Case Study 3: From Nuclear Waste Cleanup, GAO-19-223, February 19, 2019

Fifty years of federal nuclear weapons production and energy research during the Cold War generated millions of gallons of liquid radioactive waste, millions of cubic meters of solid radioactive waste, thousands of tons of spent nuclear fuel and special nuclear material, and large quantities of contaminated soil and water. In 1989, the Department of Energy (DOE) established its nuclear waste cleanup program by creating the Office of Environmental Management (EM). The EM program’s mission is to complete the safe cleanup of this Cold War legacy and to work to reduce associated risks and costs within the established regulatory framework.

EM manages most of its cleanup of nuclear waste (77 percent of its fiscal year 2019 budget) under a category that EM refers to as operations activities, using less stringent requirements than are used for its capital asset projects. EM’s mission is to complete the cleanup of nuclear waste at 16 DOE sites and to work to reduce risks and costs within its established regulatory framework. In December 2018, DOE reported that it faced an estimated $494 billion in future environmental cleanup costs.

GAO was asked to examine EM’s operations activities. The report examined, among other objectives, (1) how EM manages its cleanup work and (2) the extent to which EM’s cleanup policy followed selected leading practices for program and project management.

Our analysis of EM contractors’ EVM systems for operations activities found that EM had not followed best practices for a reliable EVM system. The EVM data for contracts covering operations activities contained numerous, unexplained anomalies in all the reports GAO reviewed, including missing or negative values for some of the completed work to date. Negative values should occur rarely, if ever, in EVM reporting because they imply the undoing of previously scheduled or performed work. In addition, GAO found problems with the estimate at completion in all 20 contractors’ EVM systems. More specifically, GAO found (1) many instances where the actual costs exceeded the estimates at completion even though there was still a significant amount of work remaining; (2) several occasions where the estimates at completion were less than half of the original budget at the beginning of the project; and (3) several contractors reported estimates at completion of zero dollars when their original budgets were for hundreds of millions of dollars. These problems indicated that the EVM systems were not being updated in a timely manner or were not well monitored since the estimate at completion values were too optimistic and highly unlikely.

Even though EM required most of its contractors for operations activities to maintain EVM systems, EM’s 2017 policy generally did not require that EVM systems be maintained and used in a way that follow EVM best practices. Until EM updated its cleanup policy to require that EVM systems be maintained and used in a way that follow EVM best practices, EM leadership may not have had access to reliable performance data to make informed decisions in managing its cleanup work and to provide to Congress and other stakeholders on billions of dollars’ worth of cleanup work every year.

GAO reported its findings on February 19, 2019 in Nuclear Waste Cleanup: DOE Could Improve Program and Project Management by Better Classifying Work and Following Leading Practices, GAO-19-223.