Major Management Challenges at the Department of Energy
In its 2003 performance and accountability report on the Department of Energy (DOE), GAO identified specific performance and management challenges facing the department as it works to carry out its multiple, complex, and highly diverse missions. DOE has undertaken some corrective action in all of the areas that GAO has reviewed, but because of the nature and difficulty of the challenges, achieving lasting improvements may take several years. In the past, GAO has pointed out that many of these challenges are long-standing and that sustained management attention will be needed to correct the underlying weaknesses and implement needed improvements. GAO continues to monitor steps DOE has taken to address these challenges and has issued a number of reports and testimonies on the department's progress. The following is a brief summary of DOE's progress and a list of related GAO products. Additional information on DOE's contract management can be found in High Risk Series: An Update ( GAO-05-207 ). GAO has not done any additional work on DOE's efforts to revitalize its infrastructure.
The DOE has addressed the post September 11, 2001 security environment by moving to higher levels of security readiness and revising its Design Basis Threat, a classified document that identifies the potential size and capabilities of terrorist forces. However, DOE has been slow to resolve a number of significant issues associated with implementing the Design Basis Threat at its sites that contain nuclear weapons or weapons grade material. Consequently, it may be several years before DOE's sites can fully meet the new requirements contained in its revised Design Basis Threat. GAO made a series of recommendations to strengthen DOE's ability to meet the revised Design Basis Threat.
The National Nuclear Security Administration (NNSA), a separate agency within DOE, is responsible for the management and security of the nation's nuclear weapons, nonproliferation, and naval reactors programs. NNSA has improved its management by developing revised planning, programming, and budgeting systems and redesigning its organization. However, key implementation issues still remain, such as, which NNSA employees may direct the activities of it major contractors and whether large NNSA programs, such as its effort to refurbish the aging nuclear stockpile, are being adequately planned so that they remain within cost and on schedule. GAO made a series of recommendations to improve management at NNSA, including the need for a formal program management structure and implementation guidance for directing the work of its contractors.
DOE's contract management , including both contract administration and project management, continues to be at high risk for fraud, waste, abuse, and mismanagement. About 90 percent of DOE's annual budget is spent on contracts—about $21.6 billion for fisca l year 2003. DOE continues its efforts to address its contract and project management problems by strengthening its approach to (1) selecting the appropriate contract type, (2) using competition to award contracts, (3) incorporating performance-based measures into contracts, and (4) minimizing cost and schedule overruns on major projects. While improvement efforts have been initiated, performance problems continue on DOE's major projects. For example, at the start of the project to clean up radioactive waste in 177 underground storage tanks in Hanford, Washington, DOE did not implement the project management reforms that it was incorporating into its policy and guidance, increasing the risks DOE faces in cleaning up the waste and potentially adding significantly to the cost of the project. To further strengthen DOE's contract management, GAO has made a series of recommendations that collectively call for DOE to improve its management of individual projects and activities and to strengthen senior management oversight of DOE activities.
Managing the cleanup of DOE's radioactive and hazardous wastes at its contaminated sites and facilities is a daunting undertaking that will cost billions of dollars and extend well into the 21st century. DOE continues to reform its business and contracting processes and pursue an accelerated, risk-based cleanup strategy at many of its sites. While DOE expects that its efforts will enable it to avoid unnecessary costs and reduce risks posed to human health and the environment, success is not guaranteed. DOE management leadership and focus will be needed to (1) ensure that these initiatives are implemented in a safe and cost-effective manner and (2) overcome challenges such as the lack of disposal sites for high level and low-level mixed waste and the need to develop and deploy innovative cleanup technologies that could affect DOE's ability to accomplish its cleanup goals. GAO has made a number of recommendations to DOE to improve the management of its cleanup activities such as (1) ensuring that DOE management practices include conducting rigorous analyses, following best practices for incorporating new technologies, and being cautious about using a concurrent design/build approach for nuclear facilities so that DOE's accelerated cleanup initiative is effective and that cleanup of high-level waste proceeds in a timely and cost-effective manner and (2) developing decontamination and decommissioning plans for the Paducah and Portsmouth uranium enrichment plants that would identify the most probable time frames and costs for completing the cleanup of these facilities.
Regarding DOE's efforts to enhance its leadership in meeting the nation's energy needs , DOE recently launched ambitious new energy technology initiatives involving hydrogen research and long range planning for safety and stability of nuclear energy as a power source. While GAO has not assessed these initiatives, GAO has noted a more responsive DOE involvement related to its recent Northeast electricity blackout work and demand response pricing work, where DOE has played a larger role in providing leadership to the federal and private sectors. Related to this work, GAO recommended that DOE better coordinate and outreach to the states to improve operations within the electricity markets, suggested ways for DOE to better assess future financial risk associated with selling electric power from federal facilities, and challenged DOE to explore new opportunities for improving data collection in the natural gas industry to improve both supply and environmental impacts. Given the vastness of the energy arena, the vulnerability of the U.S. economy to future supply disruptions, and the continuing threats of terrorist attacks, more remains to be done to build upon this promising start.
Related GAO Products
Address Security Threats and Problems
Nuclear Security: Several Issues Could Impede the Ability of DOE's Office of Energy, Science and Environment to Meet the May 2003 Design Basis Threat . GAO-04-894T . Washington, D.C.: June 22, 2004.
Nuclear Security: DOE Must Address Significant Issues to Meet the Requirements of the New Design Basis Threat . GAO-04-773T . Washington, D.C.: May 11, 2004.
Nuclear Security: DOE Needs to Resolve Significant Issues Before It Fully Meets the New Design Basis Threat . GAO-04-623 . Washington, D.C.: April 27, 2004.
Nuclear Security: DOE Must Address Significant Issues to Meet the Requirements of the New Design Basis Threat . GAO-04-701T . Washington, D.C.: April 27, 2004.
Nuclear Security: DOE Faces Security Challenges in the Post September 11, 2001, Environment . GAO-03-896TNI . Washington, D.C.: June 24, 2003.
Nuclear Security: NNSA Needs to Better Manage Its Safeguards and Security Program . GAO-03-471 . Washington, D.C.: May 30, 2003.
Improve Management of the Nation's Nuclear Weapons Stockpile
National Nuclear Security Administration: Key Management Structure and Workforce Planning Issues Remain As NNSA Conducts Downsizing . GAO-04-545 . Washington, D.C.: June 25, 2004.
Nuclear Weapons: Opportunities Exist to Improve Budgeting, Cost Accounting, and Management Associated with the Stockpile Life Extension Program . GAO-03-583 . Washington, D.C.: July 28, 2003.
Contract Management (High-Risk Area)
National Nuclear Security Administration: Key Management Structure and Workforce Planning Issues Remain As NNSA Conducts Downsizing. GAO-04-545 . Washington, D.C.: June 25, 2004.
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.
Department of Energy: Achieving Small Business Prime Contracting Goals Involves Both Potential Benefits and Risks. GAO-04-738T . Washington, D.C.: May 18, 2004.
Nuclear Waste Cleanup: DOE Has Made Some Progress in Cleaning Up the Paducah Site, but Challenges Remain. GAO-04-457 . Washington, D.C.: April 1, 2004.
Department of Energy: Mission Support Challenges Remain at Los Alamos and Lawrence Livermore National Laboratories. GAO-04-370 . Washington, D.C.: February 27, 2004.
Nuclear Waste Cleanup: Preliminary Observations at DOE's Cleanup of the Paducah Uranium Enrichment Plant. GAO-04-278T . Washington, D.C.: December 6, 2003 .
Nuclear Weapons: Opportunities Exist to Improve the Budgeting, Cost Accounting, and Management Associated with the Stockpile Life Extension Program. GAO-03-583 . Washington, D.C.: July 28, 2003.
Nuclear Waste: Challenges and Savings Opportunities in DOE's High-Level Waste Cleanup Program. GAO-03-930T . Washington, D.C.: July 17, 2003.
Contract Reform: DOE's Policies and Practices in Competing Research Laboratory Contracts. GAO-03-932T . Washington, D.C.: July 10, 2003.
Nuclear Waste: Challenges to Achieving Potential Savings in DOE's High-Level Waste Cleanup Program. GAO-03-593 . Washington, D.C.: June 17, 2003.
Department of Energy: Status of Contract and Project Management Reforms. GAO-03-570T . Washington, D.C.: March 20, 2003.
Improve Management for Cleanup of DOE Radioactive and Hazardous Wastes
Low-Level Radioactive Waste: Future Waste Volumes and Disposal Options Are Uncertain. GAO-04-1097T . Washington, D.C.: September 30, 2004.
Uranium Enrichment: Decontamination and Decommissioning Fund Is Insufficient to Cover Cleanup Costs. GAO-04-692 . Washington, D.C.: July 2, 2004.
Low-Level Radioactive Waste: Disposal Availability Adequate in the Short Term, but Oversight Needed to Identify Any Future Shortfalls . GAO-04-604 . Washington, D.C.: June 10, 2004.
Yucca Mountain: Persistent Quality Assurance Problems Could Delay Repository Licensing and Operation. GAO-04-460 . Washington, D.C.: April 30, 2004.
Nuclear Waste Cleanup: DOE Has Made Some Progress in Cleaning Up the Paducah Site, but Challenges Remain. GAO-04-457 . Washington, D.C.: April 1, 2004.
Nuclear Waste Cleanup: Preliminary Observations at DOE's Cleanup of the Paducah Uranium Enrichment Plant. GAO-04-278T . Washington, D.C.: December 6, 2003.
Nuclear Waste: Challenges and Savings Opportunities in DOE's High-Level Waste Cleanup Program. GAO-03-930T . Washington, D.C.: July 17, 2003.
Nuclear Waste: Challenges to Achieving Potential Savings in DOE's High-Level Waste Cleanup Program. GAO-03-593 . Washington, D.C.: June 17, 2003.
Enhance DOE Leadership in Meeting the Nation's Energy Needs
Electricity Markets: Consumers Could Benefit from Demand Programs, but Challenges Remain. GAO-04-844 . Washington, D.C.: August 13, 2004.
Natural Gas Flaring and Venting: Opportunities to Improve Data and Reduce Emissions. GAO-04-809 . Washington, D.C.: July 14, 2004.
Bonneville Power Administration: Better Management of BPA's Obligation to Provide Power Is Needed to Control Costs. GAO-04-694 . Washington, D.C.: July 9, 2004.
Electricity Restructuring: 2003 Blackout Identifies Crisis and Opportunity for the Electricity Sector. GAO-04-204 . Washington, D.C.: November 18, 2003