Department of Energy:
External Regulation Savings in Safety and Health Activities at DOE Science Laboratories
GAO-03-633R, May 14, 2003
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The Department of Energy (DOE) is unusual among federal agencies in that it regulates and inspects its own facilities to protect the safety and health of its workers and of the communities surrounding its vast complex of research laboratories. With few exceptions, all other federal facilities must comply with national standards set by the Nuclear Regulatory Commission (NRC) for nuclear safety and by the Occupational Safety and Health Administration (OSHA) for worker safety and health. DOE asserts that, for the most part, its safety and health standards meet or exceed those promulgated for facilities regulated by NRC and OSHA. At DOE's 10 science laboratories, which are run by management and operating (M&O) contractors, the department and its contractors use a contract administration process to select standards appropriate to current worker hazards and public safety issues. Both DOE and the M&O contractors are involved in safety and health activities. DOE's field offices, most of which are located at the laboratories, provide continuous safety and health oversight of the M&O contractors. DOE headquarters offices provide policy guidance to the field offices and also conduct some oversight of the laboratories. Safety and health personnel working for the M&O contractors take actions to comply with the safety and health standards and conduct their own self-assessment activities. DOE's field offices track contract compliance through direct observations and through the review of safety and health reports and other related information provided by the M&O contractors. Over a decade ago, DOE began considering whether to end self-regulation of its facilities to improve safety and public trust in the department, among other reasons. However, after much study, the department concluded that the costs of shifting to external regulation would exceed the potential benefits of doing so. We have taken a position different from DOE. For example, in a 2002 report, we observed that external regulatory agencies' "greater independence, coupled with use of national nuclear and worker safety standards and enforcement powers, would make them more cost-effective regulators (than DOE)." In addition, any resource savings to the department in shifting to external regulation could potentially be redirected to other mission priorities. The conference report accompanying the Energy and Water Development Appropriations Act for fiscal year 2002 directed DOE to prepare an implementation plan for shifting the department's science laboratories to external regulation. In July 2002, DOE presented a plan that was one month late and lacked important information. A subsequent committee report accompanying the 2003 appropriations bill criticized DOE for providing the "grossly inadequate" plan. This report concluded that DOE "cannot be relied upon to provide accurate and objective information in response to Committee requests for information on this issue." Congress therefore requested us to determine (1) how much DOE spends on safety and health activities at its science laboratories and (2) how much DOE might save after shifting to external regulation of these facilities.
In FY 2002, DOE spent about $145 million on safety and health activities at its 10 science laboratories, and we believe that this spending level has not varied much during the last 4 years. This expenditure represented about 16 percent of all safety and health costs department wide. Virtually the entire expenditure went to cover the more than 1,400 federal and M&O contractor personnel involved in safety and health activities--about 95 percent of whom worked for the M&O contractors. The reported safety and health costs do not include any maintenance costs, which are accounted for separately. A shift to external regulation of the science laboratories could decrease DOE's annual safety and health costs by up to about $41 million, or increase these costs up to about $5 million depending on the level of continued department oversight of these activities. Any potential savings in DOE safety and health costs, however, would likely be applied to reduce other costs associated with external regulation and would, therefore, not produce immediate overall budgetary savings. Costs would be incurred to bring the laboratories into compliance with national safety and health standards and to supplement the staffs of the external agencies to take on regulatory and inspection responsibilities for the numerous facilities at each science laboratory. In addition, both DOE and the M&O contractors might transfer safety and health personnel to other functional areas in their respective organizations rather than eliminate these positions to reduce overall operating costs. Further reductions in safety and health costs might be possible through staff reductions at DOE headquarters offices. However, these offices contend that personnel reductions are unlikely because staff will still be needed to self-regulate other facilities, such as the defense laboratories, and to interact with the external regulators. Any reduction in DOE safety and health costs after shifting to external regulation would stem from DOE altering its approach to overseeing safety and health activities. If DOE continues with its current oversight approach after regulatory authority shifts to NRC and OSHA, safety and health costs could actually increase up to about $5 million annually. These additional costs would result from DOE increasing its current safety and health staffing levels to interact with the external regulatory agencies, and the M&O contractors increasing their safety and health staffing levels to respond to reporting requirements and information requests from both the external regulators and DOE. We found that the DOE safety and health oversight approach, which drives staffing levels, is substantially reflected in the number of contractually required safety and health reports and frequent ad hoc information requests of the M&O contractors. Eliminating redundant information requests and oversight after shifting to external regulation could justify a reduction in or redirection of safety and health personnel that would lower safety and health costs.