
In January. 1993 the previous Administration submitted a report to
Congress as required by the FY 1993 Energy and Water Appropriations
Act. This report lacked the required testing plan. On February 12,
1993 President Clinton notified Congress of his intent to submit a new
testing plan to Congress. This plan is now being finalized among the
National Security Council, the Department of Defense, Department of
Energy, Department of State, and other federal agencies for submittal
to the President for his consideration and submission to Congress in
the near future.
IX. NUCLEAR MATERIALS MANAGEMENT
Another key element of our defense responsibilities is nuclear
materials management. Nuclear weapon stockpile requirements have
declined and the United States has sufficient quantities. of plutonium
and highly enriched uranium to support the projected nuclear weapons
stockpile needs well into the next century. We will ensure the
continued safety, security, and efficient management of these valuable
materials whether returned for defense needs, other purposes, or
identified for eventual waste management and disposition. In addition
to uranium and plutonium, the Department has the responsibility to
maintain adequate supplies of tritium for the Nation's nuclear
deterrent.
X. TRITIUM SUPPLY
Based on the currently approved Nuclear Weapons Stockpile Plan, there
is sufficient tritium in the inventory to meet the requirements of the
stockpile, including a several year reserve, until late in the next
decade. Therefore, the Department plans to transition the K-Reactor
this year to cold standby status with no planned provision for
restart. We will be working with the Department of Defense over the
next two years to develop a contingency plan to meet unforeseen tritium
needs after the K-Reactor is shut down.
Between now and the time when a new production source for tritium
becomes necessary, the United States will rely on weapons
dismantlements, recycling, and existing inventories of tritium to
support weapons stockpile requirements. Sufficient time is available
for the Department to plan responsibly for an appropriate and
cost-effective replacement source for tritium to maintain our nuclear
deterrent.
The Department is currently reviewing the following production
technologies for a long term replacement source for tritium including:
three reactor technologies--heavy water, light water, and modular
high-temperature gas-cooled--and a linear proton accelerator. These
alternatives will be discussed in the reconfiguration Programmatic
Environmental Impact Statement, which is scheduled for public comment
later this year.
XI. RECONFIGURATION OF THE WEAPONS COMPLEX
The current weapons complex is too large, inefficient and burdened with
excessive overhead costs compared to direct production costs.
The goal of the reconfiguration program is to restructure the weapons
complex into a smaller, less diverse, and less expensive operation. The
Department's unique nonnuclear and nuclear production capabilities will
be maintained, although not necessarily in their present form or scope.
Likewise, even though the weapons laboratories and production plants
are being reduced in scope, we will not compromise our abilities to
support the remaining stockpile. The expertise of our laboratories and
production plants is essential to support stockpile surveillance,
evaluation and maintenance, and to make nuclear weapons repairs when
required. It will be relied on to guard against technological surprise
or to resume production, if directed by the President. The unique
knowledge and capabilities developed in the weapons complex from the
technical basis of our nonproliferation technologies.
A. NUCLEAR RECONFIGURATION
Reconfiguration of the nuclear elements of the Nuclear Weapons Complex
is being addressed through preparation of a Programmatic Environmental
Impact Statement (PEIS). The PEIS will consider the environmental
consequences of constructing and operating the storage facilities and
the associated processing, laboratory and fabrication support
facilities, as well as transporting weapons materials. Five sites
(Hanford, Idaho National Engineering Laboratory, Pantex, Oak Ridge
Reservation, and Savannah River Site) are currently being considered as
candidate sites for the nuclear functions of the future weapons
complex operations.
Since the initial public scoping meetings on the Reconfiguration
PEIS in the Summer of 1991, the end of the Cold-War has brought
significant changes. These changes have required that we take a
thorough look at assumptions and plans for the future direction and
needs of the weapons program. The Department will address
these changes and the revision to the initial reconfiguration plans in
a revised Notice of Intent to be published in the Federal Register-
this summer. The notice will be distributed.widely to affected
stakeholders and the public to assure opportunity for input and
comments. Based on this process, a revised draft PEIS will be
released to the public for comment late this year. The Department
will then proceed to complete the PEIS in late 1994, contributing
to an eventual Record of Decision on the reconfiguration of the
weapons complex.
B. NONNUCLEAR RECONFIGURATION
Under the preferred alternative for reconfiguration of the non"nuclear
portion of the weapons complex, activities would be terminated at the
Mound and Pinellas Plants as would the nonnuclear manufacturing
activities at the Rocky Flats Plant. The preferred alternative would
lead to the consolidation of most nonnuclear manufacturing activities
at the Kansas City Plant. Tritium work would be consolidated it
Savannah River where-most tritium work is presently performed.
The Department has prepared a number of separate analyses and studies
on this proposal. One such study, the Nonnuclear Reconfiguration Cost
Effectiveness Report, was challenged by several stakeholders who would
be affected by the closure of plants or activities.
In order to address these concerns, I directed the initiation of
reviews by three independent consultants to evaluate the findings which
support the cost effectiveness certification in the report. These
consultants were selected in consultation with elected officials of
each of the involved states. The consultants began their work in
early April and have recently presented their final reports to me.
Based on these reports, I have confirmed the prior certifications that
the proposed nonnuclear reconfiguration would be cost effective and
would not increase the technological, environmental, safety an health
risk relating to the operation of the facilities of the Department.
The process towards nonnuclear consolidation is now proceeding.
The nonnuclear aspects of the weapons complex are being addressed in
the Nonnuclear Consolidation Environmental Assessment, which was
completed and distributed to affected States and Indian tribes for
preapproval review in December 1992. These States and Indian tribes
have provided comments, and the Environmental Assessment is being
revised to address them.
In order to assure a smooth transition that maximizes the savings
from consolidation, the Department will provide assistance in
mitigating the adverse effects of this downsizing. We are committed
to an economic conversion process that includes: funding for local
community economic planning that will allow communities to identify
alternatives to defense activities; preparing potential facility reuse
and worker retraining plans to assist in the transition; and providing
seed money for the sites to develop new ventures that would provide
alternative missions for the facilities and meet the standards of the
Technology Reinvestment Project created by Congress last year.
XII. WORKER AND COMMUNITY ASSISTANCE
The Department is preparing a comprehensive worker retraining and
economic adjustment assistance program for workers and communities
affected by layoffs or other restructuring actions due to the decline
in the defense workload. The effort will address such matters as plans
for work force retraining and reassignments; community economic
adjustment plans; worker involvement in work force change decisions;
retirement incentives; retraining; preference in hiring at other DOE
facilities; outplacement services; training assistance in coordination
with the Department of Labor and affected states; relocation
assistance; and continuation of health benefits for 3 years. The key to
success in our efforts will be direct involvement and coordination
with Federal, State and local agencies, unions, industry, and other
interested parties.
This process has already begun and a series of meetings and planning
sessions have been held at our sites. A discussion with national-level
stakeholders is planned in Washington on June 11, 1993 with over 50
organizations invited.
The number of employee reductions will depend on the degree of
success in efforts to retrain workers for jobs in our environmental
clean-up and energy programs and on the number of employees who
choose to accept voluntary retirement, separations packages, or who
otherwise choose to start a new career outside of DOE. Should
additional funding be required to accomplish this transition
initiative, the Department is committed to providing for these
requirements from within other programmatic funding. We are hopeful
many of these employees will transfer into other Departmental
activities, such as environmental cleanup or energy programs, so that
they can apply their skills and dedication to other missions of the
Department.
XIII. OFFICE OF INTELLIGENCE AND NATIONAL SECURITY
As part of the recent reorganization of the Department, we have created
the Office of Intelligence and National Security with two principal
goals in mind. First, to consolidate related functions so the
Department can more efficiently support national security objectives,
utilize the unique capabilities at the Department's national
laboratories in support of those objectives, and respond to the high
priority areas of concern posed by 'the proliferation of nuclear
weapons and technology. For example, the office's Proliferation
Detection Program is designed to apply research and technology
development to detect and characterize nuclear weapons materials a:nd
components subject to proliferation. The second goal of the
reorganization is to support the President's plan for reinventing
Government, we are improving the daily effectiveness of the Department
by reducing the number of organizations that report directly to me.
The Office of Intelligence and National Security has four major
responsibilities. The first is to provide intelligence analysis,
research and development and related support to policy agencies in
DOE's core areas of technical expertise in foreign nuclear materials
and weapons, nuclear proliferation and arms control, nuclear reactor
operations and safety, foreign science and technology, environmental
issues with respect to nuclear contamination, and international energy
economic competitiveness and trade.
The second responsibility involves policy analysis and formulation to
support the Administration's overall priorities and programs in the
areas of arms control and nonproliferation. This requires close
cooperation with other Executive Department agencies in verifying
treaty requirements and in developing technology to support treaty
compliance, and monitoring compliance with export control laws and
statutes concerning nuclear and dual-use technologies. Support is
also given to a variety of international groups as well. Finally, we
are supporting the former Soviet Union republics on safe and secure
transportation, storage, and dismantlement of nuclear warheads.
Overseeing and directing the Department's safeguards and security
program is the third major responsibility. This program establishes
policies for the classification and declassification of information,
creates sensible and cost- effective safeguards for the Department's
facilities and technologies, and manages our security clearance
program.
Finally, this organization provides contingency planning and
coordination for our response to worldwide energy-related emergencies,
as called upon, and for emergencies at Departmental facilities. It
serves as the Department's focal point and interagency contact for
emergency preparedness and response activities, and it- maintains
systems to detect emergencies, assess their severity and consequences,
and provide for effective response and management.
A significant, and early initiative of this office is prompt review
of our classification program. During my confirmation hearing, I
stated that I am committed to a Departmental culture of openness and
straight talk. The President wishes to make the government more open
and has requested review of the cold war rules on secrecy. The Office
of Intelligence and National Security will lead this effort in the
department to provide a fresh look at the DOE's classification
program to ensure that our policies and procedures are in step with the
new national and international environment. This initiative will
also provide priority to building public confidence in the Department's
environmental, safety and health practices by making more information
publicly available.
XIV. OFFICE OF ENVIRONMENTAL RESTORATION AND WASTE MANAGEMENT
The task of struggling with the environmental consequences of defending
our nation over the last five decades has been and will continue to be
difficult. The technical challenges are demanding. The managerial
problems of building an efficient, cost effective organization are more
demanding. Finally, the job of persuading the American people that the
Department is honestly committed to the protection of the public health
and the environment is perhaps the most difficult and necessary task of
all.
A. CHALLENGES
Before -I review the various activities of the Environmental
Restoration and Waste Management program, I would like to describe our
specific challenges and possible solutions to current problems. I will
also discuss plans for land use and review the steps we are taking
to.improve contractor accountability.
The Administration has dedicated itself to honor the Government's
obligation to clean up the DOE nuclear weapons complex to protect our
environment and the health and safety of our citizens and workers.
As previously stated, many obstacles exist, such as the magnitude and
complexity of the cleanup task. The unspecified cleanup Department is
also faced with incomplete land use planning standards, and a lack of
cost-effective innovative technologies. There is excessive focus on
characterization of sites rather than cleanup of sites, a lack of
certainty in the availability of treatment and disposal sites, and a
need for greater contractor accountability.
B. MANAGEMENT STRATEGIES & SOLUTIONS
The Job now is to reshape an environmental program that will sustain
over long-term pressures. This can be done with a clear strategy
followed by implementation that will gain the trust and confidence of
Congress, the States, and our citizens. We must work hard to
effectively address the truly urgent risks that exist at our sites.
Although large sums of money have been spent to characterize and
understand the problems in our system, we need to extend ourselves in
this area to bring these problems under control. We must also
confront the problems with worker safety and health that exist
throughout the system. It is our obligation to provide safety to our
employees and contractors - not only to minimize risks, but to maintain
a loyal and efficient workforce.
The Department must develop a system with better management and
financial controls. Congress and other parties are asking us how we
are spending taxpayers dollars. The Department is working to
implement improved financial and accounting controls and earn more in
terms of progress for each dollar that is spent.
The Department needs to negotiate with Federal and State regulatory
agencies and work toward reasonable, health- and risk-based
standards. In order to establish sound standards,, we must attempt to
understand the risks posed by the contaminants and take into
consideration site-specific issues including background concentrations,
land use issues, and technological limitations.
The Department plans to seek external independent evaluation of
health and environmental threats of the defense complex. In this
regard, DOE can better understand the risks at the existing facilities
by reaching out to the academic and public health communities, States,
regulators, citizens, and other stakeholders for their input.
The Federal Facilities Environmental Restoration Dialogue Committee
(Keystone) Report has a number of valuable insights and recommendations
to support this approach and provides a good example of how parties
can be brought together to address competing interests.
C. LAND USE
The development and selection of a particular site's ultimate end state
will require extensive interactions with various stakeholders. The
Department has achieved some success in considering the level of
cleanup at the Hanford, Washington site with the Hanford Future Site
Uses Working Group. This group was comprised of numerous stakeholder
including regulators, concerned citizen groups, Indian tribes,
environmentalists, labor, industry, and DOE representatives. This
approach may be a useful model for land use planning and
decision-making at other sites.
While these decisions involve local participation, there is also a need
to bring a national perspective to the ultimate fate of these lands.
Through integrated risk management and long-range planning, we must do
what we can to address potential threats. Land use restrictions may
be "temporary" while new technologies are developed or while
contamination Is naturally decaying. Our first priority must always be
safety and the protection of human health and the environment.
D. CONTRACTOR ACCOUNTABILITY
The. Department needs a better system of managing, overseeing, and
reviewing cost estimates made by its contractors. In addition,
contractors need to be held to a higher standard of accountability. We
must improve the way we estimate the scope of work needed to meet our
commitments in addition to the costs of performing that work so we
can better understand and control cost growth. The Department will also
work to make better use of independent estimating to help assure the
validity of initial scope and cost estimates.
Historically, DOE has been seen as deficient in the administration of
its most significant contracts. In the past, management and operating
(M&O) contractor costs short of "criminal actions" or "willful
misconduct," were generally paid by the Government. Costs resulting
from negligence were often paid, and the Department did not adequately
consider performance when awarding fee to an M&O.
In response, the Department is developing mechanism to the emphasize
the it places on the responsibility and accountability of its M&O
contractors. The evaluation standard is used to promote excellent
performances particularly in the areas of environment, safety, health,
and cost performance.
In order to assert control over the authorization of work, negotiated
costs, and to deliver schedules under its M&O contracts, DOE published
a final rulemaking in June, 1991. Under the rule profit-making
contractors and subcontractors are required to assume the financial
risk for certain avoidable costs and expenses resulting from negligent
actions or inactions. The penalty to the contractor is a reduction in
award fee for the amount of loss this number could reach the contract's
maximum fee amount. The primary purpose of establishing this penalty is
to provide DOE with another management tool under which M&O contractors
would be encouraged through financial incentives to achieve higher
levels of performance than were experienced in the past. Just as an
award fee can be a positive tool, the penalty for negligence is an
important device to encourage quality work from contractors.
Although deficiencies still exist, we are making progress in several
areas of contractor accountability as well as our management of
contractors. We conduct periodic program management reviews and
analyses, have established internal program tracking systems, and carry
out independent self-assessments. Each month, the program offices use
the DOE Approved Funding Program financial system to distribute funds
to the Field Offices and then use the DOE Financial Information System
to track fiscal performance against the amounts allocated. Headquarters
program managers conduct periodic, in-depth reviews of Field Office
activities. Additionally, we are examining alternatives for
strengthening EM's management of contractors at the site level, which
requires optimizing the mix of resource, and skills between headquarters
and the field. These efforts, along with the Department-wide management
and contracting initiatives I discussed earlier, will help assure
improved performance in our EM activities.
In summary, the Department will ensure greater contractor accountability
and expand upon previous efforts. Firm deadlines will be set for the
establishment of project baselines that define the costs, schedules,
and technical details of activities. These baselines will make it
easier to measure contractor performance. Quantifiable cost objectives
will be established to assure that management and cost controls are
used effectively to achieve outcomes that are consistent with
expectations. Performance will be measured by the containment of costs
within established cost objectives, and managers will be held
accountable at all levels for the success of program operations.
E. MANAGEMENT AND BUDGET EFFICIENCY
The Department is committed to work toward the goal of continuous
improvement by implementing stringent management and cost controls.
We must first recognize our mistakes, and then correct them. For
example, the cleanup program has received numerous recommendations for
improvement in the form of reviews and reports issued by the General
Accounting Office and other organizations. Although these reviews have
pointed out areas of weakness, the Department has made many changes and
is committed to further improvements to address the concerns that
have been raised.
In January 1991, because of concern over increasing costs, EM
Headquarters line organizations mounted a unique budget validation
effort in cooperation with field counterparts. Review teams went to the
field to review the scope, schedule, and cost of the Field Office
budget requests. Because of these reviews, the baseline process has
resulted in updated and revised cost estimates for the entire program.
Although the Department is making progress in the areas of cost
estimating and funds tracking, we realize many more enhancements must
be made in the future.
XV. CONCLUSION
Mr. Chairman,, the Department of Energy is committed to meeting its
various missions funded under the Atomic Energy Defense Activities
-effectively and efficiently. We are keenly aware of the importance of
our responsibilities and our accountability to the Congress, the
American people and our workers. We know that we must be flexible and
responsive to changing defense needs and fiscal realities. We will need
to follow-through on our initiatives and make some tough decisions as
we move forward. However, with your continued support, I am
confident we can be successful. Thank you for this opportunity to
address the Senate Armed Services Subcommittee on Nuclear Deterrence,
Arms Control and Defense Intelligence.
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