Recovery Act:

Most DOE Cleanup Projects Appear to Be Meeting Cost and Schedule Targets, but Assessing Impact of Spending Remains a Challenge

GAO-10-784: Published: Jul 29, 2010. Publicly Released: Jul 29, 2010.

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The American Reinvestment Act of 2009 aims to stimulate the economy, including funding for environmental cleanup projects. The Department of Energy (DOE) receives annual appropriations of $6 billion to support the cleanup of radioactive and hazardous wastes resulting from decades of nuclear weapons research and production. GAO was asked to examine (1) how DOE selected projects for funding and developed cost and schedule targets, (2) project status and extent to which projects are achieving these targets, and (3) key challenges faced and efforts to address them. GAO reviewed Recovery Act project documentation, including cost, schedule, and performance data for 84 projects at 17 sites; visited the 4 sites receiving most of the funding; and interviewed headquarters and site officials.

DOE's Office of Environmental Management generally chose to use Recovery Act funds for cleanup projects that could be quickly started and finished. Most projects also had existing contracts, which allowed DOE to update and validate cost and schedule targets within a short time. DOE generally funded four types of projects: decontaminating or demolishing facilities, removing contamination from soil and groundwater, packaging and disposing of transuranic and other wastes, and supporting the maintenance and treatment of liquid tank wastes. In all, DOE selected 84 projects at 17 DOE sites in 12 states for Recovery Act funding, with 4 sites receiving most of the money. As of May 2010, DOE had begun work on all Recovery Act projects and reported creating about 5,600 full-time equivalent jobs at the 17 sites during the first quarter of 2010. Spending on Recovery Act projects has been slower than planned. DOE had obligated about $5.5 billion of the $6 billion in Recovery Act cleanup funding and spent about $1.9 billion of those funds. This sum is less than the $2.3 billion DOE had expected to spend by that time. DOE reported that most Recovery Act projects were achieving cost and schedule targets, although a third of projects were not. DOE has faced familiar challenges in both managing Recovery Act projects and measuring how Recovery Act funding has affected cleanup and other goals. According to DOE officials, a third of projects did not meet cost and schedule targets for some of the same reasons that have plagued DOE in the past: technical, regulatory, safety, and contracting issues. DOE has taken steps aimed at strengthening project management and oversight for Recovery Act projects, such as increasing project reporting requirements and placing tighter controls on when funds are disbursed to sites, but it is uncertain how these steps will ultimately affect Recovery Act project performance, or whether they hold the potential to be useful for cleanup work funded under annual appropriations. Measuring the impact of Recovery Act funding on job creation and DOE's cleanup goals has also been a challenge for DOE, in particular, providing an accurate assessment of the act's impact on jobs, environmental risk reduction, and the life-cycle costs of its cleanup program. DOE has used three different methodologies to assess and report jobs created, which provide very different and potentially misleading, pictures of jobs created. For example, the calculations ranged from about 5,700 jobs to 20,200, depending on the methodology used. Also, DOE has not developed a clear means of measuring how cleanup work funded by the act will affect environmental risk or reduce its footprint--the land and facilities requiring DOE cleanup. Further, it is unclear to what extent Recovery Act funding will reduce the costs of cleaning up the DOE complex over the long term. DOE's estimate of $4 billion in life cycle cost savings resulting from Recovery Act funding was not calculated in accordance with federal guidance. GAO's analysis indicates that those savings could be 80 percent less than DOE estimated. Without clear and consistent measures, it will be difficult to say whether or how Recovery Act funding has affected DOE's cleanup goals. GAO recommends four actions for DOE to improve project management and reporting: (1) determine whether project management and oversight steps adopted for Recovery Act projects would benefit other cleanup projects, (2) clarify the methodology used to calculate jobs created, (3) develop clear and quantifiable measures for determining the impact of Recovery Act funding, and (4) ensure that cost savings are calculated according to federal guidance. DOE agreed with the recommendations.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: The Department of Energy's (DOE) Environmental Management (EM) took several steps to implement the recommendation. First, EM developed a database for sites receiving Recovery Act funding to record any lessons learned as projects were carried out. Second, EM held a workshop in March 2012 for sites to share lessons learned during the implementation of Recovery Act-funded projects and discuss their applicability to other projects. Finally, EM issued a Report to Congress in November 2012 entitled "Environment Management Recovery Act Program Lessons Learned." The report discussed 66 lessons learned. According to the report, the lessons learned were analyzed, categorized, and shared within the Recovery Act program and EM's base program.

    Recommendation: To help ensure successful completion of Recovery Act projects and apply lessons learned to DOE's larger cleanup effort, the Secretary of Energy should direct the Assistant Secretary of Environmental Management to determine whether additional project management and oversight steps adopted for Recovery Act projects, such as more frequent reporting, have proven beneficial and whether these steps would be effective and appropriate for DOE's cleanup projects funded under annual appropriations.

    Agency Affected: Department of Energy

  2. Status: Closed - Implemented

    Comments: DOE reports full-time equivalent (FTE) job figures for prime contractors and subcontractors, as laid out in Office of Management and Budget (OMB) guidance. DOE has discontinued reporting head count figures.

    Recommendation: To help ensure successful completion of Recovery Act projects and apply lessons learned to DOE's larger cleanup effort, the Secretary of Energy should direct the Assistant Secretary of Environmental Management to clarify the methodology used to calculate any supplemental job creation figures in addition to prime contractor and subcontractor FTEs, such as head count--that is workers who have charged any amount of time to Recovery Act projects--so that users of this information fully understand what each number represents and its significance and limitations.

    Agency Affected: Department of Energy

  3. Status: Closed - Implemented

    Comments: DOE officials report that they have defined "footprint" in clear, quantifiable terms and are reporting monthly the number of square miles that have been cleaned up.

    Recommendation: To help ensure successful completion of Recovery Act projects and apply lessons learned to DOE's larger cleanup effort, the Secretary of Energy should direct the Assistant Secretary of Environmental Management to develop clear, quantifiable, and consistent measures for determining the impact of Recovery Act funding on environmental risk. As part of this effort, clearly define what the DOE footprint consists of, determine how changes to the footprint will be measured, and ensure that all DOE sites report changes to their footprint in a consistent and comparable manner.

    Agency Affected: Department of Energy

  4. Status: Closed - Implemented

    Comments: DOE has prepared a report indicating the proper method for determining how to calculate lifecycle cost savings for EM projects. This method complies with the DOE and OMB requirements stated in the recommendation.

    Recommendation: To help ensure successful completion of Recovery Act projects and apply lessons learned to DOE's larger cleanup effort, the Secretary of Energy should direct the Assistant Secretary of Environmental Management to ensure that savings estimates over the life of the cleanup projects are calculated according to OMB and DOE guidance, so that these estimates accurately represent potential savings and reflect costs adjusted for both inflation and the time value of money.

    Agency Affected: Department of Energy

 

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