Wasteland

Decades of poor management at the Energy Department threatens public health and national security.

Last summer, a former Energy Department executive conducted an independent analysis of plutonium waste at five former U.S. nuclear weapons production facilities and reached a startling conclusion: During the past 45 years, about 12.7 metric tons of plutonium were discarded at the sites, more than three times the department's last official estimate, which was in 1996. The findings suggest Energy faces a far bigger job in cleaning up the radioactive waste generated through decades of nuclear weapons production than previously believed.

The dramatic increase, wrote Robert Alvarez, senior scholar at the Institute for Policy Studies, which published the findings in July, is likely due to three factors: the reclassification of some production residue as waste, previous underestimates of material lost through the production process, and improvements in the way data is characterized.

Nobody really knows how much plutonium the United States produced and buried in the wake of World War II because of significant record-keeping gaps during the first 25 years of weapons production, says Alvarez, who was deputy assistant secretary for national security and the environment during the Clinton administration. The implications of his analysis are most profound at the Hanford Nuclear Reservation in southeastern Washington state, where government engineers and scientists built the first industrial-size nuclear reactor and a plant to extract plutonium from the resulting fuel rods, an effort that produced the Fat Man bomb detonated over Nagasaki, Japan, in August 1945. During a 40-year period, nine reactors at the 586-square-mile reservation on the Columbia River produced nearly one-third of the nation's plutonium-more than any other site. Today, Hanford is the largest nuclear waste dump in the Western Hemisphere and poses a long-term environmental threat to the region.

Cleaning up the radioactive waste that is the legacy of Cold War nuclear weapons production is one of the most complex challenges government faces, and it's just one of the missions the Energy Department inherited after it was created in 1977. Ensuring the safety and efficacy of the nuclear stockpile is another, along with the Obama administration's mandate to lay the groundwork for a post-petroleum economy through an intensive renewable fuels program. That's a worrisome list of critical missions for a department with a long track record of budget-busting projects that have failed to deliver promised solutions on schedule. So troubling are Energy's management problems it has been on the Government Accountability Office's high-risk list of programs most vulnerable to waste, fraud and abuse since the list was established in 1990. In 2009, the National Academy of Public Administration weighed in with a blistering report on management at the department, especially concerning the way it oversees personnel and contracts.

"They face enormous challenges in what they do in terms of cleanup and other programs," says Eugene Aloise, director of natural resources and environment at GAO. Further complicating Energy's work is the fact that it is the most contractor-dependent civilian agency in government. The department has about 15,000 federal employees, many of whom oversee an estimated 100,000 contractors. GAO singled out shortcomings in contract management in putting the department on its high-risk list.

While Energy has made progress in overseeing contracts and projects, Aloise says it's not enough. "We are still finding the same contract management problems we have found for years-lack of accountability, lack of holding contractors accountable for overruns, large overruns, large schedule misses, those kinds of things," he says. GAO's recent audit of efforts to close underground radioactive waste tanks at the Savannah River Site in southwestern South Carolina showed that "before one shovel of dirt was moved at the tank waste program down there the estimate rose $1.4 billion," Aloise says. In addition, the tanks are not likely to be closed on schedule due to construction delays, GAO found.

"You can't go to Congress, to the appropriators, and say we need X million dollars to build this project when you know, you know, it's going to cost many more times that amount, but you are afraid you won't get the budget if you ask for all of it upfront. It's those kinds of things that need to change," Aloise says.

Risky Business

When Daniel Poneman arrived at Energy in May 2009 to serve as deputy secretary, one of the first things he did was abolish the standing 90-minute quarterly meetings aimed at providing department leaders with updates on the largest projects. The meetings were ineffective, Poneman says, because "there's no way to get your arms around a project of the heft and complexity of these in that short period." Instead, he decided to conduct deep reviews of individual projects, one at a time.

"The first one we really focused on, because it was in perilous condition and the biggest one we've got, was the waste treatment plant at Hanford," he says. Over a period of months, program and department leaders met regularly, sometimes daily, to discuss critical issues regarding the project. "We made a series of changes to try to get it on a better path," he says. Top officials intensified the process of construction project reviews, which began in the previous administration and involves bringing in outside experts to evaluate all aspects of construction.

"We needed to make sure we have the right players in place on both the contractor side and the federal side," he says. Energy officials met with the contractor's executives to reinforce the need not only for top players on the contract itself, but for corporate support in providing specialized expertise as well. "Then we looked for and recruited a very successful project manager with a very successful track record so there would be an appropriate counterpart. Having found those people, we hold their feet to the fire," Poneman says. "We've told them to give us recommendations on what we need to do to bring it in on schedule and on budget."

Cleanup projects are both dangerous and complicated from engineering and scientific standpoints. Early weapons work was conducted in extreme secrecy in an era before modern record-keeping and computer-generated blueprints. Processing methods created byproducts that can remain radioactive for hundreds of thousands of years. Plutonium production at Hanford alone generated millions of tons of solid waste-equipment, facilities, even the clothing workers wore-and hundreds of billions of gallons of liquid waste, according to the site's official history. The solid waste was buried in pits or trenches, sometimes placed in containers beforehand, sometimes not. The liquid waste was poured into holding ponds or dumped directly into the ground, creating an underground plume of contaminates that threatens the Columbia River. No one really knows the full scope of the challenge-disposal records are incomplete and many spills and accidents were never documented.

Most of the solid waste, contaminated soil and building debris will be taken to a huge, specialized landfill regulated by the Environmental Protection Agency. Fuel rods that came out of the reactors but never had their plutonium extracted will be sent to a national repository designed to accept such materials. Solid transuranic waste, debris contaminated with plutonium or other materials that could remain radioactive for hundreds of thousands of years, is being packaged and shipped to the Waste Isolation Pilot Plant in New Mexico for permanent burial.

The liquid waste stored at Hanford in underground tanks, some dating to 1943, will be transformed into glass cylinders for storage through a process known as vitrification at the treatment plant under construction.

"The waste treatment facility is one part of the overall project-the name of the game here is emptying tanks and making glass," Poneman says. "We need to make sure now that the project is continuing to evolve and mature and that the evolution and maturity is lashed up with the development of the tank farms project, so those two projects are seamlessly integrated. It's not going to do us much good to have the [waste treatment plant] project up and running if we don't have the material flowing in from the tank farms to turn into glass."

Aloise surely would agree. GAO has urged Energy to adopt rigorous technology readiness levels, much like NASA does before sending equipment into space. Only by enforcing the most exacting technical requirements can such complex programs be assured of success, he says. "If you take Hanford as an example, all the complicated technology going into that plant should be at Technology Readiness Level 7, or higher," says Aloise, describing the stage at which system prototypes must be demonstrated in an operating environment.

"Once those technologies are put in, they're in a black box. There's no way you're going to go in and fix them [because] they're going to be so highly contaminated," he says. "It's not good enough just to build it on time, to bring it in on schedule, if it doesn't work."

Addressing Root Causes

In the credenza behind his desk Poneman keeps copies of two reports completed in 2008 under the previous Energy secretary, Samuel Bodman. A chemical engineer and executive with years of private and public sector experience, Bodman is said to have been embarrassed by the department's reputation for poor management. He initiated a root cause analysis of problems with contract and project management and a subsequent corrective action plan. Poneman said he went to school on both documents and he and Energy Secretary Steven Chu have adopted and expanded the effort to improve management and get off GAO's high-risk list.

The documents detail a range of problems involving front-end planning, federal personnel management, risk assessment, funding, cost estimating, acquisition strategy, organizational alignment, requirements management, and project oversight. A key factor in those areas is a shortage of personnel with the skills needed.

Both GAO's Aloise and Energy's inspector general, Gregory Friedman, praised the analysis and the corrective action plans officials adopted from the Bush and Obama administrations. "They've initiated a fairly aggressive portfolio of initiatives to try to address the problems," Friedman says. "However, frankly, from our point of view, while we've seen progress it's a little too early to declare victory." The sheer volume of contract awards, grants, loan guarantees and other financial instruments Energy administers is a challenge, he says. "You can't cure the contracting administration problems or any of these problems without a skilled workforce that's prepared to take on the difficult tasks," he says.

Poneman, a lawyer whose background includes a stint on the National Security Council during the Clinton administration where he focused on defense policy, arms control and nonproliferation issues, says he never imagined he would devote as much time to project management issues as he has during the past 18 months. When he first met with Chu after taking the job in May 2009, the Energy chief indicated the most important thing to address was personnel. "We're only as good as the people we've got in the department," Chu told him.

The NAPA report released in July 2009 drew a particularly harsh assessment of what it described as a rigid, unresponsive hiring process that seemed oblivious to the actual needs of program managers. It cited a leadership vacuum so severe it drove some Energy agencies to outsource hiring responsibilities to other federal departments. To help rectify the problems, top leaders tapped Michael Kane, formerly the human capital manager at the National Nuclear Security Administration, an independent agency within Energy, to become chief human capital officer for the entire department. "Mike was very open to innovation and new ways to do things, and he's brought that innovative spirit with him," says Poneman. "Whenever we have a task that needs doing, Mike Kane is a very early call for me. It's a far cry from the linear processing of applicants [cited in the NAPA report]."

Poneman says Energy already is making progress in human resources management. In 2009, it took an average of 174 days to hire a new employee; in 2010, that was cut in half to 86 days-far from ideal, but a big improvement. In October, Kane and Poneman sent HR directors and department heads a 15-page hiring reform plan to further improve the process.

Hiring is only part of the personnel challenge, though. "That's just the front edge," says Poneman. "Our mission is evolving, and we need to continue to provide career paths that are exciting so we not only attract but retain talent" and shape staff skills to changing needs. His goal is to have Kane's office operate more as an internal business consultancy in a problem-solving capacity rather than a gantlet for hiring new personnel.

Recovery Act Lessons

The 2009 American Recovery and Re-investment Act created enormous challenges for Energy, essentially doubling the department's budget in the short term and imposing new accounting and transparency requirements. So much money was pumped into weatherization programs across the country so quickly, for example, Friedman's office warned in 2009 that the area was ripe for abuse and mismanagement, especially since the department would have to rely on state and local officials as well as contractors for oversight and documentation of projects. A number of reports following up on stimulus investments in weatherization have confirmed those early concerns.

Perhaps more telling, in terms of mission management, are the lessons from the stimulus investment of $6 billion in environmental cleanup projects. The funding allowed Energy to accelerate efforts at some of the most polluted weapons production sites in the inventory, including Hanford. The Recovery Act funded many shovel-ready projects well ahead of schedule. The projects already had many contracts in place and proven technologies that had cleared regulatory hurdles. When GAO looked at implementation of the stimulus projects last summer, however, it found that nearly one-third were behind schedule or over budget.

"They were facing the same kinds of problems we've seen in contracts and project management at DOE for years," says Aloise. "These projects were smaller and basically much less complicated. We would have expected to see better outcomes."

Energy officials say most of the projects are now on schedule, but GAO has yet to verify that assertion.

There are clear indications of progress. Since Energy landed on GAO's high-risk list in 1990, auditors have found sustained, measurable improvements at the Office of Science. In 2009, they narrowed the scope of concerns to NNSA and the Office of Environmental Management, the entities responsible for the nuclear stockpile and cleanup-60 percent of the department's budget. In October, NNSA's National Ignition Facility at Lawrence Livermore National Laboratory in California won a project-of-the-year award from the Project Management Institute. Poneman says the success of the $1.8 billion project, which involved more than 12,000 contracts, demonstrates how far the department has come.

GAO's revised high-risk list, which is updated every two years, will be released in January 2011. "Frankly, we haven't yet made a determination about DOE," Aloise says.